Document:

Exhibit 10.5

          LIMITED GUARANTY AGREEMENT

          THIS  LIMITED  GUARANTY  AGREEMENT  (GUARANTY)  is given as of March
          _____,  2000, by GP  STRATEGIES  CORPORATION,  a Delaware  corporation
          (GUARANTOR),  for the benefit of NATIONAL BANK OF CANADA, a Canadian
          chartered  bank  (LENDER),  with respect to the  obligations  of GSE
          SYSTEMS, INC., a Delaware corporation,  GSE PROCESS SOLUTIONS, INC., a
          Delaware  corporation,   and  GSE  POWER  SYSTEMS,  INC.,  a  Delaware
          corporation   (individually,   a  BORROWER  and  collectively,   the
          BORROWERS), to the LENDER.

                                    RECITALS

          The BORROWERS have requested  certain credit  accommodations  from the
          LENDER as set forth in the Loan and  Security  Agreement  of even date
          herewith by and between the  BORROWERS and the LENDER (as the same may
          be amended, modified,  extended,  renewed,  restated,  supplemented or
          replaced from time to time LOAN AGREEMENT). The LENDER has agreed to
          provide the requested credit accommodations to the BORROWERS, but only
          if, inter alia, the GUARANTOR provides to the LENDER the guaranties of
          payment and performance  set forth in this GUARANTY.  The GUARANTOR is
          willing to provide this  GUARANTY to the LENDER in order to induce the
          LENDER  to  provide  the  requested  credit   accommodations   to  the
          BORROWERS.

          All capitalized  terms used in this GUARANTY without  definition shall
          have the respective meanings given such terms in the LOAN AGREEMENT.

          NOW, THEREFORE,  in consideration of these premises and other good and
          valuable  consideration,  the  receipt  and  sufficiency  of which are
          hereby  acknowledged,  the  GUARANTOR  hereby agrees to provide to the
          LENDER the following guaranties and indemnifications.

          Section 1. Guaranty. The GUARANTOR guarantees:  (a) the payment of any
          and all sums now or  hereafter  due and  owing  to the  LENDER  by the
          BORROWERS (or any of them) arising out of, related to, as a result of,
          or in  connection  with the LOAN,  the  LETTERS OF CREDIT,  the CREDIT
          FACILITY, or any other existing or future indebtedness,  liability, or
          obligation  of every  kind,  nature,  type,  and  variety  owed by the
          BORROWERS  (or any of them) to the LENDER  from time to time,  arising
          out of,  related  to, as a result of, or in  connection  with the LOAN
          AGREEMENT,  or any  of  the  transactions  contemplated  by  the  LOAN
          DOCUMENTS (as defined  below),  including all renewals,  refinancings,
          extensions,  substitutions,  amendments, and modifications thereof, no
          matter when or how  created,  arising,  evidenced,  or  acquired,  and
          whether or not presently contemplated or anticipated, whether joint or
          several,  including,  but not limited  to, all  amounts of  principal,
          interest, charges,  reimbursements,  advancements,  escrows, and fees;
          (b) that all sums now or hereafter  due and owing by the BORROWERS (or
          any of them) to the LENDER arising out of, related to, as a result of,
          or in  connection  with the LOAN,  the  LETTERS OF CREDIT,  the CREDIT
          FACILITY, the LOAN AGREEMENT, or any of the transactions  contemplated
          by the LOAN  DOCUMENTS,  shall be paid  when  and as due,  whether  by
          reason of installment, maturity, acceleration or otherwise, time being
          of the essence; and (c) the timely, complete,  continuous,  and strict
          performance  and  observance  by the  BORROWERS  of each of the terms,
          covenants, agreements and conditions contained in any and all existing
          or future documents,  instruments,  agreements,  and writings of every
          kind, nature, type, and variety which evidence,  reflect, embody, give
          rise to or  secure  any  and all  existing  and  future  indebtedness,
          liabilities,  and  obligations of any kind of the BORROWERS (or any of
          them) to the LENDER  arising out of, related to, as a result of, or in
          connection with the LOAN, the LETTERS OF CREDIT,  the CREDIT FACILITY,
          the LOAN AGREEMENT,  or any of the transactions  contemplated  thereby
          (together with the LOAN AGREEMENT, collectively, LOAN DOCUMENTS). As
          used in this  GUARANTY,  the  term  OBLIGATIONS  shall  refer to the
          obligations of payment,  performance,  and  indemnification  which the
          GUARANTOR has undertaken and assumed  pursuant to this GUARANTY,  both
          as described in this Section and in other Sections of this GUARANTY.

          Section 2. Maximum Amount of Guaranty.  The monetary  liability of the
          GUARANTOR with respect to the  OBLIGATIONS  hereunder shall be limited
          to  the  sum  of  One   Million   Eight   Hundred   Thousand   Dollars
          ($1,800,000.00)  (GUARANTY  MONETARY  AMOUNT);   provided  that  the
          proceeds of the  liquidation  of any of the  collateral  securing  the
          obligations  of the  BORROWERS  (or any of them) to the LENDER and any
          payments made by any of the BORROWERS or any other guarantor,  and any
          other  payments  obtained from any other source,  shall not be applied
          to,  or be  considered  a  discharge  of,  the  OBLIGATIONS  until all
          amounts,  other than those which have been guaranteed,  have been paid
          in full.  Notwithstanding  the  immediately  preceding  sentence,  the
          GUARANTY  MONETARY AMOUNT and the limitation set forth in this Section
          on  the  monetary  liability  of the  GUARANTOR  with  respect  to the
          OBLIGATIONS  shall not include nor be deemed a limit upon the LENDERS
          right  pursuant  to any other  Section  of this  GUARANTY  (including,
          without  limitation,  Section 18 hereof) to recover from the GUARANTOR
          costs and expenses, including reasonable attorneys fees, in enforcing
          or realizing upon this GUARANTY.  The GUARANTY  MONETARY AMOUNT may be
          reduced at each fiscal  year-end date  (beginning  with the BORROWERS
          fiscal year ending  December 31, 1999) upon the  determination  by the
          LENDER,  in each  instance,  that  the  BORROWERS  have  achieved  and
          satisfied the following conditions precedent:  (a) no EVENT OF DEFAULT
          (as  defined  below and as defined in the LOAN  AGREEMENT)  shall have
          occurred  hereunder or under the LOAN AGREEMENT during the fiscal year
          of the BORROWERS  ending on such fiscal  year-end date; (b) no DEFAULT
          (as  defined  in  the  LOAN  AGREEMENT)  shall  have  occurred  and be
          continuing on such fiscal year end date;  (c) no default  (defined for
          purposes  of this  clause (c)  to mean  any  event,  occurrence  or
          omission  which,  with the giving of notice,  the passage of time,  or
          both,  would constitute an EVENT OF DEFAULT) under this GUARANTY shall
          have  occurred and be  continuing on such fiscal  year-end  date;  (d)
          EBITDA (as defined in the LOAN  AGREEMENT)  of the BORROWERS and their
          consolidated  subsidiaries for the fiscal year of the BORROWERS ending
          on such  fiscal  year-end  date,  and  reported  to the  LENDER by the
          BORROWERS in their audited annual financial statements for such fiscal
          year,  shall  have been equal to at least Five  Million  Five  Hundred
          Thousand  Dollars  ($5,500,000.00);  and (e) NET PROFIT  AFTER TAX (as
          defined in the LOAN AGREEMENT) of the BORROWERS and their consolidated
          subsidiaries  for the  fiscal  year of the  BORROWERS  ending  on such
          fiscal  year-end  date, and reported to the LENDER by the BORROWERS in
          their audited annual financial  statements for such fiscal year, shall
          have been equal to at least One Million Three Hundred Thousand Dollars
          ($1,300,000.00).  On the first fiscal year-end date as of which all of
          the foregoing  conditions  precedent are achieved and  satisfied,  the
          GUARANTY  MONETARY  AMOUNT  under this GUARANTY  shall be the sum of
          Nine Hundred  Thousand  Dollars  ($900,000.00).  On the second  fiscal
          year-end  date as of which all of the foregoing  conditions  precedent
          are achieved and satisfied,  this GUARANTY shall be released.  As used
          in this Section 2, the term fiscal year shall mean the FISCAL YEAR
          of the BORROWERS as defined in the LOAN AGREEMENT.

          Section 3. Nature Of Guaranty.  This GUARANTY: (a) is (i) irrevocable,
          (ii) absolute and unconditional, (iii) direct, immediate, and primary,
          and (iv) one of  payment  and not just  collection;  and (b) makes the
          GUARANTOR a surety to the LENDER with respect to the  OBLIGATIONS  and
          the equivalent of a co-obligor  with the BORROWERS.  Without  limiting
          the foregoing,  it is specifically  understood that any  modification,
          limitation or discharge of any of the  liabilities  or  obligations of
          the  BORROWERS  (or any of  them),  any other  guarantor  or any other
          obligor under any of the LOAN DOCUMENTS,  arising out of, or by virtue
          of, any bankruptcy, arrangement,  reorganization or similar proceeding
          for  relief of debtors  under  federal  or state law  initiated  by or
          against the  BORROWERS  (or any of them),  any other  guarantor or any
          obligor  under  any of the LOAN  DOCUMENTS  shall not  modify,  limit,
          lessen, reduce, impair,  discharge,  or otherwise affect the liability
          of the GUARANTOR hereunder in any manner whatsoever, and this GUARANTY
          shall remain and continue in full force and effect.

          Section 4. Accuracy Of Representations.  The GUARANTOR guaranties that
          all representations and warranties made by the GUARANTOR to the LENDER
          prior to or after the date of this  GUARANTY are and will  continue to
          be true, correct, accurate, and complete and not knowingly misleading,
          and,  subject to the  limitations  set forth in Section 2 hereof,  the
          GUARANTOR  agrees to indemnify  and hold the LENDER  harmless from any
          loss,  cost, or expense which the LENDER may suffer,  sustain or incur
          as a result of any  representation  or statement of the  BORROWERS (or
          any of them) or of the GUARANTOR being  materially  false,  incorrect,
          inaccurate, incomplete, or knowingly misleading.

          Section 5. Representations And Warranties Of Guarantor.  To induce the
          LENDER to accept this GUARANTY for the purposes for which it is given,
          the GUARANTOR represents and warrants to the LENDER as follows:

          (a) The GUARANTOR is a corporation  duly organized,  validly  existing
          and in good standing under the laws of the state of its incorporation.
          The GUARANTOR has the lawful power to own its properties and to engage
          in the  businesses  it  conducts,  and is duly  qualified  and in good
          standing as a foreign  corporation  in the  jurisdictions  wherein the
          nature of the business  transacted by it or property owned by it makes
          such qualification  necessary and the failure to so qualify would have
          a material  adverse  effect on the ability of the GUARANTOR to perform
          its OBLIGATIONS hereunder.

