Document:

Exhibit 10.3

EXECUTION COPY

AMENDED AND RESTATED STOCK PURCHASE AND SALE
AGREEMENT

by and among

Tripos, Inc.,

a Utah corporation,

Tripos UK Holdings Limited,

a private limited company incorporated in
England,

and

Commonwealth Biotechnologies, Inc.,

a Virginia corporation

Dated as of June 6,
2007

TABLE OF CONTENTS

	
  

  	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 1

  	
   

  	
  1

  
	
  PURCHASE AND SALE OF SHARES

  	
   

  	
  1

  
	
  1.1.

  	
   

  	
  Sale and Delivery of Shares

  	
   

  	
  1

  
	
  ARTICLE 2

  	
   

  	
  2

  
	
  PURCHASE PRICE

  	
   

  	
  2

  
	
  2.1.

  	
   

  	
  Payment of Purchase Price

  	
   

  	
  2

  
	
  ARTICLE 3

  	
   

  	
  2

  
	
  REPRESENTATIONS AND WARRANTIES
  OF SELLER

  	
   

  	
  2

  
	
  3.1

  	
   

  	
  Organization, Good Standing and Qualification

  	
   

  	
  2

  
	
  3.2

  	
   

  	
  Capitalization

  	
   

  	
  2

  
	
  3.3

  	
   

  	
  Corporate Authority and Approvals

  	
   

  	
  2

  
	
  3.4

  	
   

  	
  Title to Shares and Assets

  	
   

  	
  3

  
	
  3.5

  	
   

  	
  Government Filings; No Violations or Conflicts

  	
   

  	
  3

  
	
  3.6

  	
   

  	
  Litigation

  	
   

  	
  3

  
	
  3.7

  	
   

  	
  Brokers

  	
   

  	
  3

  
	
  3.8

  	
   

  	
  Compliance with Laws, Permits

  	
   

  	
  3

  
	
  3.9

  	
   

  	
  Environmental Matters

  	
   

  	
  3

  
	
  3.10

  	
   

  	
  Labor Matters

  	
   

  	
  4

  
	
  3.11

  	
   

  	
  Intellectual Property

  	
   

  	
  4

  
	
  ARTICLE 4

  	
   

  	
  5

  
	
  REPRESENTATIONS AND WARRANTIES
  OF PURCHASER

  	
   

  	
  5

  
	
  4.1

  	
   

  	
  Organization and Authority

  	
   

  	
  5

  
	
  4.2

  	
   

  	
  Compliance with Other Instruments

  	
   

  	
  5

  
	
  4.3

  	
   

  	
  Brokers

  	
   

  	
  5

  
	
  ARTICLE 5

  	
   

  	
  6

  
	
  COVENANTS OF PURCHASER

  	
   

  	
  6

  
	
  5.1

  	
   

  	
  Additional Advances

  	
   

  	
  6

  
	
  5.2

  	
   

  	
  Employee Matters

  	
   

  	
  6

  
	
  5.3

  	
   

  	
  Filing Assistance

  	
   

  	
  6

  
	
  5.4

  	
   

  	
  Use of Name

  	
   

  	
  6

  
	
  5.5

  	
   

  	
  Post-Closing Collections

  	
   

  	
  6

  
	
  5.6

  	
   

  	
  DTI Repayment and Consent

  	
   

  	
  7

  
	
  ARTICLE 6

  	
   

  	
  7

  
	
  6.1

  	
   

  	
  Representations and Warranties

  	
   

  	
  7

  
	
  6.2

  	
   

  	
  Absence of Litigation

  	
   

  	
  7

  
	
  6.3

  	
   

  	
  Consents and Approvals

  	
   

  	
  7

  
	
  6.4

  	
   

  	
  SWERDA Transaction

  	
   

  	
  8

  
	
  6.5

  	
   

  	
  Equipment Lessor Consent

  	
   

  	
  8

  
	
  6.6

  	
   

  	
  License Agreement

  	
   

  	
  8

  
	
  6.8

  	
   

  	
  Prior Intercompany Liabilities

  	
   

  	
  8

  
	
  ARTICLE 7

  	
   

  	
  8

  
	
  CONDITIONS PRECEDENT TO
  SELLER’S OBLIGATIONS

  	
   

  	
  8

  
	
  7.1

  	
   

  	
  Representations and Warranties

  	
   

  	
  8

  
	
  7.2

  	
   

  	
  Absence of Litigation

  	
   

  	
  8

  
	
  7.3

  	
   

  	
  Consents and
  Approvals

  	
   

  	
  9

  
	
  7.4

  	
   

  	
  SWERDA Transaction

  	
   

  	
  9

  
	
  7.5

  	
   

  	
  U.S. Employees

  	
   

  	
  9

  
	
  7.6

  	
   

  	
  UK Executives

  	
   

  	
  9

  
	
  7.7

  	
   

  	
  Board Approval

  	
   

  	
  9

  
	
  ARTICLE 8

  	
   

  	
  9

  
	
  CLOSING

  	
   

  	
  9

  
	
  8.1

  	
   

  	
  Closing

  	
   

  	
  9

  

 

 i
 

 

	
  8.2

  	
   

  	
  Deliveries by Parent and Seller

  	
   

  	
  9

  
	
  8.3

  	
   

  	
  Deliveries by Purchaser

  	
   

  	
  10

  
	
  8.4

  	
   

  	
  Cost Reimbursement

  	
   

  	
  10

  
	
  ARTICLE 9

  	
   

  	
  10

  
	
  MISCELLANEOUS

  	
   

  	
  10

  
	
  9.1

  	
   

  	
  Survival of Representations
  and Warranties

  	
   

  	
  10

  
	
  9.2

  	
   

  	
  Publicity

  	
   

  	
  10

  
	
  9.3

  	
   

  	
  Commercially Reasonable Efforts

  	
   

  	
  10

  
	
  9.4

  	
   

  	
  Further Acts and Assurances

  	
   

  	
  10

  
	
  9.5

  	
   

  	
  Notices

  	
   

  	
  11

  
	
  9.6

  	
   

  	
  Construction

  	
   

  	
  12

  
	
  9.7

  	
   

  	
  Knowledge

  	
   

  	
  12

  
	
  9.8

  	
   

  	
  Attachments

  	
   

  	
  12

  
	
  9.9

  	
   

  	
  Parties Bound by Agreement

  	
   

  	
  12

  
	
  9.10

  	
   

  	
  Counterparts

  	
   

  	
  12

  
	
  9.11

  	
   

  	
  Headings

  	
   

  	
  12

  
	
  9.12

  	
   

  	
  Modification and Waiver

  	
   

  	
  12

  
	
  9.13

  	
   

  	
  Severability

  	
   

  	
  12

  
	
  9.14

  	
   

  	
  Access to Records

  	
   

  	
  13

  
	
  9.15

  	
   

  	
  Entire Agreement

  	
   

  	
  13

  
	
  9.16

  	
   

  	
  Certain Definitions

  	
   

  	
  13

  

 

 ii

AMENDED AND RESTATED STOCK PURCHASE AND SALE
AGREEMENT

THIS AMENDED AND RESTATED STOCK PURCHASE AND SALE
AGREEMENT (this “Agreement”), made and entered into this 6th day of June, 2007, by and among Tripos, Inc.,
a Utah corporation (“Parent”), Tripos UK Holdings Limited, a wholly-owned
subsidiary of Parent and a private limited company incorporated in England (“Seller”),
and, Commonwealth Biotechnologies, Inc., a Virginia corporation (“Purchaser”).

RECITALS

1.             Seller is the owner of
a discovery research business (the “Business”) conducted through the operation
of its wholly-owned subsidiary Tripos Discovery Research Ltd. (“TDR”);

2.             Purchaser desires to
purchase from Seller, and Seller desires to sell to Purchaser, all of the
issued and outstanding share capital of TDR comprising 101,000 shares of £1.00
each (the “Acquired Shares”), which transfer shall cause the Purchaser to own
one hundred percent (100%) of TDR, all for the purchase price and subject to
the terms and conditions set forth in this Agreement; and

3.             On May 11, 2007, Seller
and Purchaser entered into a Stock Purchase and Sale Agreement.

4.             On May 12, 2007,
Purchaser remitted to Seller $350,000 as a non-refundable deposit for the
purchase price hereunder.

