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

  






 






Supplemental Agreement


relating to the sale of


Land and Building at


Bude Stratton
Industrial Estate









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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