          (b) Any financial statements submitted by the GUARANTOR to the LENDER,
          including  any  schedules  and  notes  pertaining  thereto,  have been
          prepared in accordance with G.A.A.P. (as defined below), and fully and
          fairly  present the financial  condition of the GUARANTOR at the dates
          thereof and the results of operations for the periods covered thereby,
          and  there  has  been no  material  adverse  change  in the  financial
          condition or businesses of the GUARANTOR from the dates thereof to the
          date  hereof,  other than as  disclosed  to the LENDER or in any other
          public document or press releases.  All information submitted by or on
          behalf of the GUARANTOR in connection  with any of the  OBLIGATIONS is
          true,  accurate and  complete in all material  respects as of the date
          made  and  contains  no  knowingly  false,  incomplete  or  misleading
          statements.

          (c)  There  are  no  material  actions,  suits,   investigations,   or
          proceedings pending, or to the knowledge of the GUARANTOR,  threatened
          against  the  GUARANTOR  or the  assets  of the  GUARANTOR,  except as
          specifically disclosed on Schedule 5(c) attached hereto. The GUARANTOR
          has no material direct or contingent  liability known to the GUARANTOR
          and not previously  disclosed to the LENDER except (i) as disclosed in
          the financial  statements and (ii) for liabilities and obligations (A)
          incurred in the ordinary  course of business and consistent  with past
          practices  and (B) the  restructuring  charges and  write-offs  in the
          third and fourth  quarters  of 1999  disclosed  in the press  releases
          attached  hereto  or in any  other  public  documents,  nor  does  the
          GUARANTOR  know of or have any  reason  to expect  any other  material
          adverse change in the  GUARANTORS  assets,  liabilities,  properties,
          business, or condition, financial or otherwise.

          (d)  The  GUARANTOR  is  not in  default  with  respect  to any of its
          existing  indebtedness,  except as specifically  disclosed on Schedule
          5(d) attached hereto,  and the making and performance of this GUARANTY
          will  not  (immediately,  with the  passage  of time,  the  giving  of
          notices,  or  both),  (i)  violate  the  charter  or  by-laws  of  the
          GUARANTOR,  (ii)  violate any laws,  (iii)  result in a default  under
          material any contract, agreement, or instrument to which the GUARANTOR
          is a party or by which the GUARANTOR or its property is bound, or (iv)
          result in the creation or imposition  of any security  interest in, or
          lien or  encumbrance  upon,  any of the  assets of the  GUARANTOR.  No
          approval,  consent,  order,  authorization  or  license  by, or giving
          notice  to,  or  taking  any  other   action  with   respect  to,  any
          governmental  or  regulatory  authority  or agency is required for the
          execution  and delivery by the  GUARANTOR of this  GUARANTY or for the
          performance by the GUARANTOR of any of the agreements and  obligations
          hereunder.

          (e) The GUARANTOR has the power and legal  authority to enter into and
          perform  this  GUARANTY,  to incur the  OBLIGATIONS,  and to  perform,
          observe  and  comply  with  all  of  the  GUARANTORS  agreements  and
          obligations  hereunder.  The GUARANTOR has taken all corporate  action
          necessary to authorize the  execution,  delivery,  and  performance of
          this GUARANTY.

          (f)  This  GUARANTY,  when  delivered,  will be  valid,  binding,  and
          enforceable in accordance with its terms.

          (g) The incurring or  satisfaction of the OBLIGATIONS has not left and
          will not leave the GUARANTOR  insolvent,  with an  unreasonably  small
          capital, or unable to pay existing or future debts as they mature.

          Section 6.  Reporting  Requirements.  The  GUARANTOR  shall submit the
          following items to the LENDER:

          (a) As soon as available  and in any event within fifty (50)  calendar
          days after the end of each of the first three fiscal  quarters of each
          fiscal year of the GUARANTOR, the GUARANTOR shall submit to the LENDER
          its  quarterly  report on Form  10-Q,  certified  by an officer of the
          GUARANTOR  familiar  with the  financial  operations  of the GUARANTOR
          (subject to year-end adjustments).

          (b) As soon as available  and in any event  within one hundred  thirty
          (130)  calendar  days  after  the  end  of  each  fiscal  year  of the
          GUARANTOR,  the GUARANTOR shall submit to the LENDER its annual report
          on Form 10-K.

          (c) All financial statements shall be in reasonable detail,  including
          all supporting  schedules and comments  necessary to verify or confirm
          entries in the financial statements. All financial statements shall be
          prepared in accordance  with G.A.A.P.  As used in this  GUARANTY,  the
          term  G.A.A.P  means,  with  respect to any date of  determination,
          generally  accepted  accounting  principles  as used by the  Financial
          Accounting   Standards   Board  and/or  the   American   Institute  of
          Certificate Public  Accountants,  consistently  applied and maintained
          throughout the periods indicated. The costs of supplying the financial
          statements shall be paid by the GUARANTOR.

          Section 7. Lender Need Not Pursue  Other  Rights.  The LENDER shall be
          under no obligation to pursue any of the LENDERS  rights and remedies
          against any BORROWER or any of the collateral of any BORROWER securing
          the  obligations  of the  BORROWERS  (or any of them) to the LENDER or
          against any other  guarantor or any collateral of any other  guarantor
          before  pursuing  the  LENDERS   rights  and  remedies   against  the
          GUARANTOR.

          Section 8. Certain Rights Of Lender.  The GUARANTOR  hereby assents to
          any and all terms and agreements  between the LENDER and the BORROWERS
          (or any of them) or between  the LENDER and any other  guarantor,  and
          all amendments and modifications  thereof,  whether presently existing
          or  hereafter  made and whether  oral or in  writing.  The LENDER may,
          without compromising,  impairing, diminishing, or in any way releasing
          the GUARANTOR from the OBLIGATIONS and without  notifying or obtaining
          the prior approval of the GUARANTOR, at any time or from time to time:
          (a) waive or excuse a default by the BORROWERS (or any of them) or any
          other guarantor,  or delay in the exercise by the LENDER of any or all
          of the  LENDERS  rights or remedies  with  respect to such default or
          defaults;  (b) grant  extensions of time for payment or performance by
          the  BORROWERS  or  any  other  guarantor;  (c)  release,  substitute,
          exchange, surrender, or add collateral of any BORROWER or of any other
          guarantor, or waive, release, or subordinate, in whole or in part, any
          lien or security  interest  held by the LENDER on any real or personal
          property securing payment or performance,  in whole or in part, of the
          obligations  of the BORROWERS (or any of them) to the LENDER or of any
          other  guarantor;  (d) release the  BORROWERS  (or any of them) or any
          other  guarantor;  (e) apply  payments made by the BORROWERS or by any
          other  guarantor to any sums owed by the  BORROWERS to the LENDER,  in
          any order or manner,  or to any specific  account or accounts,  as the
          LENDER may elect; and (f) modify,  change,  renew, extend, or amend in
          any respect the LENDERS agreement with the BORROWERS (or any of them)
          or any  other  guarantor,  or any  document,  instrument,  or  writing
          embodying  or  reflecting  the  same,   including  without  limitation
          modifications  which  increase  the amount of the  obligations  of the
          BORROWERS  under the LOAN  DOCUMENTS  or extend  the  maturity  of the
          obligations of the BORROWERS under the LOAN DOCUMENTS.

          Section 9. Waivers By Guarantor. The GUARANTOR waives: (a) any and all
          notices  whatsoever  with respect to this  GUARANTY or with respect to
          any of the  obligations  of the  BORROWERS  (or  any of  them)  to the
          LENDER,  including,  but not  limited to,  notice of (i) the  LENDERS
          acceptance  hereof or the  LENDERS  intention to act, or the LENDERS
          action,  in  reliance  hereon,  (ii) the present  existence  or future
          incurring of any of the  obligations of the BORROWERS (or any of them)
          to the LENDER or any terms or amounts  thereof or any change  therein,
          (iii) any  default by the  BORROWERS  (or any of them) or any  surety,
          pledgor,  grantor  of  security,  guarantor  or  any  person  who  has
          guarantied  or  secured  in whole or in part  the  obligations  of the
          BORROWERS  (or any of them) to the LENDER,  and (iv) the  obtaining or
          release of any guaranty or surety agreement,  pledge,  assignment,  or
          other security for any of the  obligations of the BORROWERS (or any of
          them) to the LENDER; (b) presentment and demand for payment of any sum
          due from the  BORROWERS  (or any of them) or any other  guarantor  and
          protest of nonpayment; (c) demand for performance by the BORROWERS (or
          any of  them) or any  other  guarantor;  and (d) any and all  defenses
          based on suretyship or impairment of collateral.

          Section  10.  Unenforceability  Of  Obligations  Of  Borrowers.   This
          GUARANTY  shall  be  valid,  binding,  and  enforceable  even  if  the
          obligations of the BORROWERS to the LENDER which are guarantied hereby
          are now or hereafter become invalid or unenforceable for any reason.

          Section 11. No Conditions Precedent.  This GUARANTY shall be effective
          and  enforceable   immediately  upon  its  execution.   The  GUARANTOR
          acknowledges   that  no  unsatisfied   conditions   precedent  to  the
          effectiveness and enforceability of this GUARANTY exist as of the date
          of its execution and that the effectiveness and enforceability of this
          GUARANTY is not in any way  conditioned or contingent  upon any event,
          occurrence,  or happening,  or upon any  condition  existing or coming
          into existence either before or after the execution of this GUARANTY.

          Section 12. No Duty To  Disclose.  The LENDER shall have no present or
          future duty or  obligation to discover or to disclose to the GUARANTOR
          any information,  financial or otherwise, concerning any BORROWER, any
          other guarantor,  or any collateral securing either the obligations of
          any  BORROWER  to the  LENDER  or of any  other  person  who may  have
          guarantied in whole or in part the obligations of the BORROWERS to the
          LENDER.  The  GUARANTOR  waives  any right to claim or assert any such
          duty or obligation on the part of the LENDER.  The GUARANTOR agrees to
          obtain    all    information    which    the    GUARANTOR    considers
          either appropriate  or relevant to this  GUARANTY  from sources  other
          than the  LENDER and to become  and  remain at all times  current  and
          continuously  apprised of all  information  concerning  the BORROWERS,
          other guarantors, and any collateral which is material and relevant to
          the obligations of the GUARANTOR under this GUARANTY.

          Section  13.  Existing Or Future  Guaranties.  The  execution  of this
          GUARANTY  shall  not  discharge,  terminate  or in any way  impair  or
          adversely affect the validity or  enforceability of any other guaranty
          given by the  GUARANTOR to the LENDER.  The  execution and delivery by
          the  GUARANTOR  of any future  guaranty  for the benefit of the LENDER
          shall not  discharge,  terminate,  or in any way  impair or  adversely
          affect the validity or enforceability of this GUARANTY. All guaranties
          provided by the  GUARANTOR to the LENDER are intended to be cumulative
          and shall remain in full force and effect unless and until  discharged
          and  terminated in accordance  with any expressly  stated  termination
          provisions set forth therein.

          Section 14. Cumulative Liability. The liability of the GUARANTOR under
          this  GUARANTY  shall  be  cumulative  to,  and  not in lieu  of,  the
          GUARANTORS liability under any other LOAN DOCUMENT or in any capacity
          other than as GUARANTOR hereunder.