NOW, THEREFORE, in consideration of the premises
and the representations, warranties, covenants and agreements contained herein,
the receipt and sufficiency of which are hereby acknowledged, the parties
hereto, intending to be legally bound, hereby agree as follows:

ARTICLE 1

PURCHASE AND SALE OF SHARES

1.1.          Sale and Delivery of
Shares.  Subject to the
terms and conditions hereof, Seller agrees to sell, assign, transfer and
deliver, or cause to be sold, assigned, transferred and delivered, to
Purchaser, and Purchaser agrees to purchase and accept from Seller at the “Closing”
(as hereinafter defined), all of Seller’s right, title and interest in and to
the Acquired Shares for the Purchase Price (as defined in Article 2 hereof).

ARTICLE 2

PURCHASE PRICE

2.1.          Payment of Purchase
Price.  The total consideration for the Acquired
Shares (the “Purchase Price”) shall be three hundred fifty thousand  dollars US ($350,000.00) (the “Consideration”).  Purchaser delivered to the Seller the Purchase
Price on May
12, 2007.

ARTICLE 3

REPRESENTATIONS AND WARRANTIES OF SELLER

Except as set forth in the Seller disclosure schedule attached to this
Agreement (the “Seller Disclosure Schedule”) (with respect to which any
particular reference to a section or subsection of this Agreement shall be
deemed to be disclosed under all other sections or subsections of this
Agreement), each of the Seller and Parent hereby represents and warrants to
Purchaser that:

3.1           Organization, Good
Standing and Qualification.  Parent is a corporation duly organized,
validly existing and in good standing under the laws of the State of Utah, and
each of Seller and  TDR is a limited company duly incorporated
and validly existing under the laws of England
and Wales.  Seller and TDR each has all
requisite corporate or similar power and authority to own and operate its properties and assets and to carry on its
business as presently conducted and is qualified to do business in each
jurisdiction where the ownership or operation of its properties or conduct of
its business requires such qualification.

3.2           Capitalization.  The Acquired Shares constitute the entire
allotted and issued share capital of TDR and are fully paid or credited as
fully paid.  Seller is the sole legal and
beneficial owner of the entire allotted and issued share capital of TDR.  The issued shares of TDR are fully paid up
and, free from Encumbrances.  There are
no preemptive or other outstanding rights, options, warrants, conversion
rights, redemption rights or repurchase rights to issue or sell any shares of
TDR or any securities or obligations convertible or exchangeable into or
exercisable for, or giving any Person a right to subscribe for or acquire, any
securities of TDR.

3.3           Corporate Authority and Approvals.  Each of Parent and Seller has the necessary
corporate power and authority and has taken all corporate action necessary in
order to execute, deliver and perform its obligations under this Agreement and
to carry out and complete the sale of the Acquired Shares.  The execution and delivery of this Agreement
by Parent and Seller and the consummation by Parent and Seller of the
transactions contemplated hereby have been duly and validly authorized by all
necessary corporate action and no other corporate proceedings on the part of
Parent or Seller are necessary to authorize this Agreement or to consummate the
transactions contemplated hereby to the extent required under the UBCA or the
laws of England or Wales.  This Agreement
has been duly executed and delivered by both Parent and Seller and, assuming
the due authorization, execution and delivery by Purchaser, constitutes a
legal, valid and binding obligation of both Parent and Seller, enforceable
against Parent and Seller in accordance with its terms, except as such
enforceability may be limited in either case by bankruptcy, insolvency,
reorganization, moratorium and other similar laws of general applicability
relating to or affecting

 2
 

creditors’
rights generally and by the application of general principles of equity
(regardless of whether enforcement is sought in a proceeding at law or in
equity).

3.4           Title to Shares and
Assets.  The Seller has marketable title to the
Acquired Shares free and clear
of all Encumbrances.  Except as set forth in Section 3.4 of the Seller
Disclosure Schedule, and except for capital leases or security to Parent for
advances made to TDR, Seller has marketable title to all of the assets of the
Business, free and clear of all Encumbrances, except liens for taxes not yet
due and payable.

3.5           Government Filings; No Violations or
Conflicts.  Except
as set forth in Section 3.5 of the Seller Disclosure Schedule, the
execution and delivery of this Agreement by Parent and Seller do not, and the
performance by Parent and Seller of their respective obligations under this
Agreement will not, (i) conflict with or violate the organizational documents
of Parent, Seller, or TDR, or (ii) conflict with or violate any law, statute,
ordinance, rule, regulation, order, judgment or decree applicable to Parent,
Seller or TDR.

3.6           Litigation.  No suit, proceeding, hearing or governmental
investigation is pending or, to the knowledge of Seller, threatened in writing
against Seller or TDR.

3.7           Brokers.  Neither
Parent, Seller nor any of their executive officers, directors or employees has
employed any broker or finder or incurred any liability for any brokerage fees,
commissions or finders fees in connection with the transactions contemplated by
this Agreement, except that for any agreement with Seven Hills Partners LLC for
financial advisory services rendered to Parent at sole expense of Parent.

3.8           Compliance with
Laws, Permits.  TDR holds all permits, licenses and approvals
(none of which has been modified or rescinded and all of which are in full
force and effect) from all necessary for TDR to carry on the Business as
presently conducted (collectively, the “Permits”).  The Business is not being conducted in
material violation of any applicable law, statute, ordinance, regulation,
judgment, Permit, order, decree, concession, grant or other authorization of
any Governmental Entity.

3.9           Environmental
Matters.

(a)           In this Section 3.9:

(1)           “Dangerous Substance” means any natural or artificial
substance (whether solid, liquid or gas and whether alone or in combination
with any other substance or radiation) capable of causing harm to any human or
other living organism or damaging the Environment, public health or welfare.

(2)           “Environment” means the environmental media of air,
water and land, all living organisms and natural or man-made structures.

(3)           “Environmental Law” means all law in England and Wales
relating to the protection of human health or the Environment, the conditions
of the

 3
 

workplace
or the generation, transportation, storage, treatment, emission or disposal of
a Dangerous Substance or Waste.

(4)           “Environmental License” means any authorization,
license, consent or permission required under any Environmental Law.

(5)           “Waste” means any unwanted or surplus substance
irrespective of whether it is capable of being recycled or recovered or has any
value.

(b)          TDR has at all times complied in all material respects
with Environmental Law and obtained, and complied with, all Environmental
Licenses necessary for carrying on the Business and is not in material breach
of any Environmental Law.

(c)          The Environmental Licenses necessary for carrying on the
Business are in full force and effect and there are no circumstances existing
which will give rise to the suspension or revocation of, to lead to the
imposition of unusual or onerous conditions on, or to prejudice the renewal of,
any of those licenses.

3.10         Labor
Matters.

(a)           Seller has made available to Purchaser copies of all
standard form contracts and handbooks and policies which apply to the
employees, officers and directors of TDR.

(b)           There is no outstanding claim against TDR by any Person
who is now or has been an employee or officer of TDR.

(c)           TDR is not party to any collective bargaining agreement
with any trade union or staff association other than as required by government
regulation.

(d)           TDR
has not formally recognized a trade union and is not a party to any agreement
with any trade union or group or organization representing employees in respect
of its employees.

(e)           TDR has not in the last six (6) years provided, or agreed to provide,
any loan, gratuitous payment or gratuitous benefit to any of its directors,
officers or employees or any of their dependants which remains outstanding.

3.11         Intellectual
Property.

(a)           For purposes of this Section 3.11, “Business
Intellectual Property” means all of the: 
(i) patents and patent applications; (ii) registered trademarks and
trademark applications and material unregistered trademarks; (iii) copyrights;
and (iv) registered domain names owned by TDR and used in the Business.

