EXHIBIT
10.1
WAIVER, CONSENT
AND AMENDMENT AGREEMENT
This Waiver, Consent and
Amendment Agreement (“Agreement”) dated as of October
___, 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 as
amended on May 17, 2006 (“Amendment”) 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, on the Initial
Closing, $1,250,000 of the Purchase Price was paid to the Company
and $1,250,000 of the Purchase Price was payable within five
business days after the Actual Effective Date which is the Second
Closing Date; and
WHEREAS, the Company
failed to comply with several of its contractual obligations
pursuant to the terms of the Transaction Documents.
NOW THEREFORE, in
consideration of the mutual covenants and other agreements
contained in this Agreement, the Company and the Subscribers hereby
consent and 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”) and
Amendment.
2.
The Subscribers waive
several of the conditions to the Second Closing contained in
Section 1(c) and (d) of the Subscription Agreement, specifically;
the timely compliance by the Company with its obligations to have
the Registration Statement declared effective by the Effective Date
and the failure of the Company to register sufficient shares
pursuant to the terms set forth in the Subscription Agreement, in
order to proceed with the Second Closing on the terms set forth
herein.
3.
Section 3.1 of the Note
is deleted and replaced with the following:
3.1.
Holder’s Conversion Rights. Subject to Section
3.1, the Holder shall have the right, but not the obligation at all
times, to convert all or any portion of the then aggregate
outstanding Principal Amount of this Note, into shares of Common
Stock, subject to the terms and conditions set forth in this
Article III at the lesser of (i) $.005, or (ii) 70% of the average
of the five closing bid prices of the Common Stock for the five
trading days prior to a Conversion Date (“Fixed Conversion
Price”) as same may be adjusted pursuant to this Note and the
Subscription Agreement. The Holder may exercise such right by
delivery to the Borrower of a written Notice of Conversion pursuant
to Section 3.3. After the occurrence of an Event of Default,
the Fixed Conversion Price shall be the lesser of (i) the Fixed
Conversion Price, or (ii) 60% of the VWAP for the five trading days
prior to a Conversion Date.
4.
Section 11.1(iv) of the
Subscription Agreement shall be deleted and replaced with the
following:
(iv)
The Company shall file
with the Commission a Form SB-2 registration statement (the “
Registration Statement ”) (or such other form that it
is eligible to use) in order to register the Registrable Securities
for resale and distribution under the 1933 Act within forty-five
(45) calendar days after the Initial Closing Date (the “
Filing Date ”), and cause the Registration Statement
to be declared effective not later than one hundred and twenty
(120) calendar days after the Initial Closing Date (the “
Effective Date ”). The Company will register not
less than a number of shares of Common Stock in the aforedescribed
registration statement that is equal to 175% of the Shares issuable
upon conversion of all of the Notes issuable to the Subscribers,
and 100% of the Warrant Shares issuable pursuant to this Agreement
upon exercise of the Warrants (collectively the “
Registrable Securities ”). The Registrable Securities
shall be reserved and set aside exclusively for the benefit of each
Subscriber and Warrant holder, pro rata , and not
issued, employed or reserved for anyone other than each such
Subscriber and Warrant holder. The Registration Statement
will immediately be amended or additional registration statements
will be immediately filed by the Company as necessary to register
additional shares of Common Stock to allow the public resale of all
Common Stock included in and issuable by virtue of the Registrable
Securities. Except with the written consent of the Subscriber
or as described on Schedule 11.1 hereto, no securities of the
Company other than the Registrable Securities will be included in
the Registration Statement. It shall be deemed a
Non-Registration Event if at any time after the date the
Registration Statement described in this Section 11.1(iv) is
declared effective by the Commission (“ Actual Effective
Date ”) the Company has registered for unrestricted
resale on behalf of the Subscribers fewer than 125% of the amount
of Common Shares issuable upon full conversion of all sums due
under the Notes and 100% of the Warrant Shares issuable upon
exercise of the Warrants. The foregoing sentence shall also
apply to all registration statements filed on behalf of the
Subscribers pursuant to Section 11.(iv) and Section 11.1(v) with
respect to the Registrable Securities required to be included
therein.
(v)
The amount of
Registrable Securities required to be included in the Registration
Statement as described in Section 11.1(iv) (“ Initial
Registrable Securities ”) shall be limited to not less
than 100% of the maximum amount (“ Rule 415 Amount
”) of Common Stock which may be included in a single
Registration Statement without exceeding registration limitations
imposed by the Commission pursuant to Rule 415 of the 1933 Act but
not less than 175% of the Shares