          Section 15. Obligations Are Unconditional. The payment and performance
          of the OBLIGATIONS  shall be the absolute and  unconditional  duty and
          obligation of the  GUARANTOR,  and shall be independent of any defense
          or  any  rights  of  setoff,  recoupment  or  counterclaim  which  the
          GUARANTOR might  otherwise have against the LENDER,  and the GUARANTOR
          shall pay and perform these  OBLIGATIONS,  free of any  deductions and
          without  abatement,  diminution  or  setoff.  Until  such  time as the
          OBLIGATIONS  have been fully paid and performed,  the  GUARANTOR:  (a)
          shall not suspend or discontinue any payments provided for herein; (b)
          shall  perform  and  observe  all  of  the  covenants  and  agreements
          contained in this GUARANTY;  and (c) shall not terminate or attempt to
          terminate  this  GUARANTY  for any  reason.  No delay by the LENDER in
          making  demand on the GUARANTOR for  satisfaction  of the  OBLIGATIONS
          shall  prejudice or in any way impair the LENDERS  ability to enforce
          this GUARANTY.

          Section 16. Defenses Against Borrowers. The GUARANTOR waives any right
          to assert against the LENDER any defense (whether legal or equitable),
          claim,  counterclaim,  or right of  setoff  or  recoupment  which  the
          GUARANTOR  may now or hereafter  have against the BORROWERS (or any of
          them) or any other guarantor.

          Section 17. Events  Authorizing  Acceleration Of The Obligations.  The
          occurrence of any of the following  (each an EVENT OF DEFAULT) shall
          entitle the LENDER,  without notice or demand,  to accelerate and call
          due the OBLIGATIONS, even if the LENDER has not accelerated and called
          due the sums owed to the LENDER by the BORROWERS: (a) the commencement
          by any of the  BORROWERS  or the  GUARANTOR  of a  voluntary  case  or
          proceeding  under  any  federal  or state  bankruptcy,  insolvency  or
          similar law; (b) the commencement of an involuntary case or proceeding
          against any of the  BORROWERS  or the  GUARANTOR  under any federal or
          state bankruptcy, insolvency, or similar law, and either (i) such case
          or proceeding is not dismissed  within ninety (90) calendar days after
          commencement, or (ii) an order for relief is entered in such case; (c)
          the appointment of a receiver, assignee, custodian, trustee or similar
          official  under any federal or state  insolvency or creditors  rights
          law  for  any  property  of any  BORROWER  or the  GUARANTOR;  (d) the
          GUARANTOR  shall  suffer  final  judgments  for the  payment  of money
          aggregating in excess of Two Hundred Fifty Thousand Dollars ($250,000)
          and shall not  discharge  the same within a period of thirty (30) days
          unless, pending further proceedings,  execution has not been commenced
          or if commenced has been effectively stayed; (e) the occurrence of any
          EVENT OF DEFAULT as such term is defined in the LOAN AGREEMENT;  (f)
          a failure  of the  GUARANTOR  to perform  any  covenant  or  agreement
          contained  in this  GUARANTY  or in any other  agreement  between  the
          GUARANTOR and the LENDER;  (g) any  representation or warranty made in
          this  GUARANTY or in any report or  financial  statement  furnished in
          connection  with this  GUARANTY,  shall  prove to have  been  false or
          misleading  when made;  (h) the  LENDER in the good  faith  reasonable
          exercise of the LENDERS discretion determines that a material adverse
          change has occurred in the financial  condition of the GUARANTOR;  (i)
          the  liquidation  or  dissolution  of any of the  BORROWERS  or of the
          GUARANTOR;  or (j) a failure of the  GUARANTOR  to satisfy  any of the
          obligations of the GUARANTOR to the LENDER with respect to any loan or
          extension of credit by the LENDER to the  GUARANTOR or under any other
          guaranty given by the GUARANTOR to the LENDER.

          Section 18.  Expenses Of Collection And Attorneys  Fees.  Should this
          GUARANTY  be referred to an attorney  for  collection,  the  GUARANTOR
          shall pay all of the  holders  reasonable  costs,  fees and  expenses
          resulting from such referral,  including reasonable  attorneys  fees,
          which the holder may incur, even though suit has not been filed.

          Section  19.  Interest  Rate After  Judgment.  If  judgment is entered
          against the  GUARANTOR  on this  GUARANTY,  the amount of the judgment
          entered (which,  unless  applicable law  specifically  provides to the
          contrary,  and  subject  to the  limitations  set  forth in  Section 2
          hereof,  includes all principal,  prejudgment interest,  late charges,
          prepayment  charges  if any are  provided  for,  collection  expenses,
          attorneys  fees,  and court costs) shall bear interest at the highest
          rate after default  authorized by the LOAN DOCUMENTS as of the date of
          entry of the judgment to the extent  permitted by  applicable  law. In
          the event any statute or rule of court  specifies the rate of interest
          which a judgment on this GUARANTY may bear or the amount on which such
          interest  rate may  apply  and such  rate or  amount is less than that
          called  for in the  preceding  sentence  absent  a  restriction  under
          applicable law, the GUARANTOR agrees to pay to the order of the LENDER
          an amount as will equal the  interest  computed  at the  highest  rate
          after default provided for in the LOAN DOCUMENTS which would be due on
          the  judgment  amount  (which,  for this  purpose,  but subject to the
          limitations  set forth in  Section 2 hereof,  shall be  considered  to
          include all principal,  prejudgment interest, late charges, prepayment
          charges if any are provided for,  collection expense fees,  attorneys
          fees,  and court  costs)  less the  interest  due on the amount of the
          judgment which bears judgment interest.

          Section  20.  Enforcement  During  Bankruptcy.   Enforcement  of  this
          GUARANTY  shall not be stayed or in any way delayed as a result of the
          filing of a  petition  under the United  States  Bankruptcy  Code,  as
          amended, by or against any or all of the BORROWERS.  Should the LENDER
          be required to obtain an order of the United States  Bankruptcy  Court
          to begin  enforcement  of this GUARANTY after the filing of a petition
          under the United States Bankruptcy Code, as amended, by or against any
          or all of the BORROWERS,  the GUARANTOR hereby consents to this relief
          and agrees to file or cause to be filed all  appropriate  pleadings to
          evidence  and  effectuate  such  consent  and to enable  the LENDER to
          obtain the relief requested.

          Section  21.  Remedies  Cumulative.  All of the  LENDERS  rights  and
          remedies shall be cumulative and any failure of the LENDER to exercise
          any right hereunder shall not be construed as a waiver of the right to
          exercise  the same or any other  right at any  time,  and from time to
          time, thereafter.

          Section  22.  Continuing  Guaranty.  This  GUARANTY  is  a  continuing
          guaranty of all existing and future  obligations  of the BORROWERS (or
          any of them) to the LENDER arising out of, related to, as a result of,
          or in  connection  with the LOAN,  the  LETTERS OF CREDIT,  the CREDIT
          FACILITY, the LOAN AGREEMENT, or any of the transactions  contemplated
          by the LOAN  DOCUMENTS.  Except as provided in Section 2 hereof,  this
          GUARANTY  may not be  terminated  by the  GUARANTOR  until  after  the
          termination of the LOAN  DOCUMENTS,  in accordance with the provisions
          thereof,  and the  payment  (which  payment  shall not be  subject  to
          challenge or contest) in full of all of the OBLIGATIONS and all of the
          BORROWERS  obligations  and  liabilities to the LENDER under the LOAN
          DOCUMENTS.

          Section  23.  Reinstatement.  If at any time any  payment,  or portion
          thereof, made by, or for the account of, any BORROWER or the GUARANTOR
          on account of any of the obligations and liabilities  under any of the
          LOAN   DOCUMENTS  is  set  aside  by  any  court  or  trustee   having
          jurisdiction  as a voidable  preference,  or fraudulent  conveyance or
          must  otherwise be restored or returned by the LENDER to a BORROWER or
          any other person or entity under any  insolvency,  bankruptcy or other
          federal  and/or  state  laws  or  as  a  result  of  any  dissolution,
          liquidation or  reorganization  of any BORROWER or any other person or
          entity, or for any other reason, the GUARANTOR hereby agrees that this
          GUARANTY  shall  continue  and  remain in full  force and effect or be
          reinstated,  as the case may be, all as though such payment(s) had not
          been made.
          Section 24.  Rights Of  Subrogation,  Etc. In the event the  GUARANTOR
          pays any sum to or for the  benefit  of the  LENDER  pursuant  to this
          GUARANTY,  the  GUARANTOR  may not enforce any right of  contribution,
          indemnification,  exoneration,  reimbursement,  subrogation  or  other
          right or remedy  against any  BORROWER,  any other  guarantor,  or any
          collateral, whether real, personal, or mixed, securing the obligations
          of  any  BORROWER  to  the  LENDER  or the  obligations  of any  other
          guarantor to the LENDER until such time as the LENDER has been paid in
          full and has no further claim against any of the BORROWERS,  any other
          guarantor,  or any collateral.  The GUARANTOR  waives and releases any
          claim which the  GUARANTOR  hereafter  may have  against the LENDER if
          some action of the LENDER, whether intentional or negligent,  impairs,
          destroys,  or in any way adversely  affects any right of contribution,
          indemnification,  exoneration, reimbursement, subrogation, or the like
          which the GUARANTOR may have upon the payment of any sum to or for the
          benefit of the LENDER pursuant to this GUARANTY.

          Section 25.  Subordination Of Certain  Indebtedness.  If the GUARANTOR
          advances any sums to any BORROWER or its successors or assigns,  or if
          any  BORROWER or its  successors  or assigns  shall  hereafter  become
          indebted  to the  GUARANTOR,  such  sums  and  indebtedness  shall  be
          subordinate  in all respects to the amounts then or thereafter due and
          owing to the LENDER by such BORROWER.

          Section 26.  Renewals,  Etc. This GUARANTY shall apply to all sums now
          or  hereafter  owed by any of the  BORROWERS  to the LENDER and to all
          extensions,  modifications,  amendments, renewals,  substitutions, and
          refinancings thereof.

          Section  27.  Choice  Of  Law.  The  laws  of the  State  of New  York
          (excluding,  however,  conflict of law principles) shall govern and be
          applied to  determine  all issues  relating to this  GUARANTY  and the
          rights and obligations of the parties hereto,  including the validity,
          construction,  interpretation, and enforceability of this GUARANTY and
          its various  provisions and the  consequences  and legal effect of all
          transactions  and  events  which  resulted  in the  issuance  of  this
          GUARANTY  or which  occurred  or were to occur as a direct or indirect
          result of this GUARANTY having been executed.

          Section  28.  Consent  To  Jurisdiction;  Agreement  As To Venue.  The
          GUARANTOR  irrevocably  consents to the non-exclusive  jurisdiction of
          the courts of the State of  Maryland  and the State of New York and of
          the United States  District Court for the District of Maryland and for
          the Southern District of New York, if a basis for federal jurisdiction
          exists. The GUARANTOR agrees that venue shall be proper in any circuit
          court of the State of  Maryland  or the State of New York  selected by
          the LENDER or in the United States  District Court for the District of
          Maryland  or for the  Southern  District  of New  York if a basis  for
          federal  jurisdiction  exists  and  waives  any right to object to the
          maintenance  of a suit in any of the  state or  federal  courts of the
          State of  Maryland  or the State of New York on the basis of  improper
          venue or of inconvenience of forum.