(b)           The registrations in connection with the Business
Intellectual Property are valid and subsisting, all necessary registration and
renewal fees in connection with such

 4
 

registrations
have been paid, and all necessary documents and certificates in connection with
such registrations have been filed with the relevant authorities for the
purposes of maintaining such registrations.

(c)           There are no contracts, licenses and agreements between
Parent, Seller or TDR, on the one hand, and any other Person, on the other
hand, relating primarily to the Business Intellectual Property as to which
there is any dispute regarding the scope of such agreement, or performance
under such agreement including with respect to any payments to be made or
received by TDR thereunder.

(d)           Neither Parent, Seller or TDR has received notice from
any Person that the operation of the Business, including the design,
development, manufacture and sale of products and provision of services
infringes the intellectual property of any Person.

(e)           To the knowledge of Parent and Seller, no Person is
materially infringing any of the Business Intellectual Property.

ARTICLE 4

REPRESENTATIONS AND WARRANTIES OF PURCHASER

Purchaser hereby represents and warrants to Seller as
follows:

4.1           Organization and Authority.

(a)           Purchaser is a corporation duly incorporated, validly
existing and in good standing under the laws of the Commonwealth of
Virginia.  Purchaser has all requisite
corporate power and authority to execute and deliver this Agreement and perform
its obligations hereunder.

(b)           The execution and delivery of this Agreement by
Purchaser and the performance of its obligations hereunder, have been duly
authorized by all necessary corporate action on the part of Purchaser.  This Agreement has been duly executed and
delivered by Purchaser and constitutes a valid and binding obligation of
Purchaser, enforceable against Purchaser in accordance with its terms, except
as such enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium and other similar laws of general applicability
relating to or affecting creditors’ rights generally and by the application of
general principles of equity (regardless of whether enforcement is sought in a
proceeding at law or in equity).

4.2           Compliance with Other Instruments.  The execution and delivery of this Agreement by
Purchaser and the performance by Purchaser of its obligations hereunder will
not (a) conflict with or result in any violation of the organizational
documents of Purchaser or (b) conflict with or violate any judgment, decree,
law or order applicable to Purchaser.

4.3           Brokers.  No finder, broker,
agent or other intermediary has acted for or on behalf of Purchaser in
connection with the negotiation and consummation of this Agreement or the
transactions contemplated hereby.

 5
 

ARTICLE 5

COVENANTS OF PURCHASER

Purchaser covenants and agrees with Seller as follows:

5.1           Additional Advances.  From and after May 14,
2007, Tripos has made advances of (a) £100,000, which is payable on or before
June 30, 2007 on the terms contained in a Promissory Note dated May 24, 2007,
and (b) £135,599.79, which has become due and payable on the date hereof.

5.2           Employee Matters.  Purchaser acknowledges
that it is a successor to the Business, and undertakes to obtain any consents
required under applicable law, to terminate any liability of Parent or Seller
for any unemployment compensation payments required to be made to any state or
county (or a fund maintained by it) after the Closing Date with respect to any
Employees of the Business.

5.3           Filing Assistance.  Purchaser shall, upon request by Parent,
furnish Parent with all information concerning itself, its subsidiaries,
directors, executive officers and stockholders and such other matters as may be
reasonably necessary or advisable in connection with any statement, filing,
notice or application made by or on behalf of Parent or Seller to any third
party or any Governmental Entity in connection with the transactions
contemplated by this Agreement.

5.4           Use of Name.  Notwithstanding any other provision of this
Agreement, from the Closing Date, Purchaser shall not, without the prior
written consent of Parent, utilize the name “Tripos” or any similar name other
than in accordance with the terms of the Software License Agreement, dated
March 20, 2007, between TDR and Tripos, L.P. (the “License Agreement”).

5.5           Post-Closing Collections.

(a)           On and following the
Closing Date but subject to Section 5.5(c), Parent shall have the right to
retain all collections otherwise payable to TDR on the receivables described in
Exhibit A hereto and to offset on a dollar-for-dollar basis these amounts
against amounts owed to Parent or its affiliates (other than TDR) by TDR.  Purchaser shall not take (nor permit TDR to
take) any action to hinder such collection and application.

(b)           As of the date hereof,
Schering-Plough has ordered from Parent compounds valued at $1,598,284 and
represented by Purchase Order 0000303433 dated March 14, 2007, of which
approximately $471,872 remains to be shipped and billed (the “Pending Order”).  Parent shall bill the Pending Order on the
same basis as it has billed the initial portion of the order and similar orders
prior to the date hereof.  Subject to
Section 5.5(c), Parent shall be entitled to retain the full proceeds of the
Pending Order.  The parties agree that
these receipts shall be applied to prior unpaid advances and that the Parent
shall also forgive $20,000 of unpaid advances as compensation to TDR for costs
to be incurred in finishing this order.

 6
 

(c)           The maximum amount to
which Parent and its affiliates shall be entitled under this Section 5.5 shall
be $1.8 million. To the extent that Parent and its affiliates received any
amounts under this Section 5.5 in excess of $1.8 million, Parent shall promptly
remit such excess amount to Purchaser. 
On the Closing Date all amounts held by Parent representing collections
of receivables referenced on Exhibit A (for purposes of illustration only,
approximately $1.2 million) shall be applied, dollar for dollar, to reduce the
balance owed under this Section 5.5(c).

5.6           DTI Repayment and
Consent.  In response to a request for repayment by the
U.K. Department of Trade and Industry (“DTI”), Parent and Seller shall allocate
and restrict twenty percent (20%) of the proceeds of the SWERDA Arrangement for
immediate repayment of prior grants by DTI, upon which DTI shall release from
escrow the definitive agreement relating thereto, which is presently being held
by DTI in escrow.

ARTICLE 6

CONDITIONS PRECEDENT TO
PURCHASER’S OBLIGATIONS

The obligations of Purchaser to consummate the
transactions contemplated by this Agreement are subject to the satisfaction of
each of the following conditions prior to or at the Closing, unless
specifically waived in writing by Purchaser in advance:

6.1           Representations and Warranties.

(a)           The representations and warranties of Parent and Seller
contained in this Agreement shall be true and correct in all respects as of the
date of this Agreement.

(b)           Each of Parent and Seller shall have duly performed and
complied in all respects with all covenants, agreements and conditions required
by this Agreement to be performed or complied with by Seller prior to or at the
Closing.

(c)           Seller shall have delivered a certificate executed by a
duly authorized officer to Purchaser to the foregoing effect.

6.2           Absence of
Litigation.  No order, writ, injunction or decree which is
binding on Purchaser, Parent and/or Seller and which prohibits Purchaser,
Parent and/or Seller from consummating the transactions contemplated hereby
shall be in effect; provided that Purchaser shall have used its commercially
reasonable efforts to have any such order, writ, injunction or decree lifted
and the same shall not have been lifted by any such court or governmental or
regulatory agency.

6.3           Consents and
Approvals.  All governmental and regulatory approvals
requisite or appropriate to the consummation of the transactions contemplated
herein shall have been obtained (or all applicable waiting periods shall have
expired) and shall remain in full force and effect.

 7

6.4           SWERDA Transaction.  Parent, Seller, TDR, Purchaser and the South
West of England Regional Development Agency (“SWERDA”) shall have executed one
or more definitive agreements (together, the “SWERDA Arrangement”) pursuant to
which (i) TDR shall sell to SWERDA, and SWERDA shall subsequently leaseback to
TDR, the property at Bude-Stratton Business Park, Bude, Cornwall, EX23 8LY,
(ii) SWERDA shall consent to the transactions contemplated hereby, and (iii)
SWERDA shall release each of Parent, Seller and TDR from all repayment
liabilities and related guaranties.

6.5           Equipment
Lessor Consent.  A consent shall have been obtained from CSI Leasing UK Ltd. (the “Equipment
Lessor”) with respect to all existing equipment leases between TDR and the
Equipment Lessor.

