<PAGE>
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.
<PAGE>
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
<PAGE>
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
<PAGE>
\ 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, then the