          Section  29.  Proofs  Of  Sums  Due  On  Guaranty.  In any  action  or
          proceeding  brought  by the  LENDER to  collect  the sums owed on this
          GUARANTY,  a  certificate  signed by an officer of the LENDER  setting
          forth the unpaid  balances of  principal,  and any  accrued  interest,
          default interest,  attorneys fees, and late charges owed with respect
          hereto shall be presumed  correct and shall be  admissible in evidence
          for the purpose of establishing  the truth of what it asserts.  If the
          GUARANTOR  wishes to contest  the  accuracy of the figure set forth in
          any such  certificate,  the GUARANTOR shall have the burden of proving
          that the certificate is inaccurate or incorrect.

          Section 30.   Actions  Against  Lender.  Any  action  brought  by  the
          GUARANTOR  against the LENDER which is based,  directly or indirectly,
          on this  GUARANTY  or any  matter  in or  related  to  this  GUARANTY,
          including but not limited to the  obligations  of the BORROWERS to the
          LENDER, the administration,  collection, or enforcement thereof, shall
          be  brought  only in the courts of the State of New York or, if LENDER
          has instituted  action against the GUARANTOR in such court,  the State
          of Maryland.  The GUARANTOR agrees that any forum other than the State
          of Maryland or the State of New York is an inconvenient forum and that
          a suit brought by the  GUARANTOR  against the LENDER in a court of any
          state other than the State of New York or the State of Maryland should
          be forthwith  dismissed or transferred to a court located in the State
          of New York or,  if the  LENDER  has  instituted  action  against  the
          GUARANTOR in such state, the State of Maryland, by that court.

          Section 31.  Invalidity  Of Any Part.  If any provision or part of any
          provision  of this  GUARANTY  shall for any  reason  be held  invalid,
          illegal, or unenforceable in any respect, such invalidity, illegality,
          or  unenforceability  shall not  affect  any other  provisions  or the
          remaining part of any effective provisions of this GUARANTY,  and this
          GUARANTY  shall  be  construed  as  if  such  invalid,   illegal,   or
          unenforceable  provision  or part  thereof  had never  been  contained
          herein,  but only to the  extent  of its  invalidity,  illegality,  or
          unenforceability.

          Section 32. Amendment Or Waiver.  This GUARANTY may be amended only by
          a writing duly executed by the GUARANTOR and the LENDER.  No waiver by
          the LENDER of any of the  provisions  of this  GUARANTY  or any of the
          rights  or  remedies  of the  LENDER  with  respect  hereto  shall  be
          considered effective or enforceable unless in writing.

          Section  33.  Notices.  Any  notice  required  or  permitted  by or in
          connection with this GUARANTY shall be in writing and shall be made by
          facsimile  (confirmed  on the date the facsimile is sent by one of the
          other  methods of giving  notice  provided for in this  Section) or by
          hand delivery, by Federal Express, or other similar overnight delivery
          service, or by certified mail,  unrestricted delivery,  return receipt
          requested,  postage prepaid,  addressed to the LENDER or the GUARANTOR
          at the appropriate address set forth below or to such other address as
          may be  hereafter  specified  by  written  notice by the LENDER or the
          GUARANTOR.  Notice  shall  be  considered  given as of the date of the
          facsimile or the hand delivery, one (1) calendar day after delivery to
          Federal Express or similar overnight  delivery  service,  or three (3)
          calendar  days after the date of mailing,  independent  of the date of
          actual delivery or whether  delivery is ever in fact made, as the case
          may be,  provided  the giver of  notice  can  establish  the fact that
          notice was given as provided herein. If notice is tendered pursuant to
          the  provisions  of  this  Section  and is  refused  by  the  intended
          recipient thereof,  the notice,  nevertheless,  shall be considered to
          have been given and shall be effective as of the date herein provided.

          If to the LENDER:
                  NATIONAL BANK OF CANADA
                  125 West 55th Street
                  New York, New York 10019

          And

                  c/o NATIONAL BANK OF CANADA
                  401 E. Pratt Street, Suite 631
                  Baltimore, Maryland 21202
                  Attn: Robert A. Incorvati, Vice President
                  Facsimile: (410) 837-8359

          If to the GUARANTOR:

          GP STRATEGIES  CORPORATION 9 West 57th Street New York, New York 10019
          Attn.: Andrea D. Kantor, Vice President and Corporate Counsel Fax No.:
          (212) 230-9545

          Section 34. Binding  Nature.  This GUARANTY shall inure to the benefit
          of and be  enforceable  by the LENDER and the LENDER  successors and
          assigns and any other  person to whom the LENDER may grant an interest
          in the  obligations  of the  BORROWERS  to the  LENDER,  and  shall be
          binding upon and enforceable against the GUARANTOR and the GUARANTORS
          successors, and assigns.

          Section 35. Assignability. This GUARANTY or an interest therein may be
          assigned by the LENDER,  or by any other  holder,  at any time or from
          time to  time,  without  any  prior  notice  to or  consent  from  the
          GUARANTOR.

          Section 36.  Final  Agreement.  This  GUARANTY  contains the final and
          entire agreement  between the LENDER and the GUARANTOR with respect to
          the guaranty by the  GUARANTOR of the  BORROWERS  obligations  to the
          LENDER. There are no separate oral or written  understandings  between
          the LENDER and the GUARANTOR with respect thereto.

          Section 37. Tense, Gender,  Defined Terms,  Captions.  As used herein,
          the plural  includes  the  singular,  and the  singular  includes  the
          plural. The use of any gender applies to any other gender. All defined
          terms  are  completely   capitalized  throughout  this  GUARANTY.  All
          captions are for the purpose of convenience only.

          Section 38. Seal And  Effective  Date.  This GUARANTY is an instrument
          executed under seal and is to be considered  effective and enforceable
          as of the date set forth on the first page hereof,  independent of the
          date of actual execution.

          Section 39. Waiver Of Trial By Jury. The GUARANTOR and the LENDER,  by
          their execution and acceptance,  respectively, of this GUARANTY, agree
          that any suit,  action, or proceeding,  whether claim or counterclaim,
          brought or  instituted  by either  party  hereto or any  successor  or
          assign of any party on or with  respect to this  GUARANTY  or which in
          any way  relates,  directly  or  indirectly,  to this  GUARANTY or any
          event,  transaction,  or  occurrence  arising  out  of or in  any  way
          connected  with this  GUARANTY,  or the  dealings of the parties  with
          respect  thereto,  shall be tried  only by a court  and not by a jury.
          EACH PARTY HEREBY EXPRESSLY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY
          SUCH SUIT, ACTION, OR PROCEEDING.

          [Signatures Begin On Next Page]
          IN WITNESS WHEREOF,  the GUARANTOR has executed this GUARANTY with the
          specific intention of creating a document under seal.

ATTEST/WITNESS:                     GUARANTOR:

                                            GP STRATEGIES CORPORATION

___________________________         By:              (SEAL)
                                                     Name:
                                                     Title:

         ACKNOWLEDGMENT

          STATE OF ________________, CITY/COUNTY OF _________________, TO WIT: I
          HEREBY CERTIFY that on this ______ day of March,  2000, before me, the
          undersigned  Notary Public of the aforesaid  jurisdiction,  personally
          appeared __________________________,  and acknowledged himself/herself
          to be the  ___________________________ of GP STRATEGIES CORPORATION, a
          Delaware corporation, and that he/she, as such, being authorized so to
          do,  executed  the  foregoing  instrument  for  the  purposes  therein
          contained  by  signing  the  name  of GP  STRATEGIES  CORPORATION,  by
          himself/herself as ___________________________.

         IN WITNESS MY Hand and Notarial Seal.

                                               ___________________________(SEAL)
                                                     NOTARY PUBLIC
My Commission Expires:
______________________Exhibit 10.6

                         SUBSCRIPTION AND SHAREHOLDERS AGREEMENT

                                  by and among

                                  AVANTIUM B.V.
                   (to be renamed AVANTIUM INTERNATIONAL B.V.)
                                (as the Company)

                        B.V. LICHT EN KRACHT MAATSCHAPPIJ
                          (as the Chemical Shareholder)

                             SMITHKLINE BEECHAM PLC
                                S.R. ONE, LIMITED
                      (as the Pharmaceutical Shareholders)

                                GSE SYSTEMS, INC.
                        (as the Informatics Shareholder)

                         DELFT UNIVERSITY OF TECHNOLOGY
                              UNIVERSITY OF TWENTE
                       EINDHOVEN UNIVERSITY OF TECHNOLOGY
                        (as the University Shareholders)

                           THE GENERICS GROUP LIMITED
                              ALPINVEST HOLDING NV
                         (as the Financial Shareholders)

                          Dated as of February 24, 2000

--------------------------------------------------------------------------------

                        CARON & STEVENS/BAKER & McKENZIE
                                 Leidseplein 29
                                1017 PS Amsterdam
                                 The Netherlands

          The  shares in the share  capital  of  Avantium  B.V.  (to be  renamed
          Avantium  International  B.V.) to be offered and purchased pursuant to
          this Agreement are to be offered, sold, transferred or delivered in or
          from the  Netherlands  as part of their initial  distribution  only to
          individuals  or  legal  entities  who or  which  trade  or  invest  in
          securities in the conduct of business or a profession - such as banks,
          brokers,  dealers,  institutional  investors and multinationals with a
          treasury  department - in accordance with Article 2 of the Netherlands
          Exemption  Regulation  to the  Act on the  Supervision  on  Securities
          Transactions 1995 ("Vrijstellingsregeling Wet toezicht effectenverkeer
          1995").
               ("Vrijstellingsregeling Wet toezicht effectenverkeer 1995").
                                       TABLE OF CONTENTS

Article 1. Definitions and Interpretation   7
Article 2. Company's Articles of Association
                Shares and Corporate Governance      10
Article 3. Issue and Subscription   9
Article 4. Conditions Precedent     10
Article 5. Completion      10
Article 6. Decision Procedure within One Group of Shareholders         12
Article 7. Stock Option Plan        12
Article 8. Transfer of Shares       12
Article 9. Preference in Liquidation and Sales Proceeds       13
Article 10. Conversion Right        14
Article 11. Weighted Average Anti-Dilution Adjustment         14
Article 12. Registration Right      20
Article 13. Drag-along Right        15
Article 14. Tag-along Right         16
Article 15. Redemption Right        22
Article 16. Limitation on Shareholding      16
Article 17. Dividends      16
Article 18. Reporting      17
Article 19. Representations and Warranties  17
Article 20. Confidentiality         18
Article 21. Company's Auditors      18
Article 22. Shareholders and Customer Treatment      18
Article 23. Notices        19
Article 24. Expenses       30
Article 25. Governing Law and Jurisdiction  31
Article 26. Counterparts   31
Article 27. General Provisions      31

Exhibits
Exhibit 1         Articles
Exhibit 2         Notarial Deed
Exhibit 3         Business Principles
Exhibit 4         Technology Transfer Agreement Shell
Exhibit 5         Technology Transfer Agreement SmithKline
Exhibit 6         Technology Transfer Agreement GSE
Exhibit 7A        Letter of Intent
Exhibit 7B        Employment Agreement
Exhibit 8         Secondment Agreement

Schedules
Schedule 1        Business Plan
Schedule 2        Shareholdings
Schedule 3        Resolution Incorporator
Schedule 4        Stock Option Plan
Schedule 5        Deed of Adherence
Schedule 6        Terms of Business
Schedule 7        Terms of Sale and Purchase
Schedule 8        Weighted Average Anti-Dilution Adjustment

          THIS  SUBSCRIPTION AND  SHAREHOLDERS  AGREEMENT (the  Agreement) is
          made and  entered  into on this  24th day of  February,  2000,  by and
          among:

          1.  AVANTIUM  B.V.  (the  Company),  a private  company with limited
          liability,  with its registered  address at Carel van  Bylandtlaan 30,
          2596  HR  The  Hague,   The  Netherlands   (to  be  renamed   AVANTIUM
          INTERNATIONAL B.V.)