6.6           License Agreement.  The License Agreement shall be in full force
and effect.

6.7           Board Approval.

The
boards of directors of both Parent and Seller shall have approved the execution
of this Agreement and the transactions related thereto.

6.8           Prior Intercompany Liabilities.  Except to the extent of amounts to be repaid
under Sections 5.5 or intercompany liabilities listed on Exhibit B, all
intercompany liabilities between (i) Parent or Seller, on the one hand, and
(ii) TDR, on the other hand, will be fully discharged and cancelled in a manner
mutually satisfactory to Parent and Purchaser.

ARTICLE 7

CONDITIONS PRECEDENT TO SELLER’S OBLIGATIONS

The obligations of Seller to consummate the
transactions contemplated by this Agreement are subject to the satisfaction
prior to or at the Closing of each of the following conditions, unless
specifically waived in writing by Seller in advance:

7.1           Representations and Warranties.

(a)           The
representations and warranties of Purchaser contained in this Agreement shall
be true and correct as of the date of this Agreement.

(b)           Purchaser
shall have duly performed and complied with all covenants, agreements and
conditions required by this Agreement to be performed or complied with by
Purchaser prior to or at the Closing.

(c)           Purchaser
shall have delivered a certificate executed by a duly authorized officer to
Parent to the foregoing effect.

7.2           Absence of Litigation.  No order, writ, injunction or decree which is
binding on Purchaser, Parent and/or Seller and which prohibits Purchaser,
Parent and/or Seller from

 8
 

consummating the transactions contemplated hereby shall
be in effect; provided that Purchaser shall have used its commercially
reasonable efforts to have any such order, writ, injunction or decree lifted
and the same shall not have been lifted by any such court or governmental or
regulatory agency.

7.3           Consents and
Approvals.  All governmental and
regulatory approvals requisite or appropriate to the consummation of the
transactions contemplated herein shall have been obtained (or all applicable
waiting periods shall have expired) and shall remain in full force and effect.

7.4           SWERDA Transaction.  Parent, Seller, TDR, Purchaser and SWERDA
shall have executed the SWERDA Arrangement, pursuant to which (i) TDR shall
sell to SWERDA, and SWERDA shall subsequently leaseback to TDR, the property at
Bude-Stratton Business Park, Bude, Cornwall, EX23 8LY, (ii) SWERDA shall
consent to the transactions contemplated hereby, and (iii) SWERDA shall release
each of Parent, Seller and TDR from all repayment liabilities and related
guaranties.

7.5           U.S. Employees. 
Purchaser shall have made offers of employment to three U.S. employees
and employment shall have been accepted in each case in a form that relieves
Parent and Seller of all employment obligations to each of such individuals
effective upon Closing to the reasonable satisfaction of Parent and Seller.

7.6           UK Executives. 
Parent and Seller shall have been released from any ongoing obligations
with respect to severance and employment agreements of the officers or
employees of TDR.

7.7           Board Approval. 
The board of directors of Purchaser shall have approved the execution of
this Agreement and the transactions related thereto.

ARTICLE 8

CLOSING

8.1           Closing.  The closing of the transactions contemplated
by this Agreement (the “Closing”) shall take place at the offices of Hogan
& Hartson L.L.P., 111 South Calvert Street, Suite 1600, Baltimore, Maryland
21202, on the later of (i) the date of execution hereof and (ii) three (3)
Business Days after satisfaction of the conditions set forth in Articles 6 and
7, or at such other location or later date or time as mutually agreed upon by
the parties. The date of the Closing is referred to herein as the “Closing
Date.”

8.2           Deliveries by Parent and Seller.  At the Closing, provided all conditions
described in Article 7 have been satisfied, Seller shall execute and deliver to
Purchaser the following:

(a)           a
transfer of the Acquired Shares duly executed by the Seller in favor of the
Purchaser together with the relevant share certificate(s) in respect of such
Acquired Shares;

 9
 

(b)           a
copy of the minutes of a duly held board meeting of TDR at which there are duly
passed the resolutions set out and contained in board minutes of TDR in the
form attached as Exhibit A;

(c)           the
organizational documents, statutory books (including registers and minute
books), common seals (if any) and all books of account and other records of
TDR, complete and (where appropriate) written up to date;

(d)           the
certificate required by Section 6.1 hereof;

(e)           such
other deeds, bills of sale, endorsements, assignments and other good and
sufficient instruments of conveyance and assignment as the parties and their
respective counsel shall deem reasonably necessary or appropriate to vest in
Purchaser all right, title and interest in, to and under the Acquired Shares.

8.3           Deliveries by Purchaser.  At the Closing, (i) the certificate required
by Section 7.1 hereof; and (ii) such other instruments or documents as may be
reasonably requested by Parent or Seller to reflect the consummation of the
transactions contemplated hereunder.

8.4           Cost Reimbursement. 
Each party shall pay their own costs hereunder, except that a party
shall be responsible for the other party’s expenses, to a maximum of £100,000
if a breach by the other party is the principal reason for failure to close.

ARTICLE 9

MISCELLANEOUS

9.1           Survival
of Representations and Warranties.  The
representations and warranties contained in Articles 3 and 4 of this Agreement
shall survive until the Closing Date but shall expire immediately following
closing.  The covenants in Article 5 and
Section 8.4 shall survive closing.

9.2           Publicity. 
Parent, Seller and Purchaser agree that they will not make any press
releases or other announcements with respect to the transactions contemplated
hereby, except as required by applicable law, without the prior approval of the
other parties, which approval will not be unreasonably withheld.

9.3           Commercially Reasonable Efforts.  Each party hereto agrees to use its commercially
reasonable efforts to cause the conditions to its obligations hereunder to be
satisfied on or prior to the Closing Date and otherwise to consummate the
transactions contemplated by the Agreement.

9.4           Further Acts and Assurances.  Parent and Seller shall, at any time and from
time to time at and after the Closing, upon request of Purchaser and without
additional consideration, take any and all steps reasonably necessary to
transfer any assets of the Business that Seller has been unable to assign to TDR
prior to the Closing Date, and Parent and Seller will do, execute,

 10
 

acknowledge and deliver, or will cause to be done,
executed, acknowledged and delivered, all such further acts, deeds,
assignments, transfers, conveyances and assurances as may be reasonably
required for the more effective transferring and conveying the Acquired Shares
to Purchaser.

9.5           Notices.  Any notice or other document to be given
hereunder by any party hereto to any other party hereto shall be in writing and
delivered by courier or by facsimile transmission, receipt confirmed, or sent
by any express mail service, postage or fees prepaid,

If to Parent or Seller:

Tripos, Inc.

1699 South Hanley Road

St. Louis, Missouri 63144

Facsimile:  (314)
647-8108

Attention:  John P. McAlister

With a copy to:

Henry D. Kahn, Esq.

Hogan & Hartson L.L.P.

111 South Calvert Street

Baltimore, Maryland 21202

Facsimile:  (410) 539-6981

If to Purchaser:

Commonwealth Biotechnologies, Inc.

601 Biotech Drive

Richmond, Virginia 23235

Facsimile:  (804)
915-3831

Attention:  Paul D’Sylva

                  Richard
J. Freer

With a copy to:

Bradley
A. Haneberg, Esq.

Kaufman
& Canoles, P.C.

III
James Center, 12th Floor

1051
East Cary Street

Richmond,
Virginia 23219

Facsimile: 
(804) 771-5777

 11
 

or at such other address or number for a party as shall
be specified by like notice. Any notice which is delivered in the manner
provided herein shall be deemed to have been duly given to the party to whom it
is directed upon actual receipt by such party or its agent.

9.6           Construction.  This Agreement shall be governed by, and
construed and interpreted under, the laws of the state of Delaware, without
giving effect to principles of conflicts or choice of law.  No provision of this Agreement shall be
construed against or interpreted to the disadvantage of any party hereto by any
court or other governmental or judicial authority or by any board of
arbitrators by reason of such party or its counsel having or being deemed to
have structured or drafted such provision. All references in this Agreement to
Article(s), Section(s), Schedule(s) or Exhibit(s) shall refer to Article(s),
Section(s), Schedule(s) or Exhibit(s) of this Agreement.

