Exhibit 10.1

DATED

 

2007

 

(1)

 

TRIPOS DISCOVERY RESEARCH LIMITED

 

 

 

(2)

 

SOUTH WEST OF ENGLAND REGIONAL DEVELOPMENT AGENCY

 

 

 

(3)

 

TRIPOS, INC

 

 

 

(4)

 

COMMONWEALTH BIOTECHNOLOGIES, INC

 

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Supplemental Agreement

relating to the sale of

Land and Building at

Bude Stratton Industrial Estate

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www.ashfords.co.uk

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THIS SUPPLEMENTAL DEED is made the   day of          Two Thousand and Seven

BETWEEN

(1)            TRIPOS DISCOVERY RESEARCH LIMITED incorporated and registered in
England and Wales with company number 02493812 whose registered office is at The
Courtyard, High Street, Ascot, Berkshire (“Tripos Discovery”)

(2)            SOUTH WEST OF ENGLAND REGIONAL DEVELOPMENT AGENCY (a body
corporate under the Regional Development Agencies Act 1998) of Sterling House,
Dix’s Field, Exeter, Devon, EX1 1QA ( “Agency”)

(3)            TRIPOS INC a company incorporated in Utah whose registered office
is situated at 1699 South Hanley Road, St. Louis, Missouri 63144, USA (“Tripos”)

(4)            COMMONWEALTH BIOTECHNOLOGIES, INC, a company incorporated in
Virginia whose registered office is situated at 601 Biotech Drive, Richmond,
Virginia 23235, USA (“CBI”)

BACKGROUND

1.             THE AGENCY AND THE TRIPOS DISCOVERY HAVE TODAY ENTERED INTO AN
AGREEMENT FOR SALE (“THE PROPERTY SALE AGREEMENT”) IN RELATION TO LAND AND
BUILDINGS AT BUDE STRATTON INDUSTRIAL ESTATE, BUDE, DEVON, ENGLAND (“THE
PROPERTY”).

2.             TRIPOS IS THE SOLE SHAREHOLDER IN TRIPOS DISCOVERY AND CBI WILL
BECOME THE SOLE SHAREHOLDER IN TRIPOS DISCOVERY UNDER THE SHARE SALE AGREEMENT
AND TRIPOS AND CBI HAVE AGREED WITH THE AGENCY THAT THE PROCEEDS OF THE SALE OF
THE PROPERTY WILL BE USED IN ACCORDANCE WITH THIS DEED.

3.             BY A GRANT OFFER LETTER (“THE GRANT LETTER”) DATED 23RD APRIL
2002 THE SECRETARY OF STATE OFFERED, AND TRIPOS DISCOVERY ACCEPTED, A GRANT NOT
EXCEEDING £2,400,000 TO CARRY OUT THE PROJECT THEREIN DESCRIBED.

4.             ON 24TH APRIL 2002 TRIPOS PROVIDED TO THE SECRETARY OF STATE AN
AUTHORISED PARENTAL UNDERTAKING AND GUARANTEE (“THE GUARANTEE”) THAT IF ANY SUMS
BECAME REPAYABLE BY TRIPOS DISCOVERY UNDER THE TERMS OF THE GRANT LETTER AND
TRIPOS DISCOVERY DID NOT REPAY ON FIRST DEMAND, TRIPOS WOULD PAY THE SECRETARY
OF STATE THE AMOUNT REPAYABLE TOGETHER WITH INTEREST.

5.             IN APRIL 2006 TRIPOS DISCOVERY ALERTED THE SECRETARY OF STATE TO
THE FACT THAT THEY HAD MADE STAFF REDUNDANT AND THAT THEIR PROSPECTS OF MEETING
THE PROJECT TARGETS WERE REMOTE.

6.             THE SECRETARY OF STATE IS UNDERSTOOD TO BE WILLING TO RELEASE THE
OBLIGATIONS IN THE GRANT LETTER AND THE GUARANTEE SUBJECT TO RECEIVING £591,000
AND BEING SATISFIED WITH THE EVENTUAL PLANS FOR THE CONTINUATION AND DEVELOPMENT
OF THE TRIPOS DISCOVERY BUSINESS.