          2. B.V. LICHT EN KRACHT MAATSCHAPPIJ "Shel"), a private company with
          limited   liability,   with  its  registered   address  at  Carel  van
          Bylandtlaan 30, 2596 HR The Hague, The Netherlands;

          3. SMITHKLINE  BEECHAM PLC  ("SmithKline"),  a public company with its
          registered  address at New Horizons  Court,  Brentford,  Middlesex TW8
          9EP, United Kingdom;

          4.  S.R.  ONE,  LIMITED  ("SRO"),   a  private  company  with  limited
          liability,  with its registered address at Four Tower Bridge, 200 Barr
          Harbor Drive, Suite 250, West Conshohocken, PA 19428, United States of
          America;

          5. GSE SYSTEMS,  INC.  ("GSE"),  a Delaware public  company,  with its
          registered address at 9189 Red Branch Road, Columbia,  Maryland 21045,
          United States of America;

          6. DELFT UNIVERSITY OF TECHNOLOGY  ("Delft"),  a university,  with its
          registered address at Julianalaan 134, 2628 BL Delft, The Netherlands

          7. UNIVERSITY OF TWENTE ("Twente"), a university,  with its registered
          address at Drienerlaan 5, 7522 NB Enschede, The Netherlands;

          8.  EINDHOVEN  UNIVERSITY OF TECHNOLOGY  ("Eindhoven"),  a university,
          with  its  registered  address  at Den  Dolech  2,  HG  1.03,  5612 AZ
          Eindhoven, The Netherlands;

          9. THE GENERICS  GROUP LIMITED  ("Generics"),  a private  company with
          limited  liability,  with its  registered  address  at  Harston  Mill,
          Harston, Cambridge CB2 5NH, United Kingdom; and

          10. ALPINVEST HOLDING NV ("Alpinvest"),  a public company with limited
          liability,  with  its  registered  address  at  Gooimeer  3,  1411  DC
          Naarden-Vesting, The Netherlands;

each of the parties to this Agreement a "Party" and collectively the Parties;
Party 2 the "Chemical Shareholder";
Parties 3 and 4 collectively the "Pharmaceutical Shareholders";
Party 5 the "Informatics Shareholder";
Parties 2 through 5 collectively the "Industry Shareholders";
Parties 6 through 8 collectively the "University Shareholders";
Parties 9 and 10 collectively the "Financial Shareholders"; and
Parties 2 through 10 collectively the "Shareholders";

WHEREAS:

          A. The  Company  is  incorporated  by Shell ( the  "Incorporator")  on
          January 28, 2000, in order to develop high-speed  experimentation  and
          simulation technologies,  also referred to as HSE & S, for application
          in  new  product  and  process   development  in  the  pharmaceutical,
          petrochemical   and  fine   chemical,   bio  technology  and  polymers
          industries (the "Business").

          B.  The  Company  has or will  have,  as soon as  possible  after  the
          Completion  Date,  incorporated  as  its  operating  company  Avantium
          Technologies B.V., a directly wholly-owned subsidiary

          C. The Shareholders have agreed to subscribe for shares in the Company
          on the terms and conditions of this Agreement so that the Business can
          be established.

          D. The Company has delivered to the  Shareholders a business plan (the
          Business Plan), a copy of which is attached hereto as Schedule 1.

          E. Each of the  Shareholders  has  conducted  and to its  satisfaction
          finalized its own  independent due diligence  investigation  as to the
          viability of the Business Plan.

          F. A due diligence  investigation  as to the viability of the Business
          Plan,  including but not limited to the  Intellectual  Property Rights
          (as hereinafter defined) and Tangibles (as hereinafter  defined),  has
          been  completed  and the  results of the due  diligence  exercise  are
          satisfactory   to  the   Shareholders   in  their  sole  and  absolute
          discretion.

          G. A copy of the Business  Plan has been  submitted to the  Securities
          Supervision  Board  (Stichting  Toezicht   Effectenverke)  of  the
          Netherlands  pursuant to article 2 of the Exemption  Regulation to the
          Act  on  the   Supervision   of  the   Securities   Trade   Act   1995
          (Vrijstellingsregeling Wet Toezicht Effectenverkeer 1995)

          H. The Parties  hereto wish to have their  mutual  relations
          and their  respective  rights and obligations in respect of their
          investment and their resulting shareholdings in the Company to be
          governed by the  provisions of this Agreement and the articles of
          association of the Company.

          DECLARED TO HAVE AGREED AS FOLLOWS
          Article 1. Definitions and Interpretation

1.1In this Agreement and all of its schedules (hereinafter individually referred
to as a ("Schedule") and exhibits  (hereinafter  individually  referred to as an
(Exhibit), the following capitalized words shall have the meaning referred to in
the provisions indicated below:

Agreement...........................................................introduction
Alpinvest...........................................................introduction
Articles.............................................................Article 2.1
Board................................................................Article 2.3
Board of Managing Directors..........................................Article 2.3
Business Plan..........................................................recital D
Business Principles..................................................Article 5.3
Business...............................................................recital A
Cash.................................................................Article 3.1
Chemical Shareholder................................................introduction
Common Shares........................................................Article 2.2
Company.............................................................introduction
Completion...........................................................Article 5.1
Completion Date......................................................Article 5.1
Conditions...........................................................Article 4.1
Deed of Adherence....................................................Article 8.3
Delft...............................................................introduction
Documentation........................................................Article 5.3
Eindhoven...........................................................introduction
Exhibit..............................................................Article 1.1
Financial Shareholders..............................................introduction
Foundation...........................................................Article 7.2
Generics............................................................introduction
GMS..................................................................Article 7.1
GSE.................................................................introduction
Incidental Shares...................................................Article 12.2
Incorporator...........................................................recital A
Industry Shareholders...............................................introduction
Informatics Shareholder.............................................introduction
Intellectual Property Rights.........................................Article 3.1
IPO.................................................................Article 12.1
Negotiator..........................................................Article 13.2
Notarial Deed........................................................Article 3.5
Parties.............................................................introduction
Party...............................................................introduction
Pharmaceutical Shareholders.........................................introduction
Preferred Proceeds...................................................Article 9.1
Preferred Shares.....................................................Article 2.2
Registration Shares.................................................Article 12.1
Schedule.............................................................Article 1.1
Shares...............................................................Article 2.2
Shareholders........................................................introduction
Shell...............................................................introduction
SmithKline..........................................................introduction
SRO.................................................................introduction
Stock Option Plan....................................................Article 7.1
Supervisory Board....................................................Article 2.3
Tangibles............................................................Article 3.1
Technology Transfer Agreements.......................................Article 8.1
Twente..............................................................introduction
University Shareholders.............................................introduction

               1.2The recitals, the exhibits and the schedules to this Agreement
               form an integral part of this Agreement and any reference to this
               Agreement includes such recitals, exhibits and schedules. In this
               Agreement,  reference to a recital,  article, exhibit or schedule
               is a reference  to a recital,  article of, or exhibit or schedule
               to this Agreement, unless the context requires otherwise.

               1.3In this  Agreement,  unless the context  indicates  otherwise,
               references to the singular shall include references to the plural
               and vice versa and  references  to any pronoun  shall include the
               corresponding  masculine,  female or neuter,  and  references  to
               persons  shall include  bodies and  corporate and  unincorporated
               associations of persons.

               1.4In this  Agreement  a  reference  to a  particular  agreement,
               enactment,  regulation or other  document shall be construed as a
               reference to such agreement, enactment, regulation or document as
               it may from time to time be binding,  enforceable or in force, as
               such agreement, enactment, regulation or document may be novated,
               assigned,  re-enacted (with or without  modification),  restated,
               consolidated,   amended  or   supplemented   from  time  to  time
               hereafter.

               1.5In this  Agreement  a  reference  to a company or other  legal
               entity  shall be  construed  so as to include any legal entity or
               entities  into which such company may during the  continuance  of
               this  Agreement be merged by means of a statutory  merger or into
               which it may be split up or demerged.

               1.6In this Agreement  headings are inserted for convenience  only
               and shall not affect the construction of this Agreement.

               Article  2.  Company'   Articles  of  Association,   Shares  and
               Corporate Governance

               2.1Upon Completion,  the Incorporator shall have incorporated the
               Company  as  a  private  limited  liability  company   ("besloten
               vennootschap met beperkte  aansprakelijkheid"  under the laws of
               the Netherlands. The Company' articles of association (as may be
               amended from time to time, the "Articles") are  substantially  in
               the form as attached hereto, as Exhibit 1.

               2.2The Company's share capital shall be divided into two types of
               shares  (collectively  the  ("Shares"):  (i)  common  shares (the
               "Common Shares"), each such share having a nominal value of EUR 1
               (one Euro); and (ii) preferred  shares (the "Preferred  Shares"),
               each such share having a nominal value of EUR 1 (one Euro).

               2.3 The Company shall have a board (the  "Board"),  consisting of
               (i) a board of managing  directors  ("statutair  bestuur") of the
               Company   (the  "Board  of  Managing   Directors")   and  (ii)  a
               supervisory board (the "Supervisory Board").

               2.4 In addition to the Articles,  the members of the  Supervisory
               Board  shall  each  serve  for a period  of 2 (two)  years.  Each
               director may be reappointed.

               2.5 In addition  to the  Articles,  the Board  shall  appoint the
               members to the scientific  advisory board.  Furthermore,  any and
               all  transactions  to be entered into between the Company and any
               of its  Shareholders  require the prior  written  approval of the
               Board

               2.6 In addition to the Articles,  Shareholders who do not have an
               employee directly  nominated as a member of the Supervisory Board
               have observation  rights to the Supervisory Board. 2.7 Each group
               of Shareholders is required to nominate one supervisory  director
               ("commissaris") of the Company. All Shareholders shall vote their
               shares to ensure that the nominees so nominated by the  different
               groups of Shareholders shall be appointed accordingly.