9.7           Knowledge.  Whenever
used herein with respect to Seller or Parent, the term “knowledge” shall mean the actual knowledge of any of the
persons listed in Schedule 9.7 as of the date hereof.

9.8           Attachments.  Every Schedule and Exhibit referred to in
this Agreement is incorporated in this Agreement by this reference. The list
immediately following the table of contents hereto contains a list of such
Schedules and Exhibits.

9.9           Parties Bound by Agreement.  The terms, conditions and obligations of this
Agreement shall inure to the benefit of and be binding upon the parties hereto
and their respective successors and assigns. Except as hereinafter provided,
without the prior written consent of the other party, no party hereto may
assign such party’s rights, duties or obligations hereunder or any part thereof
to any other Person prior to Closing.  No
other party is intended to be a third party beneficiary of the covenants
between the parties set forth in this Agreement.

9.10         Counterparts. This Agreement may be
executed in one or more counterparts, each of which shall for all purposes be
deemed to be an original and all of which shall constitute the same instrument.

9.11         Headings.   The headings of the Articles and Sections of
this Agreement are inserted for convenience only and shall not be deemed to
constitute part of this Agreement or to affect the construction hereof.

9.12         Modification and Waiver.  Any of the terms or conditions of this
Agreement may be waived in writing at any time by the party which is entitled
to the benefits thereof. No waiver of any of the provisions of this Agreement
shall be deemed to or shall constitute a waiver of any other provision hereof.

9.13         Severability.  Any provision hereof which is prohibited or
unenforceable in any jurisdiction will, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in
any jurisdiction will not invalidate or render unenforceable such provision in
any other jurisdiction. To the extent permitted by law, the parties hereto
waive any provision of law which renders any such provision prohibited or
unenforceable in any respect.

 12
 

9.14         Access to Records.  For a period of six (6) years after the
Closing Date, Parent and its attorneys, accountants and representatives shall,
upon reasonable advance notice to Purchaser during normal business hours and
without disruption of the business of Purchaser, have reasonable access to all
books, accounts, records, documents and information relating to Parent, Seller,
TDR or the Business for any periods prior to the Closing Date in the possession
or custody of Purchaser (or Purchaser’s agents) for the purpose of examining
and making copies of all or any portion of such documents. In addition, Parent
and its attorneys and representatives shall, upon reasonable advance notice to
Purchaser, during normal business hours and without disruption to the business
of Purchaser, have reasonable access to employees of the Business with respect
to the defense of any on-going litigation or claim against Parent or Seller. A
representative of Purchaser may be present at all times during such access and
investigation by Parent or its attorneys, accountants and representatives.

9.15         Entire Agreement.  This Agreement and the Schedules and Exhibits
hereto, together with the documents and instruments delivered pursuant hereto,
constitute the entire agreement between the parties hereto pertaining to the
subject matter hereof and supersede all prior and contemporaneous agreements,
understandings, negotiations and discussions, whether written or oral, of the
parties hereto; provided, however, that this provision is not intended to
abrogate any other written agreement between the parties executed with or after
this Agreement or any written agreement pertaining to another subject matter.
No supplement, modification or waiver of the terms or conditions of this
Agreement shall be binding unless executed in writing by authorized
representatives of the parties hereto.

9.16         Certain Definitions.

(a)           “Business
Days” means a day other than a Saturday, Sunday, bank or public holiday in the
United Kingdom.

(b)           “Encumbrance”
means any lien, security interest, pledge, agreement, claim, charge or
encumbrance.

(c)           “Governmental
Entity” means any governmental or regulatory authority, domestic or foreign.

(d)           “Intellectual
Property” shall mean patents, rights to inventions, utility models, copyrights,
trade marks, service marks, trade, business and domain names, rights in trade
dress or get-up, rights in goodwill or to sue for passing off, unfair competition
rights, rights in designs, rights in computer software, database rights,
topography rights, moral rights, rights in confidential information (including
know-how and trade secrets) and any other intellectual property rights, in each
case whether registered or unregistered and including all applications for and
renewals or extensions of such rights, and all similar or equivalent rights or
forms of protection in any part of the world.

 13
 

(e)           “Person”
means any individual, corporation (including not-for-profit), general or
limited partnership, limited liability company, joint venture, estate, trust,
association, organization, Governmental Entity or other entity of any kind or
nature.

(f)            “UBCA”
means the Utah Revised Business Corporation Act, as amended.

 14

IN WITNESS WHEREOF, the parties hereto have caused this Amended and
Restated Agreement to be duly executed and delivered, all on and as of the date
first written above.

	
  

  	
   

  	
  TRIPOS, INC.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ John P. McAlister

  	
   

  
	
   

  	
   

  	
  Name: 

  	
  John P. McAlister

  	
   

  
	
   

  	
   

  	
  Title: 

  	
  President and CEO

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  TRIPOS UK HOLDINGS LIMITED

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ John P. McAlister

  	
   

  
	
   

  	
   

  	
  Name: 

  	
  John P. McAlister

  	
   

  
	
   

  	
   

  	
  Title: 

  	
  Director

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  COMMONWEALTH
  BIOTECHNOLOGIES, INC.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Paul D’Sylva

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Paul D’Sylva

  	
   

  
	
   

  	
   

  	
  Title: 

  	
  CEO

  	
   

  
													

 

EXHIBIT
A

Receivables
Subject to Section 5.5

	
  Selling

  Entity

  	
   

  	
  Customer

  	
   

  	
  Amount Due to TDR

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Tripos,
  Inc.

  	
   

  	
   

  	
  Schering-Plough

  	
   

  	
  $

  	
  901,129.60

  	
   

  
	
   

  	
   

  	
   

  	
  Abbott

  	
   

  	
  $

  	
  236,074.75

  	
   

  
	
   

  	
   

  	
   

  	
  Abbott

  	
   

  	
  $

  	
  56,737.50

  	
   

  
	
   

  	
   

  	
   

  	
  Angion
  Biomedia

  	
   

  	
  $

  	
  881.81

  	
   

  
	
   

  	
   

  	
   

  	
  KonKuk
  Univ

  	
   

  	
  $

  	
  545.54

  	
   

  
	
   

  	
   

  	
   

  	
  PTC
  Therapeutics

  	
   

  	
  $

  	
  740.76

  	
   

  
	
   

  	
   

  	
   

  	
  Schering-Plough

  	
   

  	
  $

  	
  1,909.64

  	
   

  
	
   

  	
   

  	
   

  	
  Duke
  Univ

  	
   

  	
  $

  	
  809.80

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Tripos
  GmbH

  	
   

  	
   

  	
  Actelion

  	
   

  	
  €

  	
  54,074.85

  	
   

  
	
   

  	
   

  	
   

  	
  Actelion

  	
   

  	
  €

  	
  124.00

  	
   

  
	
   

  	
   

  	
   

  	
  Bayer
  Crop

  	
   

  	
  €

  	
  300.40

  	
   

  
	
   

  	
   

  	
   

  	
  Bayer
  Schering

  	
   

  	
  €

  	
  308.00

  	
   

  
	
   

  	
   

  	
   

  	
  EMBL

  	
   

  	
  €

  	
  509.76

  	
   

  
	
   

  	
   

  	
   

  	
  EMBL

  	
   

  	
  €

  	
  223.91

  	
   

  
	
   

  	
   

  	
   

  	
  EMBL

  	
   

  	
  €

  	
  790.24

  	
   

  
	
   

  	
   

  	
   

  	
  Epix
  Pharma

  	
   

  	
  €

  	
  306.81

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Tripos
  UK Ltd.