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IT IS AGREED as follows:

1.             IN THIS AGREEMENT THE FOLLOWING EXPRESSIONS SHALL HAVE THE
FOLLOWING MEANINGS RESPECTIVELY:

AGENCY’S SOLICITORS: ASHFORDS OF GRENADIER ROAD EXETER EX1 3LH OR SUCH OTHER
SOLICITORS AS THE AGENCY SHALL APPOINT FOR THE PURPOSES OF THIS DEED AND NOTIFY
TO TRIPOS

Condition: has the meaning given in clause 2.1

CONNECTED PERSON: HAS THE SAME MEANING AS IN SECTION 839 OF THE INCOME AND
CORPORATION TAXES ACT 1988

BALANCE PROCEEDS OF SALE: THE PURCHASE PRICE PAYABLE UNDER THE AGREEMENT FOR
SALE LESS THE ESCROW MONIES

DEED OF RELEASE: A RELEASE OF TRIPOS DISCOVERY AND TRIPOS FROM THE OBLIGATIONS
UNDER THE GRANT LETTER (OTHER THAN THE OBLIGATION IN PARAGRAPH 8 OF THE GRANT
LETTER IN RELATION TO ENQUIRES BY THE EUROPEAN COMMISSION) AND THE GUARANTEE

ESCROW ACCOUNT: A CLIENT ACCOUNT OPERATED BY THE AGENCY’S SOLICITORS

ESCROW MONIES: £520,000 FROM THE PURCHASE MONIES PAYABLE UNDER THE PROPERTY SALE
AGREEMENT

Insolvent:  means Tripos Discovery is:

a.            Insolvent or unable to pay it’s debts within the meaning of
Section 123 Insolvency Act 1986 or has stopped paying it’s debts as they fall
due;

b.            An order has been made, petition presented, resolution passed,
meeting convened or any steps have been taken for the winding up of Tripos
Discovery;

c.            An administrator, liquidator, provisional liquidator, receiver
(including administrative receiver) has been appointed or steps have been taken
to appoint one in respect of Tripos Discovery or in respect of all or any part
of the assets of Tripos Discovery;

d.            Distress, execution or other process has been levied or threatened
in writing in respect of any asset of Tripos Discovery;

e.            A voluntary arrangement, compromise or scheme of arrangement has
been proposed, sanctioned or approved in respect of Tripos Discovery;

f.              Tripos Discovery has been removed or there is an application
pending for the removal of Tripos Discovery from the Register of Companies

Release Confirmations: written confirmations from:

(a) the Secretary of State that the Secretary of State has agreed to grant to
Tripos and Tripos Discovery a release of the obligations under the Grant Letter
and Guarantee; and

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(b) Tripos Discovery and Tripos that the Deed of Release is in a satisfactory
form.

Share Sale Agreement: an agreement dated 11 May 2007 for the acquisition by CBI
of all the share capital in Tripos Discovery

Termination Date: 24 June 2007 or such later date as all the parties agree in
writing

1.1.          IN THIS DEED REFERENCES TO;

1.1.1.       ANY STATUTE OR ANY SECTION THEREOF OR LEGISLATION GENERALLY INCLUDE
ANY STATUTORY EXTENSION OR MODIFICATION, AMENDMENT OR RE-ENACTMENT OF SUCH
STATUTES AND INCLUDE ALL INSTRUMENTS, ORDERS, BYE-LAWS AND REGULATIONS FOR THE
TIME BEING MADE, ISSUED OR GIVEN THEREUNDER OR DERIVING VALIDITY THEREFROM, AND
ALL OTHER LEGISLATION OF THE EUROPEAN COMMUNITY THAT IS DIRECTLY APPLICABLE TO
THE UNITED KINGDOM.

1.1.2.       ANY CLAUSE, SUB-CLAUSE, PARAGRAPH, SUB-PARAGRAPH OR SCHEDULE
WITHOUT FURTHER DESIGNATION SHALL BE CONSTRUED AS A REFERENCE TO THE CLAUSE,
SUB-CLAUSE, PARAGRAPH, SUB-PARAGRAPH OR SCHEDULE TO THIS DEED SO NUMBERED;

1.1.3.       THIS DEED INCLUDES ANY VARIATIONS HERETO MADE FROM TIME TO TIME AND
ANY AGREEMENT EXPRESSED TO BE SUPPLEMENTAL HERETO;

1.1.4.       WORDS IMPORTING ONE GENDER SHALL INCLUDE BOTH GENDERS AND THE
SINGULAR SHALL INCLUDE THE PLURAL AND VICE VERSA.

