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Exhibit 10.5
TERMINATION AGREEMENT,
LICENCE BACK AND OPTION
DATED: 21st DECEMBER 2001
BETWEEN:
(1) HYDRO MED SCIENCES, INC. ("HMS"), a subsidiary of GP
Strategies Corporation
("GP"), a Delaware corporation with principal offices at 9 West
Street,
57th Street. Suite 4170, New York, NY 10019, USA; and
(2) Shire US INC., a New Jersey Corporation with principal
offices at 7900
Tanners Gate Drive, Florence, Kentucky 41042, USA ("Shire").
RECITALS:
A. Hydro Med Sciences, a division of GP (the "HMS Division"),
and Shire
entered into a Licence Agreement dated 24 March 1998 whereby
Shire agreed
to undertake the development of a pharmaceutical product
containing
Histrelin as an active pharmaceutical ingredient for the
treatment of human
prostatic carcinoma and was granted an exclusive licence to
market such
product in certain territories (the "Licence Agreement").
B. The HMS Division and Shire entered into a manufacturing
supply agreement
dated 24 March 1998 in which the HMS Division agreed to supply
Shire with
research and commercial quantities of such product (as amended,
the
"Manufacturing Agreement").
C. Shire and its Affiliates have undertaken certain development
activities
pursuant to the Licence Agreement and are in possession of
valuable
development data and know-how in relation to such product.
D. The HMS Division has assigned the Licence Agreement and the
Manufacturing
Agreement to HMS.
E. HMS has agreed to use its reasonable endeavors to either (i)
seek a third
party licensee to continue such development and to commercialise
such
product or (ii) develop and commercialise such product itself,
and Shire
and HMS have agreed to terminate the Licence Agreement and
the
Manufacturing Agreement and Shire has agreed to licence such
development
data to HMS for this purpose on the terms set out in this
Agreement.
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OPERATIVE PROVISIONS
1. INTERPRETATION
1.1 Terms used in this Agreement shall (unless the context
otherwise
requires or unless specifically defined herein) have the same
meanings
as set out in the Licence Agreement.
1.2 In this Agreement the following words shall have the
following
meanings unless the context otherwise requires:
"Commercial Sale" means a sale to a third party (other than
an
Affiliate or a Sub-Licensee) for commercial use
of any Licensed Product in any country within the
Territory to include for the avoidance of doubt a
sale by a co-marketing partner or through a
contract sales force on reasonably standard
terms;
"Development Data" means all data, know-how and other
information
relating to the Licensed Product generated in
connection with the Development Program in the
possession or control of Shire as at the date of
this Agreement:
"Development Program" means the development program for the
Licensed
Product previously agreed by the Parties;
"IND" means the Investigational New Drug authorisation
(No 40,772) given for the Licensed Product by the
Food and Drug Administration of the United States
of America;
"Net Sales" means "Net Sales" as defined in the License
Agreement with the additional deduction of the PC
Royalty and PROVIDED THAT sales by co-marketing
partners or through a contract sales force on
reasonably standard terms shall additionally
constitute Net Sales for the purposes of this
definition;
"PC Royalty" means any royalty payment properly paid by HMS
to
the Population Council in respect of a sale of a
Licensed Product pursuant to the Termination of
Agreement
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dated September 12, 1990, dated September 26 and
October 1,1997, as amended, entered into by GP
and the Population Council;
"Option" means the option granted by HMS to Shire to
market and distribute the Licensed Product in
each country of the Territory outside of the
United States of America as more particularly set
out in Clause 6 of this Agreement;
"Sub-Licensee" any person, firm or company (excluding
Affiliates, Shire pursuant to the exercise of the
Option and third parties who co-market the
Licensed Product in the Territory on reasonably
standard terms) licensed or appointed by HMS to
supply the Licensed Product in any country within
the Territory;
"Sub-Licence Agreement" means an agreement with a Sub-Licensee
relating
to the development, use or sale of Licensed
Products;
"Royalty Income" all royalty or other Income received by HMS or
an
Affiliate from any Sub-Licensee relating to the
sale or use of any part of the Development Data,
the Hydro Med Intellectual Property Rights and/or
the Licensed Product less the deduction of any PC
Royalty paid in respect of any sales of Licensed
Product by any such Sub-Licensee;
"Transfer Date" shall mean 23 April 2001.
1.3 Except where the context otherwise requires, words denoting
the
singular include the plural and vice versa.
1.4 Unless otherwise stated, a reference to a Clause is a
reference to a
Clause of this Agreement.
1.5 Clause headings are for ease of reference only and do not
affect the
interpretation of this Agreement.
1.6 This Agreement includes the Recitals.
2. LICENCE GRANT
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\ 2.1 Subject to the terms of the Option, Shire hereby grants to
HMS with
deemed effect from the Transfer Date an exclusive licence in
the
Territory (with the right to grant sub-licences) in the Field of
Use
to the Development Data for the development, manufacture, use,
supply
and sale of the Licensed Product.
2.2 HMS shall use its reasonable endeavours to secure a
Sub-Licensee or
Sub-Licensees for the purposes of developing and commercialising
the
Licensed Product: provided that, in the United States of
America. HMS
may market the Licensed Product itself including by co-marketing
or
contract force arrangements. Any Sub-Licence Agreement shall be
with a
reputable pharmaceutical company on an arms-length basis and
on
commercial terms as favourable to HMS as is reasonably
achievable in
the circumstances. HMS shall notify Shire in advance of any
Sub-Licence Agreement being entered into and shall provide Shire
with
a summary of relevant terms of such Sub-Licence Agreement,
including
royalties, up front and milestone payments.
2.3 The term of the licence granted in Clause 2.1 shall continue
for so
long as royalties are payable pursuant to Clause 4; thereafter
HMS
shall have a fully paid up licence to the Development Data in
the
Territory in the Field of Use.
2.4 In the event that HMS concludes a Sub-Licence Agreement
outside of the
United States of America, th
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