  	
   

  	
   

  	
  CeNes

  	
   

  	
  £

  	
  22,652.50

  	
   

  
	
   

  	
   

  	
   

  	
  CeNes

  	
   

  	
  £

  	
  5,465.50

  	
   

  
	
   

  	
   

  	
   

  	
  Lectus

  	
   

  	
  £

  	
  8,061.12

  	
   

  
	
   

  	
   

  	
   

  	
  CeniX

  	
   

  	
  £

  	
  11,354.53

  	
   

  
	
   

  	
   

  	
   

  	
  CeNes

  	
   

  	
  £

  	
  8,198.25

  	
   

  
	
   

  	
   

  	
   

  	
  CeniX

  	
   

  	
  £

  	
  11,564.93

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Tripos
  Discovery

  	
   

  	
   

  	
  GeminX

  	
   

  	
  C$44,789.23

  	
   

  
	
  (Canada)

  	
   

  	
   

  	
  GeminX

  	
   

  	
  C$43,406.72

  	
   

  
	
   

  	
   

  	
   

  	
  GeminX

  	
   

  	
  C$401.03

  	
   

  
	
   

  	
   

  	
   

  	
  Strida

  	
   

  	
  C$13,934.44

  	
   

  

 

 2
 

EXHIBIT
B

Intercompany
Advances to Remain Outstanding

1.             The principal
amount of One Hundred Thirty Five Thousand Five Hundred Ninety Nine Pounds and
Seventy Nine Pence (£135,599.79), plus all accrued interest thereon, payable
under the Promissory Note dated May 30, 2007, which shall become due and
payable upon Closing.

2.             The principal
amount of One Hundred Thousand Pounds (£100,000.00), plus all accrued interest
on the unpaid principal balance outstanding from time to time, payable under
the Promissory Note dated May 24, 2007, which is due and payable not later than
June 31, 2007.

 3Exhibit
10.1

INDEMNITY AGREEMENT

This
Indemnity Agreement, effective as of _______, _____ is made by and between ACA
Capital Holdings, Inc., a Delaware corporation with executive offices located
at 140 Broadway, New York, NY (the “Company”), and ___________, a director of
the Company residing at _________________ (the “Indemnitee”).

RECITALS

A.             The
Board of Directors of the Company (the “Board”) has determined that it is
desirable and in the best interest of the Company to appoint an additional
independent director for membership on the Board;

B.              The
Company is aware that competent and experienced persons are increasingly
reluctant to serve as directors of corporations unless they are protected by
comprehensive liability insurance or indemnification, due to increased exposure
to litigation costs and risks resulting from their service to such
corporations, and due to the fact that the exposure frequently bears no
reasonable relationship to the compensation of such directors;

C.              The
statutes and judicial decisions regarding the duties of directors are often
difficult to apply, ambiguous, or conflicting, and therefore fail to provide
such directors with adequate, reliable knowledge of legal risks to which they
are exposed or information regarding the proper course of action to take;

D.              Plaintiffs
often seek damages in such large amounts and the costs of litigation may be so
substantial (whether or not the case is meritorious) that the defense and/or
settlement of such litigation is often beyond the personal resources of the
directors;

E.              Based
upon their experience as business managers, the Board has concluded that, to
retain and attract talented and experienced individuals to serve as independent
directors of the Company and its subsidiaries, it is necessary and appropriate
for the Company to contractually indemnify such directors, and to assume for
itself maximum liability for expenses and damages in connection with claims
against such directors in connection with their service to the Company and its
subsidiaries;

F.              Section
145 of the General Corporation Law of the State of Delaware, under which the
Company is organized (“Section 145”), empowers the Company to indemnify by
agreement its officers, directors, employees, and agents, and persons who
serve, at the request of the Company, as directors, officers, employees, or
agents of other corporations or enterprises, and expressly provides that the
indemnification provided by Section 145 is not exclusive;

G.              The
Company desires and has requested the Indemnitee to serve or continue to serve
as an independent director of the Company and/or the subsidiaries of the
Company free from undue concern for claims for damages arising out of or
related to such services to the Company and/or a subsidiary of the Company; and

H.              The
Indemnitee is willing to serve, or to continue to serve, the Company and/or the
subsidiaries of the Company, provided that he or she is furnished the indemnity
provided for herein.

AGREEMENT

NOW,
THEREFORE, the parties hereto, intending to be legally bound, hereby agree as
follows:

1.           Definitions.

(a)          Agent.  For the purposes of this Agreement, “agent”
of the Company means any person who is or was a director, officer, employee, or
other agent of the Company or a subsidiary of the Company; or is or was serving
at the request of, for the convenience of or to represent the interest of the
Company or a subsidiary of the Company as a director, officer, employee, or
agent of another foreign or domestic corporation, partnership, joint venture,
trust, or other enterprise; or was a director, officer, employee, or agent of a
foreign or domestic corporation which was a predecessor corporation of the
Company or a subsidiary of the Company, or was a director, officer, employee,
or agent of another enterprise at the request of, for the convenience of or to
represent the interests of such predecessor corporation.

(b)         Expenses.  For purposes of this Agreement, “expenses”
includes all direct and indirect costs of any type or nature whatsoever
(including, without limitation, all attorneys’ fees and related disbursements,
and other out-of-pocket costs such as retainers, court costs, expert fees,
travel expenses and telephone charges) actually and reasonably incurred by the
Indemnitee as a party or as a participant in connection with either the
investigation, defense, or appeal of a proceeding or establishing or enforcing
a right to indemnification under this Agreement, Section 145, or otherwise;
provided, however, that expenses shall not include any judgments, fines, ERISA
excise taxes or penalties or amounts paid in settlement of a proceeding.

(c)          Proceeding.  For the purposes of this Agreement, “proceeding”
means any threatened, pending, or completed action, suit, claim, inquiry or
other proceeding, formal or informal, including arbitration, mediation, other
alternative dispute resolution mechanism, or hearing, whether civil, criminal,
administrative, investigative, or any other type whatsoever.

(d)         Subsidiary.  For purposes of this Agreement, “subsidiary”
means any corporation or other form of business entity of which more than 50%
of the outstanding voting securities is owned directly or indirectly by the
Company, by the Company and one or more other subsidiaries, or by one or more
other subsidiaries.

2.           Agreement
to Serve.  The Indemnitee agrees to
serve and/or continue to serve as an agent of the Company, in the capacity the
Indemnitee currently serves as an agent of the Company, so long as he or she is
duly appointed or elected and qualified in accordance with the applicable provisions
of the Bylaws of the Company or any subsidiary of the Company or until such
time as he or she tenders his resignation in writing or he or she is removed
from such position.

3.           Liability
Insurance.  To the extent the Company
or any of its subsidiaries maintains an insurance policy or policies providing
liability insurance for agents of the Company and its subsidiaries (“D&O
Insurance”), the Indemnitee shall be covered by such policy or policies in
accordance with its or their terms to the maximum extent of the coverage
available.

4.           Mandatory
Indemnification.  The Company shall
indemnify the Indemnitee:

(a)          Third
Party Actions.  If the Indemnitee is
a person who was or is a party or other participant or is threatened to be made
a party or other participant to any proceeding (other than an action by or in
the right of the Company) by reason of the fact that he or she is or was an
agent of the Company, 

 2
 

 

or
by reason of anything done or not done by him or her in any such capacity,
against any and all expenses and liabilities of any type whatsoever (including,
but not limited to, judgments, fines, ERISA excise taxes or penalties, and
amounts paid in settlement) actually and reasonably incurred by him or her in
connection with the investigation, defense, settlement or appeal of such
proceeding to the fullest extent authorized or permitted by law, the
Certificate of Incorporation of the Company or the Bylaws of the Company;
provided that he or she acted in good faith and in a manner he or she
reasonably believed to be in or not opposed to the best interests of the
Company, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his or her conduct was unlawful; and