2.            PRE-CONDITION

2.1.          THIS AGREEMENT IS CONDITIONAL UPON; CLOSING THE SHARE SALE
AGREEMENT; OBTAINING THE RELEASE CONFIRMATIONS; AND THE EXCHANGE AND COMPLETION
OF THE PROPERTY SALE AGREEMENT, PRIOR TO THE TERMINATION DATE.

2.2.          THE PROVISIONS OF CLAUSES 3, AND 4 TAKE EFFECT FROM THE
SATISFACTION OF THE CONDITION.

2.3.          IF THE CONDITION IS NOT SATISFIED BY THE TERMINATION DATE THEN
THIS AGREEMENT IS AT AN END AND OF NO FURTHER EFFECT.

3.            PAYMENT TO THE SECRETARY OF STATE

3.1.          TRIPOS, CBI AND TRIPOS DISCOVERY AGREE THAT THE ESCROW MONIES
SHALL BE HELD IN THE ESCROW ACCOUNT UNTIL THE AGENCY RECEIVES THE RELEASE
CONFIRMATIONS.

3.2.          UPON RECEIPT OF THE LAST OF THE RELEASE CONFIRMATIONS THE AGENCY
SHALL PROCURE THAT THE ESCROW MONIES ARE PAID TO THE SECRETARY OF STATE TO BE
HELD TO ORDER PENDING THE COMPLETION OF THE DEED OF RELEASE.

3.3.          IF PRIOR TO THE RECEIPT OF THE OF THE RELEASE CONFIRMATIONS THE
AGENCY RECEIVES NOTICE FROM THE SECRETARY OF STATE THAT HE HAS DEMANDED PAYMENT
OF SUMS WHICH HAVE BECOME REPAYABLE BY TRIPOS DISCOVERY OR PAYABLE BY TRIPOS
UNDER THE GRANT LETTER AND GUARANTEE RESPECTIVELY,  THEN THE AGENCY SHALL
PROCURE THAT THE ESCROW MONIES ARE PAID TO THE SECRETARY OF STATE TOWARDS
PAYMENT OF THE SUMS DEMANDED.

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4.            PROCEEDS OF SALE

4.1.          TRIPOS, CBI AND TRIPOS DISCOVERY JOINTLY AND SEVERALLY UNDERTAKE
TO THE AGENCY THAT THE BALANCE OF THE PROCEEDS OF SALE SHALL BE RETAINED BY
TRIPOS DISCOVERY TO BE USED;

4.1.1.       AS REQUIRED UNDER THE PROPERTY SALE AGREEMENT;

4.1.2.       TO REPAY EXISTING FINANCE AGREEMENTS IN RELATION TO PLANT AND
EQUIPMENT AT THE PROPERTY IN ACCORDANCE WITH THE REPAYMENT SCHEDULE ATTACHED OR
SUCH OTHER REPAYMENT SCHEME AS IS APPROVED IN WRITING BY THE AGENCY; AND

4.1.3.       AS WORKING CAPITAL FOR THE TRIPOS DISCOVERY BUSINESS CARRIED ON AT
THE PROPERTY.

4.2.          TRIPOS, CBI AND TRIPOS DISCOVERY JOINTLY AND SEVERALLY UNDERTAKE
TO THE AGENCY THAT THE BALANCE PROCEEDS OF SALE WILL NOT BE USED TO PAY
DIVIDENDS, MANAGEMENT CHARGES, OR OTHER SUMS NOW OR IN THE FUTURE DUE TO:

4.2.1.       TRIPOS OR ANY CONNECTED PERSON TO TRIPOS, OR BY OTHER MEANS BE
PASSED TO TRIPOS OR ANY CONNECTED PERSON TO TRIPOS; OR

4.2.2.       CBI OR ANY CONNECTED PERSON TO CBI, OR BY OTHER MEANS PASSED BE TO
CBI OR ANY CONNECTED PERSON TO CBI.

4.3.          TRIPOS, CBI AND TRIPOS DISCOVERY JOINTLY AND SEVERALLY AGREE TO
PROVIDE THE AGENCY WITH ALL SUCH INFORMATION AS THE AGENCY MAY REQUIRE IN ORDER
TO SATISFY ITSELF THAT CLAUSES 4.1 AND 4.2 HAVE BEEN COMPLIED WITH, AND SHALL
PROVIDE ACCESS FOR INSPECTION AND COPYING PURPOSES ONLY TO RELEVANT INFORMATION
WITHIN THEIR POSSESSION.

