EXHIBIT 10.6
MODIFICATION AND AMENDMENT AGREEMENT
This Modification and Amendment Agreement ("Agreement") dated as of MAY
17TH, 2006 is entered into by and among Universal Communication Systems, Inc., a
Nevada corporation (the "Company") and the subscribers identified on the
signature page hereto (each a "Subscriber" and collectively "Subscribers").
WHEREAS, the Company and the Subscribers are parties to a Subscription
Agreement ("Subscription Agreement") dated February 27, 2006 relating to an
aggregate investment by Subscribers of up to $3,012,050.00 of principal amount
of promissory notes of the Company convertible into shares of the Company's
$.001 par value common stock and Warrants in the amounts set forth on Schedule A
attached hereto; and
WHEREAS, the Company and Subscribers desire to restructure the terms of
the Transaction Documents to their mutual benefit.
NOW THEREFORE, in consideration of the mutual covenants and other
agreements contained in this Agreement, the Company and the Subscribers hereby
agree as follows:
1. All the capitalized terms employed herein shall have the meanings
attributed to them in the Subscription Agreement and the documents and
agreements delivered therewith ("Transaction Documents").
2. The exercise price of the Class A Common Stock Purchase Warrants is
hereby reduced to $0.0075.
3. Within ten (10) days of execution of this Agreement, Subscribers
shall exercise an aggregate of Class A Common Stock Purchase Warrants as more
fully described on Schedule A hereto.
4. The Company will issue to each Subscriber additional Class B Common
Stock Purchase Warrants as more fully described on Schedule A hereto exercisable
at $0.015 ("Replacement Warrants").
5. The Company will file an amended Registration Statement to reflect
the terms of this Agreement not later than FIFTEEN (15) DAYS after the exercise
of the Warrants described in Section 3 herein and cause such amendment to be
declared effective by the Commission not later than JULY 17, 2006. Failure to
comply with the foregoing filing and effective dates shall be a Non-Registration
Event in connection with which Liquidated Damages shall accrue in the amounts
set forth in Section 11.4 of the Subscription Agreement. Such additional
securities are deemed Registrable Securities.
6. For the benefit of the parties hereto, the Company hereby makes all
the representations, warranties, covenants undertakings and indemnifications
contained in the Transaction Documents, as if such representations were made by
the Company as of this date. The Subscribers hereby make all of the
representations, warranties, covenants, indemnifications and undertakings
contained in the Transaction Documents as if such representations were made by
the Subscribers as of this date.
7. All other terms and conditions of the Transaction Documents,
including any damages or interest which have accrued shall remain in full force
and effect and payable.
8. Each of the undersigned states that he has read the foregoing
Agreement and understands and agrees to it.
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9. This Modification and Amendment Agreement may be executed in two or
more counterparts, all of which when taken together shall be considered one and
the same agreement and shall become effective when counterparts have been signed
by each party and delivered to any other party, it being understood that all
parties need not sign the same counterpart. In the event that any signature is
delivered by facsimile transmission, such signature shall create a valid and
binding obligation of the party executing (or on whose behalf such signature is
executed) the same with the same force and effect as if such facsimile signature
were an original thereof.
UNIVERSAL COMMUNICATION
SYSTEMS, INC.
the "Company"
/s/ Michael Zwebner
-------------------
By: Michael Zwebner / CEO
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ALPHA CAPITAL AKTIENGESELLSCHAFT BRISTOL INVESTMENT FUND, LTD.
- --------------------------------
MONTGOMERY EQUITY PARTNERS
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SCHEDULE A
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SUBSCRIBER PURCHASE PRINCIPAL AMOUNT CLASS A WARRANTS CLASS B WARRANTS CLASS A CLASS B
PRICE ON OF NOTE TO BE TO BE ISSUED ON TO BE ISSUED ON WARRANTS REPLACEMENT
EACH CLOSING ISSUED AT EACH EACH CLOSING DATE EACH CLOSING DATE TO BE WARRANTS TO
DATE CLOSING DATE EXERCISED BE ISSUED
- ----------------------------------- -------------- ----------------- ------------------- ------------------- ----------- -----------
ALPHA CAPITAL AKTIENGESELLSCHAFT $250,000.00 $301,205.00 15,060,250 15,060,250
Pradafant 7
9490 Furstentums
Vaduz, Lichtenstein
Fax: 011-42-32323196
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BRISTOL INVESTMENT FUND, LTD. $400,000.00 $481,928.00 24,096,400 24,096,400
Caledonian Fund Services Limited
69 Dr. Roy's Drive
George Town, Grand Cayman
Cayman Islands
Fax: (310) 696-0334
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MONTGOMERY EQUITY PARTNERS $600,000.00 $722,892.00 36,144,600 36,144,600
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TOTALS $1,250,000.00 $1,506,025.00
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