(b)         Actions
By or In the Right of the Company. 
If the Indemnitee is a person who was or is a party or other participant
or is threatened to be made a party or other participant to any proceeding by
or in the right of the Company to procure a judgment in its favor by reason of
the fact that he or she is or was an agent of the Company, or by reason of
anything done or not done by him or her in any such capacity, against any
amounts paid in settlement of any such proceeding, to the extent permitted by
law, and all expenses actually and reasonably incurred by him or her in
connection with the investigation, defense, settlement, or appeal of such
proceeding if he or she acted in good faith and in a manner he or she
reasonably believed to be in or not opposed to the best interests of the
Company; except that no indemnification under this subsection shall be made in
respect of any claim, issue, or matter as to which such person shall have been
finally adjudged to be liable to the Company unless and only to the extent that
the Court of Chancery or the court in which such proceeding was brought shall
determine upon application that, despite the adjudication of liability but in
view of all the circumstances of the case, such person is fairly and reasonably
entitled to indemnity for such amounts which the Court of Chancery or such
other court shall deem proper; and

(c)          The
termination of any proceeding by judgment, order, settlement, conviction, or
upon a plea of nolo contendre or its equivalent, shall not, of itself, create a
presumption that the Indemnitee did not act in good faith and in a manner he or
she reasonably believed to be in or not opposed to the best interests of the
Company, and, with respect to any criminal action or proceeding, had reasonable
cause to believe that his or her conduct was unlawful; and

(d)         Indemnification
for Expenses Incurred as a Witness. 
To the extent that Indemnitee is, by reason of the fact that he or she
is or was an agent of the Company, a witness in any proceeding to which
Indemnitee is not a party, the Company shall indemnify Indemnitee against all
expenses actually and reasonably incurred by Indemnitee in connection
therewith; and

(e)          Exception
for Amounts Covered by Insurance. 
Notwithstanding the foregoing, the Company shall not be obligated to
indemnify the Indemnitee for expenses or liabilities of any type whatsoever
(including, but not limited to, judgments, fees, ERISA excise taxes or
penalties, and amounts paid in settlement) that have been paid directly to
Indemnitee under D&O Insurance.

5.           Partial
Indemnification.  If the Indemnitee
is entitled under any provision of this Agreement to indemnification by the
Company for some or a portion of any expenses or liabilities of any type
whatsoever (including, but not limited to, judgments, fines, ERISA excise taxes
or penalties, and amounts paid in settlement) incurred by him or her in the
investigation, defense, settlement, or appeal of a proceeding but not entitled,
however, to indemnification for all of the total amount thereof, the Company
shall nevertheless indemnify the Indemnitee for such amount except as to the
portion thereof to which the Indemnitee is not entitled.

6.           Mandatory
Advancement of Expenses.  Subject to
Section 9 below and subject to receipt by the Company of a statement that
reasonably evidences the expenses incurred, the Company shall advance all
expenses actually and reasonably incurred by the Indemnitee in connection with
the 

 3
 

 

investigation,
defense, settlement or appeal of any proceeding to which the Indemnitee is a
party or participant or is threatened to be made a party or participant by
reason of the fact that the Indemnitee is or was an agent of the Company or by
reason of anything done or not done by him or her in any such capacity.
Indemnitee hereby undertakes to repay such amounts advanced only if, and to the
extent that, it shall ultimately be determined by final judicial decision from
which there is no further right to appeal that the Indemnitee is not entitled
to be indemnified by the Company as authorized hereby. The advances to be made
hereunder shall be paid by the Company to the Indemnitee within twenty (20)
days following delivery of a written request therefor by the Indemnitee to the
Company.

7.           Notice
and Other Indemnification Procedures.

(a)          Promptly
after receipt by the Indemnitee of notice of the commencement of or the threat
of commencement of any proceeding or his or her potential involvement as a
participant (be it as a party or otherwise), the Indemnitee shall, if the
Indemnitee believes that indemnification with respect thereto may be sought from
the Company under this Agreement, notify the Company in writing of the
commencement or threat of commencement thereof.

(b)         If,
at the time of the receipt of a notice of the commencement of a proceeding
pursuant to Section 7(a) hereof, the Company has D&O Insurance in effect,
the Company shall give notice of the commencement of such proceeding to the
insurers in accordance with the procedures set forth in the respective
policies. The Company shall thereafter take all necessary action to cause such
insurers to pay, on behalf of the Indemnitee, all amounts payable as a result
of such proceeding in accordance with the terms of such policies.

(c)          In
the event the Company shall be obligated to advance the expenses for any
proceeding against the Indemnitee, the Company, if appropriate, shall be
entitled to assume the defense of such proceeding, with counsel approved by the
Indemnitee, upon the delivery to the Indemnitee of written notice of its
election so to do. After delivery of such notice, approval of such counsel by
the Indemnitee and the retention of such counsel by the Company, the Company
will not be liable to the Indemnitee under this Agreement for any fees of
counsel subsequently incurred by the Indemnitee with respect to the same
proceeding, provided that (i) the Indemnitee shall have the right to employ his
or her counsel in any such proceeding at the Indemnitee’s expense; and (ii) if
(A) the employment of counsel by the Indemnitee has been previously authorized
by the Company, (B) the Indemnitee shall have reasonably concluded that there
may be a conflict of interest between the Company and the Indemnitee in the
conduct of any such defense or (C) the Company shall not, in fact, have
employed counsel to assume the defense of such proceeding, the fees and expenses
of the Indemnitee’s counsel shall be at the expense of the Company.

8.           Determination
of Right to Indemnification.

(a)          To
the extent the Indemnitee has been successful on the merits or otherwise in
defense of any proceeding referred to in Section 4(a) or 4(b) of this Agreement
or in the defense of any claim, issue or matter described therein, the Company
shall indemnify the Indemnitee against expenses actually and reasonably
incurred by him or her in connection therewith to the extent permitted by law.

(b)         Upon
each submission of a written notice by Indemnitee for indemnification pursuant
to Section 7(a) above, a determination with respect to Indemnitee’s entitlement
thereto because he or she has met all the applicable standards set forth in
this Agreement shall be made in accordance with this Section 8.

(c)          The
Indemnitee shall be entitled to select the decision maker or decision making
body who will determine, on behalf of the Company, the Indemnitee’s entitlement
to indemnification from 

 4
 

 

among
the following:

(1)               All of the members of the Board
of Directors who are not parties to or participants in the proceeding for which
indemnification is being sought, even though less than a quorum, or a committee
of such directors designated by majority vote of such directors, even though
less than a quorum;

(2)               The stockholders of the Company;
or

(3)               Independent legal counsel
selected by the Board, which counsel shall make such determination in a written
opinion.

(d)         As
soon as practicable, and in no event later than 30 days after written notice of
the Indemnitee’s choice of decision maker pursuant to Section 8(c) above, the
Company shall, at its own expense, submit to the selected decision maker its
claim that the Indemnitee is not entitled to indemnification; and the Company
shall act in the utmost good faith to assure the Indemnitee a complete
opportunity to defend against such claim.

(e)          Notwithstanding
a determination by any decision maker listed in Section 8(c) hereof that the
Indemnitee is not entitled to indemnification with respect to a specific
proceeding, the Indemnitee shall have the right to apply to the Court of
Chancery of the State of Delaware, the court in which the Proceeding is or was
pending, or any other court of competent jurisdiction, for the purpose of
enforcing the Indemnitee’s right to indemnification pursuant to the Agreement.

(f)          In
any suit brought by Indemnitee seeking to enforce a right to indemnification
hereunder (but not a suit brought by Indemnitee seeking to enforce a right to an
advancement of expenses hereunder), it shall be a defense that Indemnitee has
not met any applicable standard for indemnification under applicable law. With
respect to any suit brought by Indemnitee seeking to enforce a right to
indemnification or right to advancement of expenses hereunder or any suit
brought by the Company to recover an advancement of expenses (whether pursuant
to the terms of an undertaking or otherwise), neither (i) the failure of
the Company to have made a determination prior to commencement of such suit
that indemnification of such person is proper in the circumstances because such
person has met the applicable standards of conduct under applicable law, nor
(ii) an actual determination by the Company that such person has not met
such applicable standards of conduct, shall create a presumption that such
person has not met the applicable standards of conduct or, in a case brought by
such person seeking to enforce a right to indemnification, be a defense to such
suit.