4.4.          TRIPOS UNDERTAKES TO THE AGENCY TO PAY OR REPAY TO TRIPOS
DISCOVERY, OR, IF TRIPOS DISCOVERY BECOMES INSOLVENT OR CEASES TO TRADE FROM THE
PROPERTY , AS THE AGENCY DIRECTS, ANY OF THE BALANCE OF THE PROCEEDS OF SALE;

4.4.1.       RECEIVED OR HELD BY TRIPOS, OR ANY CONNECTED PERSON TO TRIPOS, IN
BREACH OF CLAUSE 4.2; OR

4.4.2.       WHICH THE AGENCY IS REASONABLE SATISFIED, ACTING IN GOOD FAITH, ARE
NOT USED IN ACCORDANCE WITH CLAUSE 4.1.

4.5.          CBI UNDERTAKES TO THE AGENCY TO PAY OR REPAY TO TRIPOS DISCOVERY,
OR, IF TRIPOS DISCOVERY BECOMES INSOLVENT OR CEASES TO TRADE FROM THE PROPERTY,
AS THE AGENCY DIRECTS, ANY OF THE BALANCE OF THE PROCEEDS OF SALE;

4.5.1.       RECEIVED OR HELD BY CBI, OR ANY CONNECTED PERSON TO CBI, IN BREACH
OF CLAUSE 4.2, OR

4.5.2.       WHICH THE AGENCY IS REASONABLE SATISFIED, ACTING IN GOOD FAITH, ARE
NOT USED IN ACCORDANCE WITH CLAUSE 4.1.

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4.6.          THE PROVISIONS OF SECTION 4.1 AND 4.4 SHALL BE BINDING UPON TRIPOS
ONLY WITH REGARDS TO MATTERS ARISING WHILST TRIPOS IS A SHAREHOLDER OF TRIPOS
DISCOVERY, OR WHILST TRIPOS DISCOVERY IS ACTING IN ACCORDANCE WITH OBLIGATIONS
TO OR THE REQUIREMENTS OF TRIPOS.

4.7.          IN DETERMINING WHETHER THE BALANCE PROCEEDS OF SALE HAVE BEEN USED
IN ACCORDANCE WITH CLAUSE 4.1 AND IN CALCULATING ANY SUM TO BE PAID OR REPAID
UNDER CLAUSES 4.4 AND 4.5, CLAUSE 4.1.3 SHALL BE DEEMED TO HAVE BEEN SUBJECT TO
THE FOLLOWING PROVISO IF TRIPOS DISCOVERY BECOMES INSOLVENT OR CEASES TO TRADE
FROM THE PROPERTY PRIOR TO 31 DECEMBER 2008;

“PROVIDED ALWAYS THAT THE AGGREGATE EXPENDITURE UNDER THIS CLAUSE 4.1.3 SHALL
NOT EXCEED £250,000 PRIOR TO THE REPAYMENT IN FULL OF ALL THE EXISTING FINANCE
AGREEMENTS IN RELATION TO PLANT AND EQUIPMENT AT THE PROPERTY”

4.8.          CBI AGREES TO:

4.8.1.       COMPLY WITH SUCH MONITORING AND REPORTING REQUIREMENTS RELATING TO
TRIPOS DISCOVERY AND THE TRIPOS DISCOVERY BUSINESS AS THE AGENCY MAY FROM TIME
TO TIME REQUIRE;

4.8.2.       NOTIFY THE AGENCY AS SOON AS POSSIBLE OF ANY MEETINGS OF THE BOARD
OF DIRECTORS OF TRIPOS DISCOVERY AND ALLOW A REPRESENTATIVE OF THE AGENCY TO
ATTEND AND PARTICIPATE IN SUCH MEETINGS.