               Article 3. Issue and Subscription

               3.1The  Incorporator agrees to procure that the Company issues to
               each  Shareholder  appearing in column 1 of Schedule 2 the number
               of Preferred  Shares and Common  Shares as set forth against that
               Shareholders  name in  respectively  columns  3(i)  and  4(i) of
               Schedule 2 in  consideration  for the payment by such Shareholder
               of the  amount in cash  ("Cash"),  and/or  intellectual  property
               rights ("Intellectual  Property Rights") and/or tangibles in kind
               ("Tangibles")  as set  forth  against  its  name in  respectively
               columns  5(i),  5(ii) and 5(iv) of Schedule 2 and at such time as
               set forth against its name in  respectively  columns 5(i),  5(ii)
               and 5(iv) of  Schedule  2,  provided,  however,  that such  issue
               occurs within two (2) months after the date of this Agreement. To
               that effect,  the Incorporator shall at the date hereof execute a
               shareholders' resolution,  substantially in the form as set forth
               in Schedule 3,  authorizing  the Board of Managing  Directors  to
               issue such shares. Furthermore, Schedule 3 sets forth such number
               of shares  against  such share  issue  price to be issued to such
               potential  shareholders  which  the Board is  empowered  to issue
               shares to,  such issue  referred  to in Schedule 2 as the "Second
               Closing".

               3.2Each of the  Shareholders  hereby  agree to  subscribe  to the
               same, all subject to the terms and conditions of this Agreement.

               3.3Each of the Shareholders  subscribing to Preferred Shares pays
               for a  Preferred  Share a par  value  of EUR 1 (one  Euro)  and a
               surplus  ("agio") of EUR 9.2167 (nine Euros and twenty-one  point
               sixty-seven eurocents).

               3.4Each of the  Shareholders  agrees to procure that prior to the
               issue,  it shall have made the  payment  of Cash  payable by such
               Shareholder  to the Company as  contribution  to the shares to be
               issued  to such  Shareholder  on each of the  dates as set  forth
               against  its  name in  respectively  columns  5(i)  and  5(iv) of
               Schedule 2 into account number 54.31.72.201 with ABN AMRO Bank in
               the name of "Stichting  Derdengelden  Notariaat  Caron & Stevens"
               (SWIFT-code ABN-ANL 2A).

               3.5The shares will be issued to each of the Shareholders pursuant
               to a  notarial  deed  ("Notarial  Deed") in the form as  attached
               hereto as Exhibit

               2, which will be  executed  by one of the civil law  notaries  of
               Caron & Stevens / Baker & McKenzie in Amsterdam, The Netherlands.

               3.6Each of the  Shareholders  may for internal  purposes hold its
               Shares through an affiliate,  whereby such  Shareholder  controls
               such affiliate and whereby  "control" means the right or power to
               direct or cause the direction of the management  and/or  policies
               of such  affiliate  whether  through the  ownership of securities
               with the right to vote,  under or  pursuant  to any  contract  or
               voting  arrangement,  or  under or  pursuant  to any  statute  or
               sovereign   power,  or  otherwise,   provided  however  that  the
               obligations  under this  Agreement  shall  remain  vested in such
               Shareholder.

               Article 4. Conditions Precedent

               4.1The  obligations  of each of the Parties under this  Agreement
               are   conditional   upon  the  following   conditions   precedent
               ("opschortende voorwaarden") ("Conditions"):

               (a) Parties having  reached  agreement on the  Documentation  (as
               hereinafter defined in Article 5.3);

               (b) all consents and approvals of the Shareholders,  the Company,
               all  government  authorities  and  all  third  parties  that  are
               required under the laws of the Netherlands in connection with the
               transactions as contemplated by this Agreement being obtained and
               in full force and effect at the Completion  Date (as  hereinafter
               defined);

               (c) the European  Commission having been notified and approval or
               sufficient comfort obtained; and

               (d) the  payments  of Cash  pursuant  to Article  3.4 having been
               made.

               4.2Unless specifically waived by the Shareholders,  if any of the
               Conditions  shall not be  fulfilled  on or before the  Completion
               Date (as hereinafter defined), this Agreement shall terminate and
               cease to have any effect  (unless such date is extended by mutual
               written   agreement   between  the  Parties),   except  that  the
               termination  of this Agreement does not affect accrued rights and
               obligations of the Parties at the date of  termination  including
               those obligations of confidentiality.

               Article 5. Completion

               5.1Subject   to  the   provisions   of  Article   4,   completion
               ("Completion")  shall take place on February  24, 2000 or at such
               later date as Parties have agreed upon (the "Completion Date") at
               the  offices of Caron & Stevens / Baker &  McKenzie,  Leidseplein
               29, 1017 PS Amsterdam,  The Netherlands or at such other place as
               shall be mutually agreed between the Parties.

               5.2At Completion, all of the following actions shall be effected:

               (a) the Parties  shall execute and deliver the  Documentation  as
               hereinafter defined I in Article 5.3;

               (b) the  Incorporator  shall  appoint each of (i) Dr. Ian Maxwell
               and  (ii)  Mr.  Richard  John  Artley  as  a  managing   director
               ("statutair  bestuurder")  of the  Company,  and shall accept the
               resignation of Mr.  Maarten Geuze,  Mr. Piet Hein Dieters and Mr.
               Jan van der Eijk as directors of the Company;

               (c) the  Company  shall  provide  a duly  executed  shareholders'
               resolution,  substantially in the form of Schedule 3, authorizing
               the Board of Managing  Directors to issue the shares,  as further
               set  forth  in  Article  3.1;

               (d) the Company and each of the Shareholders  shall appear before
               the civil law notary to execute the Notarial Deed;

               (e) the Shareholders shall appoint each of (i) Mr. Maarten Geuze,
               as the nominee of the Chemical  Shareholder,  (ii) Mrs. Elaine V.
               Jones, as the nominee of the Pharmaceutical  Shareholders,  (iii)
               Mr.  Brian  K.  Southern,  as  the  nominee  of  the  Informatics
               Shareholder,  (iv)  Prof.  dr.  ir.  David N.  Reinhoudt,  as the
               nominee of the University  Shareholders,  (v) Mr. Stan Vermeulen,
               as the nominee of the Financial Shareholders,  and (vi) a nominee
               of the Board of Managing  Directors,  as a  supervisory  director
               (commissari) of the Company;

               (f)  the  Shareholders  shall  instruct  Stichting   Derdengelden
               Notariaat  Caron & Stevens  to  transfer  the  amounts of Cash by
               telephone   transfer  to  the  Companys   bank  account   number
               66.83.93.858 with ING Bank in Amsterdam;

               (g) the Company shall provide  evidence of life  insurance  cover
               having  been  obtained  in  favor  of the  Company  and on  terms
               reasonably  satisfactory to the Parties, on the life and possible
               permanent  disability  of Dr Ian  Maxwell  in the  amount  of EUR
               500,000 (five hundred thousand Euros);

               (h) the Parties  shall do all such  further  acts and execute all
               such further  documents as shall be  appropriate  to fully effect
               the transactions contemplated in this Agreement.

               5.3At  Completion,  all  of  the  following  documents  shall  be
               executed  and/or  delivered,  or in the  case  of the  employment
               agreement agreed upon (collectively, the Documentation):

               (a) this Agreement;

               (b) the Company's business principles,  substantially in the form
               as attached hereto as Exhibit 3 (Business Principles);

               (c)  the  technology  transfer  agreements  (Technology  Transfer
               Agreements)   between   the  Company   and   respectively   Shell
               International  Chemicals B.V., SmithKline and GSE,  substantially
               in the form as attached hereto as respectively Exhibit 4, Exhibit
               5 and Exhibit 6;

               (d) the letter of intent between the Company, Shell International
               Chemicals B.V. and Dr. I.E. Maxwell, substantially in the form as
               attached hereto as Exhibit 7A;

               (e) the  employment  agreement  between  the Company and Dr. I.E.
               Maxwell,  substantially in the form as attached hereto as Exhibit
               7B; and

               (f) the  secondment  agreement  between the Company and  Generics
               substantially in the form as attached hereto as Exhibit 8.

               Article 6. Decision Procedure within One Group of Shareholders

               Where each of the different groups of shareholders is required to
               nominate  or  appoint  a  nominee  or  reach  a  decision,   such
               nomination or decision  needs to be approved by the  shareholders
               representing  at least 51 % (fifty  one  percent)  of the  voting
               rights within each such group of shareholders,  unless such group
               of shareholders has adopted an alternative  procedure,  provided,
               however,  that the general rule as stated above shall  prevail in
               the event the alternative procedure does not properly result in a
               nomination or decision.

               Article 7. Stock Option Plan

               7.1As soon as possible after  Completion,  the Shareholders  will
               ensure  that  the  Company  adopts  a stock  option  plan for the
               Companys  management,  employees  and/or advisors (Stock Option
               Plan),  substantially in the form as attached hereto as Schedule
               4, equal to an amount of 20%  (twenty  percent) of such number of
               common shares as is equal to the sum of the numbers of all issued
               and outstanding  Preferred  Shares and Common Shares at September
               30,  2000.  The Stock  Option Plan shall be  administered  by the
               Board.  Upon a refinancing  round and upon the  recommendation of
               the Board,  the general  meeting of  shareholders  of the Company
               (GMS) shall take into  consideration  increasing  the number of
               stock options.

               7.2The Shareholders will ensure that under the Stock Option Plan,
               any shares to be issued in  connection  with the  exercise of any
               option granted under the Stock Option Plan shall be held in trust
               by a Stichting  Administratiekantoor  (the Foundatio) which for
               that purpose will be incorporated,  and that the Foundation,  for
               each of the  shares it holds,  will  issue a  depository  receipt
               certificaat  van  aandeel)  to  the  holder  of the  option  so
               exercised,   through  which   depository   receipt  the  relevant
               individual  will hold  economic  ownership of the relevant  share
               without being a shareholder  of the Company (and without having a
               right to vote).

               Article 8. Transfer of Shares

               8.1The Shareholders  acknowledge and agree that a Shareholder may
               transfer,  sell, assign,  exchange or otherwise dispose of all or
               any  portion  of its  shares  or any  interest  therein  (each  a
               ("Transfer")only upon and subject to the terms and conditions set
               forth in the Articles and this Article 8. Any attempted  Transfer
               that  does not  comply  with the  terms  and  conditions  of this
               Article 8 and the Articles shall be null and void (nietig). The
               Shareholders   shall   cause  the  Company  to  comply  with  the
               requirements  of this  Article 8 and not to register any Transfer
               of shares unless the provisions of this Article 8 have been fully
               complied with,  provided,  however,  that the pledge of shares in
               connection  with a loan  document  entered into by a  Shareholder
               shall not be considered a Transfer. Notwithstanding, in the event
               that any such pledge  results in a forfeiture,  such lender shall
               be bound by the terms of this Article 8.

               8.2The  Shareholders agree that in the event a Shareholder wishes
               to Transfer  some or all of its shares to a transferee  who is an
               affiliate (as defined in article 2:24(b)  Netherlands Civil Code)
               of the  transferor,  the other  Shareholders  shall  waive  their
               pre-emptive  rights set forth in the  Articles in respect of such
               Transfer, provided, however, that:

               (a) the  transferor  shall procure that the shares so transferred
               will be  re-transferred  to the transferor  immediately upon such
               transferee  (i)  ceasing  to be an  affiliate  of the  transferor
               and/or (ii) being  declared  bankrupt or suspending all payments;
               and(b) the provisions of Article 8.3 are complied with.

