Exhibit 10.1
MODIFICATION, WAIVER AND
ACKNOWLEDGEMENT AGREEMENT
This Modification, Waiver and
Acknowledgement Agreement (“Agreement”) dated as of
September 18, 2008 is entered into by and among Commonwealth
Biotechnologies Inc., a Virginia corporation (the
“Company”) and the subscribers identified on the
signature page hereto (each herein a “Subscriber” and
collectively “Subscribers” or the
“Parties”).
WHEREAS, the Company and the
Subscribers are parties to a Subscription Agreement
(“Subscription Agreement”) and other Transaction
Documents dated at and about December 31, 2007 relating to an
aggregate purchase by Subscribers of $1,950,000 of principal amount
of secured promissory notes (the “Notes”) of the
Company convertible into shares of the Company’s no par value
common stock and Warrants exercisable for Common Stock;
and
WHEREAS, the Company would be in
default of material terms of the Transaction Documents and the
Subscribers could elect to exercise their rights to accelerate the
Maturity Date of the Notes; and
WHEREAS, the Company and Subscribers
desire to further 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. Capitalized terms employed herein
shall have the meanings attributed to them in the Transaction
Documents.
2. Effective as of the date of this
Agreement, for every 33% of the remaining principal amount of each
Subscriber’s pro-rata portion of Notes as more fully
described on Schedule A attached hereto, the Conversion Price (as
defined in the Note) will be $0.50, subject to further reduction as
described in the Transaction Documents.
3. All interest which has accrued
through March 31, 2008 shall be paid at an interest rate of
10% in shares of the Company’s Common Stock valued at a
Conversion Price equal to $0.50, and interest that has accrued from
April 1, 2008 through June 30, 2008 shall be paid in
shares of the Company’s Common Stock at a default interest
rate of 12% valued at a Conversion Price equal to $0.50. All
aforementioned shares of the Company’s Common Stock are to be
delivered no later than five days after the execution of this
Agreement.
4. The Purchase Price of the
Class A Warrants will be $0.71, subject to further reduction
as described in the Transaction Documents. The Company acknowledges
that the Purchase Price of the Class B Warrants was triggered by a
ratchet and the new Purchase Price is $1.01, subject to further
reduction as described in the Transaction Documents.
5. The Company acknowledges that the
holding period of the Notes, Warrants and Common Stock issuable
upon conversion of the Notes commenced on December 31, 2007,
for purposes of Rule 144 under the Securities Act of
1933,
6. The Company undertakes to make a
public announcement on Form 8-K describing the terns of this
Agreement not later than the fourth business day after the
execution of this Agreement.
7. 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.
8. Subject to the modifications and
amendments provided herein, the Transaction Documents shall remain
in full force and effect, including but not limited to the accrual
of interest and li
