CONTRIBUTION AGREEMENT

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Exhibit 10.12

CONTRIBUTION AGREEMENT

Contribution Agreement, dated as of June 30, 2000, between GP Strategies

Corporation, a Delaware corporation ("GP"), and Hydro Med Sciences, Inc., a

Delaware corporation and wholly-owned subsidiary of GP ("HMS").

WHEREAS, GP has heretofore been conducting the Business (as hereinafter

defined), and desires to contribute the Business to HMS; and

WHEREAS, the parties hereto desire to enter into this Agreement to set

forth terms of such contribution;

NOW, THEREFORE, the parties hereto agree as follows:

I. The Contribution

Section 1.1 Contribution. Upon the terms and subject to the conditions of

this Agreement, on the date hereof, GP is hereby contributing, assigning,

transferring, and conveying to HMS the Assets (as hereinafter defined) of GP's

drug delivery business (the "Business").

Section 1.2 Assets. The term "Assets" means:

(a) all of GP's right, title, and interest in and to the patents,

trademarks, copyrights, software, and other intellectual property used in

the Business, and any registrations and or applications therefor, in each

case together with the goodwill of the business symbolized thereby;

(b) all of GP's rights under all contracts, agreements, instruments,

leases, and licenses (collectively, "Contracts") relating to the Business

(the "Assigned Contracts");

(c) the machinery, equipment, furnishings, change parts, and other

tangible property owned by GP and used in the Business;

(d) the inventories of finished goods and raw materials of GP related

to the Business; and

(e) all records relating solely to the Business.

Section 1.3 Assumption of Liabilities. In consideration for the transfer of

the Assets, HMS hereby assumes from GP all liabilities and obligations of GP

relating to or arising from the operation of the Business or the Assets (the

"Assumed Liabilities"), including, without limitation:

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(a) all obligations with respect to employees of the Business; and

(b) all of the obligations of GP to be performed under the Assigned

Contracts.

II. Covenants

Section 2.1 Delivery of Assets

(a) GP shall, as and when reasonably requested by HMS, deliver to HMS

such deeds in form for recording, bills of sale, assignments, evidences of

consent, and other instruments or documents as may be necessary or

desirable to evidence or perfect the contribution, assignment, transfer,

and conveyance of the Assets.

(b) HMS shall, as and when reasonably requested by GP, deliver to GP

such instruments as may be necessary or desirable to evidence or perfect

the assumption by HMS of the Assumed Liabilities.

(c) With respect to any Assets transferred hereunder that cannot be

physically delivered to HMS because they are in the possession of third

parties, or otherwise, GP shall give irrevocable instructions to the party

in possession thereof, if such be the case, that all right, title, and

interest therein have been vested in HMS and that the same are to be held

for HMS's exclusive use and benefit.

(d) To the extent that GP's rights under any Assigned Contract or

other Asset to be conveyed to HMS hereunder may not be assigned without the

consent of another person, and such consent has not been obtained prior to

the date hereof or if any attempted assignment would be ineffective or

would impair HMS's rights with respect to the Asset in question so that HMS

would not acquire the benefit of all such rights, GP shall act after the

date hereof as HMS's agent to obtain for HMS the benefits thereunder, and

HMS shall perform all of GP's obligations thereunder, in each case to the

maximum extent permitted by law, and the parties shall cooperate, to the

maximum extent permitted by law, in any other reasonable arrangement

designed to provide such benefits to GP and HMS. GP shall cooperate with

HMS in obtaining the transfer of any permits or licenses necessary for

HMS's use of the Assets. Any assignment between GP and HMS executed

pursuant to this Agreement shall not constitute an agreement to assign any

Contract or other Asset if an attempted assignment would constitute a

breach thereof or be unlawful.

Section 2.2 Bulk Sales. The parties hereby waive compliance with any bulk

sales or similar laws which may be applicable to the transactions contemplated

hereby.

III. Indemnities

Section 3.1 Indemnity by GP. GP agrees to indemnify, defend, and hold

harmless HMS from and against any and all liabilities, damages, claims, costs,

expenses (including, without limitation, reasonable attorneys' fees), judgments,

interest and penalties (collectively, "Losses") incurred as a result of, arising

out of or in respect of: