MODIFICATION, WAIVER AND ACKNOWLEDGEMENT AGREEMENT

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