(g)         In
any suit brought by Indemnitee seeking to enforce a right to indemnification or
to an advancement of expenses hereunder, or by the Company to recover an
advancement of expenses (whether pursuant to the terms of an undertaking or
otherwise), the burden shall be on the Company to prove that the Indemnitee is
not entitled to be indemnified, or to such an advancement of expenses, under
this Agreement or otherwise.

(h)         The
Company shall indemnify the Indemnitee against all expenses incurred by the
Indemnitee in connection with any proceeding under this Section 8 involving the
Indemnitee and against all expenses incurred by the Indemnitee in connection
with any other proceeding between the Company and the Indemnitee involving the
interpretation or enforcement of the rights of the Indemnitee under this
Agreement so long as a court of competent jurisdiction finds that Indemnitee in
any such proceeding was entitled to indemnification or advancement of expenses,
in whole or in part.

 5
 

 

9.           Exceptions.  Any other provision herein to the contrary
notwithstanding, the Company shall not be obligated pursuant to the terms of
this Agreement:

(a)          Claims
Initiated by Indemnitee.  To
indemnify or advance expenses (including attorneys’ fees) to the Indemnitee
with respect to proceedings or claims initiated or brought voluntarily by the
Indemnitee against the Company or in defending any counterclaim, cross-claim,
affirmative defense or like claim of the Company), except with respect to
proceedings brought to establish or enforce a right to indemnification or
advancement of expenses under this Agreement or any other statute or law or
otherwise as required under Section 145, but such indemnification or
advancement of expenses may be provided by the Company in specific cases if the
Board of Directors finds it to be appropriate; or

(b)         Lack
of Good Faith.  To indemnify the
Indemnitee for any expenses incurred by the Indemnitee with respect to any
proceeding instituted by the Indemnitee to enforce or interpret this Agreement,
if a court of competent jurisdiction determines that each of the material
assertions made by the Indemnitee in such proceeding was not made in good faith
or was frivolous; or

(c)          Unauthorized
Settlements.  To indemnify the
Indemnitee under this Agreement for any amounts paid in settlement of a
proceeding unless the Company consents to such settlement; or

(d)         Claims
by the Company for Willful Misconduct. 
To indemnify or advance expenses to the Indemnitee under this Agreement
for any expenses incurred by the Indemnitee with respect to any proceeding or
claim brought by the Company against the Indemnitee for willful misconduct,
unless a court of competent jurisdiction determines that each of such claims
was not made in good faith or was frivolous; or

(e)          Section
16(b).  To indemnify Indemnitee for
expenses and the payment of profits arising from the purchase and sale by
Indemnitee of securities in violation of Section 16(b) of the Securities
Exchange Act of 1934, as amended, to the extent applicable to the Company, or
any similar successor statute; or

(f)          Willful
Misconduct.  To indemnify the
Indemnitee (x) on account of the Indemnitee’s conduct which is finally adjudged
to have been knowingly fraudulent or deliberately dishonest, or to constitute
willful misconduct or (y) if it is finally adjudged that Indemnitee did not act
in good faith or in a manner he or she reasonably believed to be in or not
opposed to the best interests of the Company; or

(g)         Unlawful
Indemnification.  To indemnify the
Indemnitee if a final decision by a court having jurisdiction in the matter
shall determine that such indemnification is not lawful.

10.         Right
to Bring Suit.  If (a) a claim under
Section 4(a) or 4(b) hereof with respect to any right to indemnification is not
paid in full by the Company within sixty days after a written demand has been
received by the Company or (b) a claim under Section 6 hereof with respect to
any right to the advancement of expenses is not paid in full by the Company
within twenty days after a written demand has been received by the Company,
then Indemnitee may at any time thereafter bring suit against the Company to
recover the unpaid amount of the claim.

11.         Subrogation.  Upon a payment to Indemnitee under this
Agreement, the Company shall be subrogated to the extent of such payment to all
of the rights of the Indemnitee to recover against any person for such
liability, and Indemnitee shall execute all documents and instruments
reasonably required and shall take such other actions as may be reasonably
necessary to secure such rights, including the execution of such documents as
may be necessary for the Company to bring suit to enforce such rights.

 6
 

 

12.         Nonexclusivity.  The provisions for indemnification and
advancement of expenses set forth in this Agreement shall not be deemed exclusive
of any other rights which the Indemnitee may have under any provision of law,
the Company’s Certificate of Incorporation or Bylaws, the vote of the Company’s
stockholders or disinterested directors, other agreements, or otherwise, both
as to actions in his or her official capacity and to actions in another
capacity while occupying his or her position as an agent of the Company, and
the Indemnitee’s rights hereunder shall continue after the Indemnitee has
ceased acting as an agent of the Company and shall inure to the benefit of the
heirs, executors and administrators of the Indemnitee.

13.         Interpretation
of Agreement.  It is understood that
the parties hereto intend this Agreement to be interpreted and enforced so as
to provide indemnification to the Indemnitee to the fullest extent now or
hereafter permitted by law.

14.         Severability.  If any provision or provisions of this
Agreement shall be held to be invalid, illegal, or unenforceable for any reason
whatsoever, (i) the validity, legality, and enforceability of the remaining
provisions of the Agreement (including, without limitation, all portions of any
paragraphs of this Agreement containing any such provision held to be invalid,
illegal, or unenforceable, that are not themselves invalid, illegal, or
unenforceable) shall not in any way be affected or impaired thereby, and (ii)
to the fullest extent possible, the provisions of this Agreement (including,
without limitation, all portions of any paragraphs of this Agreement containing
any such provision held to be invalid, illegal, or unenforceable, that are not
themselves invalid, illegal, or unenforceable) shall be construed so as to give
effect to the intent manifested by the provision held invalid, illegal or
unenforceable and to give effect to Section 13 hereof.

15.         Modification
and Waiver.  No supplement,
modification, or amendment of this Agreement shall be binding unless executed
in writing by both of the parties hereto. No waiver of any of the provisions of
this Agreement shall be deemed or shall constitute a waiver of any other
provision hereof (whether or not similar) nor shall such waiver constitute a
continuing waiver.

16.         Successors
and Assigns.  The terms of this
Agreement shall bind, and shall inure to the benefit of, the successors, heirs,
executors, and administrators and assigns of the parties hereto.

17.         Notice.  All notices, requests, demands, and other
communications under this Agreement shall be in writing and shall be deemed
duly given (i) if delivered by hand and receipted for by the party addressee,
(ii) if mailed by certified or registered mail with postage prepaid, on the
third business day after the mailing date, (iii) sent by a recognized overnight
courier, on the next business day after the date on which it was so sent, or
(iv) sent by facsimile, the successful transmission and receipt of which is
confirmed in a written report. Addresses for notice to either party are as
shown on the signature page of this Agreement, or as subsequently modified by
written notice.

18.         Governing
Law.  This Agreement shall be
governed exclusively by and construed according to the laws of the State of
Delaware.

19.         Consent
to Jurisdiction.  To the fullest
extent permitted by law, the Company and the Indemnitee each hereby irrevocably
consent to the jurisdiction of the Court of Chancery of the State of Delaware
for all purposes in connection with any action or proceeding that arises out of
or relates to this Agreement.

20.         Counterparts.  This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one instrument.

 7
 

 

The parties hereto have entered into this Indemnity Agreement effective
as of the date first above written.

	
  

  	
  ACA CAPITAL HOLDINGS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
  Address for notice purposes:

  
	
   

  	
   

  	
  ACA Capital Holdings, Inc.

  
	
   

  	
   

  	
  140 Broadway, 47th Floor

  
	
   

  	
   

  	
  New York, NY 10005

  
	
   

  	
   

  	
  Attention: General Counsel

  
	
   

  	
   

  	
  Facsimile: 212-375-2302

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  INDEMNITEE:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Address for notice purposes:

  
	
   

  	
   

  	
  [                              ]

  
	
   

  	
   

  	
  [                              ]

  
	
   

  	
   

  	
  [                              ]

  
						

 

 8

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