4.9.          THE AGENCY CONFIRMS THAT IN CONSIDERATION OF THE AGREEMENTS MADE
HEREIN, TRIPOS IS RELEASED FROM ITS OBLIGATIONS AS GUARANTOR UNDER THE
DEVELOPMENT AGREEMENT DATED 19TH JUNE 2003.

5.            JURISDICTION

This Deed shall be governed by and construed in accordance with the laws of
England and each of the parties irrevocably submits to the exclusive
jurisdiction of the English courts and waives any objection to proceedings in
such courts on the grounds of venue or on the grounds that proceedings have been
brought in an inappropriate forum.

6.            COUNTERPARTS

This agreement may be executed in any number of counterparts (but shall not be
effective until each party has executed at least one counterpart), each of
which, when executed and delivered, shall be an original and which together
shall have the same effect as if each party had executed and delivered the same
document.

7.            LIABILITY AND SEVERANCE

7.1.          THE AGENCY MAY TAKE ACTION AGAINST, OR RELEASE OR COMPROMISE THE
LIABILITY OF, ANY OF THE OTHER PARTIES, OR GRANT TIME OR OTHER INDULGENCE,
WITHOUT AFFECTING THE LIABILITY OF ANY OTHER PARTIES.

7.2.          IF ANY PROVISION OF THIS AGREEMENT (OR PART OF ANY PROVISION) IS
FOUND BY ANY COURT OR OTHER AUTHORITY OF COMPETENT JURISDICTION TO BE INVALID,
UNENFORCEABLE OR ILLEGAL, THE OTHER PROVISIONS SHALL REMAIN IN FORCE.

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7.3.          IF ANY INVALID, UNENFORCEABLE OR ILLEGAL PROVISION WOULD BE VALID,
ENFORCEABLE AND LEGAL IF SOME PART OF IT WERE DELETED, THE PROVISION SHALL APPLY
WITH WHATEVER MODIFICATION IS NECESSARY TO GIVE EFFECT TO THE COMMERCIAL
INTENTION OF THE PARTIES.

7.4.          THE PARTIES AGREE, IN THE CIRCUMSTANCES REFERRED TO IN CLAUSE 7.1
AND IF CLAUSE 7.2 DOES NOT APPLY, TO ATTEMPT TO SUBSTITUTE FOR ANY INVALID OR
UNENFORCEABLE PROVISION A VALID AND ENFORCEABLE PROVISION WHICH ACHIEVES, TO THE
GREATEST EXTENT POSSIBLE, THE SAME EFFECT AS WOULD HAVE BEEN ACHIEVED BY THE
INVALID OR UNENFORCEABLE PROVISION. THE OBLIGATIONS OF THE PARTIES UNDER ANY
INVALID OR UNENFORCEABLE PROVISION OF THIS AGREEMENT SHALL BE SUSPENDED WHILE AN
ATTEMPT AT SUCH SUBSTITUTION IS MADE.

This document has been executed as a deed and is delivered and takes effect on
the date stated at the beginning of it.

THE CORPORATE SEAL of

)

the SOUTH WEST OF ENGLAND

)

REGIONAL DEVELOPMENT

)

AGENCY hereto affixed is

)

authenticated by:

)

 

 

 

Authorised Signatory

 

 

 

Authorised Signatory

 

 

EXECUTED as a deed and delivered

)

on the date hereof by Tripos

)

Discovery Research Limited

)

acting by two of its directors or

)

a director and its secretary

)

 

 

 

 

/s/ John P. McAlister

 

 

Director

 

 

 

 

 

/s/ Simon Cole

 

 

Director/Secretary

 

 

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EXECUTED as a deed by Tripos

)

Inc and signed by John P. McAlister

)

and Ralph Lobdell.

       )

acting, in accordance with the law

)

of Utah under the authority of Tripos

)

Inc pursuant to a resolution of the

)

Board/shareholders dated May 30, 2007

)

 

 

/s/ John P. McAlister

 

 

 

 

 

 

/s/ Ralph Lobdell

 

 

 

EXECUTED as a deed by

)

Commonwealth Biotechnologies,

)

Inc and signed by Richard J. Freer,

)

acting, in accordance with the law

)

of Virginia under the authority of

)

Commonwealth Biotechnologies,

)

Inc pursuant to a resolution of the

)

Board/shareholders dated May 1, 2007.

)

 

 

 

 

 

/s/ Richard J. Freer

 

 

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