               The term affiliate with respect to Shell means: N.V.  Koninklijke
               Nederlandsche Petroleum Maatschappij,  a Netherlands company, the
               Shell  Transport and Trading  Company plc, an English company and
               any company (Parent Company as defined hereinafter),  which is at
               the time in question directly or indirectly affiliated with these
               two companies or either of them,  whereby for the purpose of this
               definition:(a) a particular company is directly affiliated with a
               company or companies if the latter holds/hold shares carrying 50%
               (fifty  percent)  or more of the votes  exercisable  at a general
               meeting (or its equivalent) of the particular company; and

               (b) a particular company is indirectly  affiliated with a company
               or companies  (the Parent  Company or Companie") if a series of
               companies can be specified,  beginning with the Parent Company or
               Companies and ending with a particular  company,  so related that
               each company of the series except the Parent Company or Companies
               is directly  affiliated with one or more companies earlier in the
               series.8.3To effect a Transfer,  a transferee of the shares shall
               execute and deliver to the non-transferring  Shareholders and the
               Company  a  deed  of  adherence,  substantially  in the  form  as
               attached  hereto as Schedule 5 (Deed of Adherenc) by which the
               transferee  agrees to become a party to and be bound by the terms
               and  conditions  of  this  Agreement,  as if such  transferee  is
               substituted  for the  transferring  Shareholder  as to the shares
               transferred,  and the transferor  Shareholder shall discharge all
               its obligations with respect to those shares arising prior to the
               date of the  Transfer.  Upon the  execution  and delivery of such
               instrument and such discharge,  the transferee shall,  subject to
               any applicable  legal  requirements,  become a Shareholder in the
               place of the  transferor as to the shares  transferred  and shall
               have all the rights,  powers,  duties and  obligations  as to the
               shares  transferred by the transferor  under this Agreement.  The
               transferor  shall  then  cease  to be a  Shareholder  as to those
               shares  and shall  have no  further  rights,  powers,  duties and
               obligations  under this  Agreement  in regard to them;  provided,
               however, that the transferor shall remain liable under all of its
               confidentiality undertakings to the Company and the other Parties
               under this  Agreement as if the  transferor  had continued to own
               the shares being  transferred with respect to all matters arising
               prior to the date of the Transfer.

               9.1In the event of any liquidation,  dissolution or winding-up of
               the Company, either voluntary or involuntary,  the holders of the
               Preferred  Shares, if any, shall rank on a parity with each other
               and be  entitled  to  receive,  prior  and in  preference  to any
               distribution  of any of the assets of the  Company,  whether such
               assets are capital surplus or earnings,  to the holders of Common
               Shares,  the amount paid for the  subscription  of the  Preferred
               Shares  plus any  declared  but unpaid  dividends  plus 8% (eight
               percent)  interest  compounded  annually on such shares up to the
               date fixed for distribution (as adjusted for any stock dividends,
               combinations,   recapitalizations   or   splits   and  the  like)
               (collectively, the Preferred Proceeds).

               9.2In the event  the  assets  and  funds  that  pursuant  to this
               article  should be  distributed  to the holders of the  Preferred
               Shares shall be insufficient to fully pay the Preferred Proceeds,
               then such assets and funds shall be distributed ratably among the
               holders  of the  Preferred  Shares  in  proportion  to  the  full
               preferential  amount  each such holder is  otherwise  entitled to
               receive.

               9.3Any  surpluses in assets and funds available for  distribution
               to the Company's shareholders after distribution of the Preferred
               Proceeds to the holders of the Preferred Shares, if any, shall be
               distributed  among the holders of Common Shares pro rata based on
               the number of Common Shares held by each holder.

               9.4The   Parties   hereby   agree  that  in  case  of  a  merger,
               consolidation, reorganization or sale of all or substantially all
               of  the   Company's   assets,   all   proceeds  of  such  merger,
               consolidation, reorganization or sale of all or substantially all
               of the Company's  assets will be  distributed as if such proceeds
               were  generated  from a liquidation  of the Company in which case
               the  provisions of this Article 9 apply mutatis  mutandis to such
               proceeds.

               Article   10.   Conversion   Right10.1Preferred   Shares  may  be
               converted,  at any time,  into Common Shares at a conversion rate
               of 1:1.

               10.2Before  any holder of  Preferred  Shares shall be entitled to
               convert  the same into  Common  Shares,  the  holder  shall  give
               written  notice to the Company that the holder  elects to convert
               the same. The Company shall,  as soon as practicable  thereafter,
               issue to such holder of Preferred  Shares a notice in writing for
               the  number  of  Common  Shares  to which  such  holder  shall be
               entitled as aforesaid.  Such  conversion  shall be deemed to have
               been made immediately  prior to the close of business on the date
               of such surrender of the Preferred Shares to be converted.

               Article 11. Weighted Average  Anti-Dilution  Adjustment11.1In the
               event of an issue of new shares  each of the  Shareholders  shall
               have such pre-emptive rights as contained in the Articles.

               11.2The  Shareholders  agree  not to make use of  their  right to
               limit or suspend the pre-emptive rights of any Shareholder in the
               event of an issue of new shares.

               11.3In  the event of any issue of  additional  Shares  (Common or
               Preferred) in the capital of the Company after  Completion  for a
               price per Share less than EUR 10.2167  (ten Euros and  twenty-one
               point sixty-seven  eurocents),  then the Company shall be obliged
               to issue to the holder of the  Preferred  Shares  such  number of
               Preferred Shares for a contribution equal to the nominal value of
               the  Preferred  Shares  per Share as is  necessary  to  achieve a
               situation  in which the price  per Share  paid for the  aggregate
               number  of Shares  (including  the newly  issued  Shares)  by the
               holder  of the  Preferred  Shares is equal to the price per Share
               additionally  issued  multiplied by a fraction,  the numerator of
               which  shall  be the  number  of  Shares  outstanding  after  the
               issuance  of  additional  Shares  (excluding  the  Shares  issued
               pursuant  to this  Article  11.3)  plus the  number of Shares the
               Preferred  Shares would purchase if the investment of such holder
               of the  Preferred  Shares  would  have  been made for a price per
               Share  equal to the price per  Share of the  Shares  additionally
               issued to the new shareholder  and the  denominator  shall be the
               number of Shares  outstanding  before the issuance of  additional
               Shares  and the number of Shares  additionally  issued to the new
               shareholder  (and  excluding the Shares  issued  pursuant to this
               Article  11.3).  Attached  hereto as  Schedule  8 is a  numerical
               example of the weighted average anti-dilution adjustment. Each of
               the Parties hereby  irrevocably agrees to such issue of Preferred
               Shares and to co-operate in all actions and resolutions  required
               for the issuance as contemplated by this Article 11.3.

               11.4 The beneficiaries  of this Article 11 are those parties
               having joined this  Agreement  prior to May 1, 2000. Article 12.
               Registration Right.

               12.At the request of 51% (fifty-one percent) of the Shares, such
               request  to be  made  with  the  support  of  the  Board  and  an
               internationally  recognized  underwriter,  and for an anticipated
               offering  price to the  public  exceeding  EUR  100,000,000  (one
               hundred million Euros), the Company will apply for all or part of
               the  Shares  (the Registration  Shares)  to  be  listed  on an
               internationally  recognized  stock  exchange  or  internationally
               recognized automated stock quotation system in the European Union
               or the United  States of America (the  IP).  Prior to the IPO,
               all Preferred  Shares shall be converted into Common  Shares.  At
               the IPO, this Agreement shall no longer remain in effect, but the
               Stock  Option  Plan (as  attached  hereto as  Schedule 4) remains
               valid.

               12.2If,  at any time, the Company proposes to register any shares
               in the  Company  for public  sale for its own  account or for the
               account  of  any   shareholder,   the  Company   shall  give  the
               Shareholders notice of such proposed registration statement. Upon
               the written request of the Shareholders  delivered to the Company
               within 30 business  days after the receipt of the notice from the
               Company,  which  request  shall  state the number of shares  (the
               (Incidental  Shares)  that  the  Shareholders  wish  to  sell or
               distribute publicly under the registration  statement proposed to
               be filed by the Company,  the Company  shall use its best efforts
               to  register   such   Incidental   Shares,   and  to  cause  such
               registration  to become and remain  effective  for as long as the
               Company  keeps  such  registration  effective  as to  such  other
               shares.  The Shareholders  shall be entitled to deliver a request
               to register the Incidental  Shares to the Company with respect to
               every  proposed  registration  of  shares  by  the  Company.  The
               Company's managing  underwriter shall have the right to limit, in
               whole or in part, the total number of the Incidental Shares to be
               registered,  so long as such  limitation is applied on a pro rata
               basis with respect to all other  shares  proposed or requested to
               be registered by other Shareholders.

               12.3The  Company shall pay all of the expenses in connection with
               the registration of the Registration Shares or Incidental Shares,
               including the costs of reorganization of the Company if required,
               preparing,  printing  and  filing  a  registration  statement  in
               compliance with any applicable  securities  laws,  qualifying the
               offering  under  such  securities  laws  pursuant  to  which  the
               offering is required to be  qualified,  accounting  and  auditing
               expenses  and  reasonable  fees and  expenses  of counsel to each
               Investor  provided,  however,  that  the  Company  shall  not  be
               required to pay underwriting discounts and commissions applicable
               to the Registration Shares and the Incidental Shares.

               12.4The  Company shall provide each  Shareholder  with  customary
               indemnification  in connection with any sale by such  Shareholder
               of shares in a public offering pursuant to this Article 12.

               Article 13. Drag-along Right

               13.1At  the  request  of the  holders of at least 51 % (fifty one
               percent) of the voting rights in the Company and until an IPO has
               been effected,  each of the Shareholders shall be obliged to sell
               and transfer all of their shareholding(s) in the Company for such
               price per share, and on such other terms as are customary, as may
               be agreed between the  Shareholders  and any reasonable bona fide
               third party,  who is prepared to buy all of the shares  available
               for sale.

               13.2In  the  event  of such a  request,  the  Shareholders  shall
               irrevocably  appoint  a  person  (the  Negotiator)  who will be
               authorized  to negotiate  the  conditions  of sale with the third
               party.  Subject to the  conditions of the preceding  subparagraph
               13.1,   the   Negotiator   will  be  deemed   authorized  by  all
               Shareholders  to negotiate all  conditions  with the  prospective
               buyer and conclude  the contract  with such third party on behalf
               of all Shareholders.

               Article 14. Tag-along Right

               In the event a  Shareholder  wishes to sell any of its  shares in
               the Company to a bona fide third party, such Shareholder shall be
               obliged  to give the other  Shareholders  at least 30 days  prior
               written  notice of his  intention  to sell.  In such an event the
               other   Shareholder(s)   shall   have  the  right  (but  not  the
               obligation) to demand from the selling  Shareholder(s)  within 15
               days  of  receipt  of  such  notice  that  the  relevant  selling
               Shareholder   also   sells   the   shares   held  by  the   other
               Shareholder(s)  at the same  price per  share  and on such  other
               terms as are agreed  between  that  selling  Shareholder  and the
               third party. This clause becomes null and void at an IPO or after
               5 (five) years after Completion.

               Article 15. Redemption Right

               15.1 In the event that the Company has not  conducted  an IPO (or
               been  purchased) 5 (five) years after  Completion,  any holder of
               Preferred Shares  participating in this round of financing shall,
               at its option,  have its shares redeemed by the Company,  for the
               greater of (i) the  original  purchase  price  (subject  to price
               adjustment) plus 8% (eight percent) interest  compounded annually
               plus any accrued and unpaid dividends whether or not declared, or
               (ii) the fair  market  value of the shares on an as if  converted
               into Common  Shares basis plus any accrued and unpaid  dividends.
               Such amounts may be paid in 4 (four) equal quarterly payments, to
               the extent permitted under Netherlands law.

               15.2 For a period  of 3  (three)  years  commencing  on the fifth
               anniversary  of the Completion  Date, no redemption  right may be
               exercised to the extent such exercise of  redemption  right would
               result in the Company having less than 35% (thirty-five  percent)
               of its balance  sheet value as at the close of the  previous  tax
               year.
               Article 16. Limitation on Shareholding

               Notwithstanding  anything  provided for in this Agreement  and/or
               the  Articles,  the  Shareholders  agree that  neither any of the
               Shareholders  nor any of the group of Shareholders  (the Chemical
               Shareholder,  the  Pharmaceutical  Shareholders,  the Informatics
               Shareholder,   the  University   Shareholders  or  the  Financial
               Shareholders)  shall  be  allowed  to have a direct  or  indirect
               interest in the  Company of more than 40% (forty  percent) of the
               voting  rights and that the  Industry  Shareholders  shall not be
               allowed to have a direct or  indirect  interest in the Company of
               more than 49% (forty-nine percent).

               Article 17. Dividends

               The  Parties   agree  that  the   Company   shall  not  make  any
               distributions to the Shareholders  from profits or reserves until
               the net profits after tax exceed the total  capital  expenditures
               and  research  and  development  needs at the minimum  level,  as
               contained in the high growth financial plan in the Business Plan,
               for a period of 5 (five)  years after the date of this  Agreement
               and  if  and  when  such   distributions   are  approved  by  the
               Supervisory Board.

               Article 18. Reportin

               The Board of Managing Directors shall:

               (a) keep  books of account  and  therein  make true and  complete
               entries of all its dealings and  transactions  of and in relation
               to the Business  (such books of account and all other records and
               documents  relating to the business  affairs of the Company shall
               be open to inspection by each of the  Shareholders  during normal
               business hours and on 2 (two) working days prior notice;

               (b) provide  each member of the Board  within 15  (fifteen)  days
               from the end of each calendar month with management  accounts for
               such  month  in a  form  acceptable  to  the  Shareholders  (such
               accounts to include a balance sheet, a profit and loss account of
               the prior month and an estimate for the coming month);

               (c) provide each Shareholder within 30 (thirty) days from the end
               of each quarter with a management report;

               (d) provide each  Shareholder  as soon as the same are  available
               (and in any event  within 3 (three)  months after the end of each
               financing  year) with the audited annual  accounts of the Company
               for  that  financial  year,  each  such  audited  accounts  to be
               accompanied by an unqualified  declaration  (verklarin) of the
               external  auditor as meant in article 2:393(5) of the Netherlands
               Civil Code, or in the case of any future subsidiaries established
               outside the Netherlands,  a comparable unqualified declaration of
               an external  auditor in the  respective  jurisdictions  where any
               such subsidiary is established;

               (e) each year prepare an annual business plan and budget no later
               than 75  (seventy  five)  days  prior  to the  beginning  of each
               financial year;

               (f) keep each Shareholder  fully informed as to all its financial
               and  business  affairs  and  in  particular  shall  provide  each
               Shareholder  with  full  details  of any  actual  or  prospective
               material  change  in such  affairs  as soon as such  details  are
               available; and

               (g) provide each Shareholder within 2 (two) weeks of receipt with
               copies of all reports and documents drawn up or designated by the
               auditor, including in any case the management letter.

               Article 19. Representations and Warranties

               Each of the Parties  hereto  represents and warrants to the other
               Parties that:

               (a)  each  Party  is a  company,  and in the  case of each of the
               University  Shareholders it is a university under the laws of the
               Netherlands,  duly organized and validly  existing under the laws
               of its incorporation,  and has all requisite  corporate power and
               authority  to own its property and to conduct its business in the
               manner presently conducted;

               (b) each  Party  has  full  power  and  authority  (corporate  or
               otherwise)  to enter  into,  execute,  deliver  and carry out the
               terms of this Agreement and to incur the obligations provided for
               herein,  all of which have been duly authorized by all proper and
               necessary  corporate  action  and  are  not in  violation  of its
               articles of association or governing documents;

               (c)  except  as  specifically  set  forth in this  Agreement,  no
               consent, authorization or approval of, filing with, notice to, or
               exemption by, any person or any governmental  instrumentality  is
               required  to  authorize  or is required  in  connection  with the
               execution,  delivery and  performance  of this  Agreement,  or is
               required as a condition to the validity or enforceability of this
               Agreement;

               (d)  this   Agreement  is  its  legal  and  binding   obligation,
               enforceable  in  accordance  with  its  terms,   except  as  such
               enforceability   may  be   limited  by   applicable   bankruptcy,
               insolvency,  reorganization  or other similar laws  affecting the
               enforcement  of  creditors   rights   generally  or  by  general
               principles of equity;

               (e) the execution, delivery and carrying out by each Party of the
               terms of this  Agreement  will not  constitute  a default  under,
               conflict  with, or require any consent under (other than consents
               which have been  obtained),  any mortgage,  indenture,  contract,
               agreement, judgment, decree or order to which it is a party or by
               which it or its assets is bound,  which  defaults,  conflicts and
               consents,  if not obtained,  would have a material adverse effect
               on the rights or  obligations  of any of the  Parties  under this
               Agreement,  or  the  ability  of it to  perform  its  obligations
               hereunder; and

               (f)  there  is no  litigation  pending  or,  to the  best  of its
               knowledge,  threatened  to which  any  Party is a party and which
               affects  the rights and  obligations  of the  Parties  under this
               Agreement.

               Article 20. Confidentiality

               Each of the Parties  agrees to keep secret and  confidential  and
               not to use,  disclose  or divulge to any third party or to enable
               or cause any person to become aware of (except for the purpose of
               the Companys business) any confidential  information relating to
               the Company  including but not limited to  intellectual  property
               (whether  owned or licensed by the Company),  lists of customers,
               reports,  notes,  memoranda  and all  other  documentary  records
               pertaining  to the Company,  or its business  affairs,  finances,
               suppliers,  customers or  contractual or other  arrangements  but
               excluding  any   information   which  is  in  the  public  domain
               (otherwise than through the wrongful disclosure of any party, and
               any of their  successors  and  predecessors)  or  which  they are
               required  to  disclose  by law or by the rules of any  regulatory
               body to which the relevant party is subject.

               Article 21. Companys Auditors The Shareholders agree to exercise
               their  voting  right in such a manner as is  necessary  to ensure
               that  one  of  the  (presently   five)  leading   internationally
               recognized  audit firms shall be and  continue to be appointed as
               auditors of the Company.  Article 22.  Shareholders  and Customer
               Treatment

               Attached  hereto  as  Schedule  6 are the in  principle  terms of
               business, pursuant to which the individual Shareholders may place
               R&D orders  with the  Company.  Furthermore,  attached  hereto as
               Schedule 7 are the in principle  terms of sale and  purchase,  on
               which individual Shareholders may purchase equipment and software
               from the Company.

               Article 23. Notices

               Any notices given in connection  with this  Agreement  must be in
               writing  and  may be  given  by fax  and  registered  mail to the
               following  addresses or, in respect of any of such addresses,  to
               such  other  address  as the  recipient  may  notify to the other
               Parties for such purpose:

the Company:                          Avantium B.V.
                                     (to be renamed Avantium International B.V.)
                                      Attn: Dr. Ian E. Maxwell

Siriusdreef 17-27,
                                            2132 WT  Hoofddorp
                                            The Netherlands
                                            Tel: +31 23 568 9213
                                            Fax: +31 23 568 9111

Shell:                                      B.V. Licht en Kracht Maatschappij
                                            C/o Maarten Geuze

Badhuisweg 3
                                            1031 CM  Amsterdam
                                            The Netherlands

Tel: +31 20 630 3883
                                            Fax: +31 20

SmithKline:                         SmithKline Beecham Pharmaceuticals
                                            Attn. Peter L. Thurlby
                                            New Frontiers Science Park (North)
                                            Third Avenue
                                            Harlow
                                            Essex CM19 5AW
                                            United Kingdom
                                            Tel: +44 1279 622393

Fax: +44 1279 622749
SRO:                                        S.R. One, Ltd.
                                            Attn. Elaine V. Jones, Ph.D
                                            200 Barr Harbor Drive, Suite 250
                                            Four Tower Bridge
                                            West Conshohocken,
                                            PA 19428-2977
                                            United States of America
                                            Tel: +1 610 567 1019
                                            Fax: +1 610 567 1039

GSE:                                        GSE Systems, Inc.

Attn. Mr. Brian K. Southern
                                            9189 Red Branch Road
                                            Columbia
                                            Maryland 21045
                                            United States of America
                                            Tel: +1 410 772 3588
                                            Fax: +1 410 772 3599

Delft:                                      Delft University of Technology
                                            Attn. J. Krul L.L.M.
                                            Postbus 5
                                            2600 AA  Delft
                                            The Netherlands

Tel: +31 15 278 2964
                                            Fax: +31 15 278 7749

Twente:                                     University of Twente

Attn. Prof. D.N. Reinhoudt
                                            Drienerlaan 5
                                            7522 NB  Enschede
                                            The Netherlands
                                            Tel: +31 53 489 2714
                                            Fax: +31 53 489 2575

Eindhoven:                        Technische Universiteit Eindhoven Holding B.V.
                                            Attn: Drs. B.P. Hiddinga
                                            Den Dolech 2
                                            HG 0.02
                                            Postbus 513
                                            5600 MB  Eindhoven
                                            The Netherlands
 Tel: +31 40 247 4949                       Fax: +31 40 246 7097
enerics:

                                         The Generics Group Limited

Attn. Chris Coggill
                                            Harston Mill
                                            Harston
                                            Cambridge CB2 5NH
                                            United Kingdom
                                            Tel: +44 122 387 5200

Fax: +44 122 387 7201

Alpinvest:                                  Alpinvest Holding NV

Attn. J.J. de Swart
                                            Gooimeer 3
                                            Postbus 5973
                                            1410 AB  Naarden-Vesting
                                            The Netherlands
                                            Tel: +31 35 695 2600
                                            Fax: +31 35 694 7425

               Article 24. Expenses

               24.1 The  Parties  agree  that each  shall bear its own costs and
               expenses with respect to the  transactions  contemplated  by this
               Agreement,   provided,  however,  that  if  Completion  has  been
               effected, the Company shall pay within 30 (thirty) days after the
               Completion Date the reasonable out-of-pocket costs of: (i) patent
               research  carried out by Generics;  (ii) market research  carried
               out  by   PricewaterhouseCoopers;   (iii)  in  kind  contribution
               research carried out by PricewaterhouseCoopers and Generics; (iv)
               incorporation of the Company carried out by the Incorporator; and
               (v)  start-up   expenditures  of  the  Company  financed  by  the
               Incorporator   as  of  January  1,  2000,   as  incurred  by  the
               Incorporator up to and including the Completion Date. The Company
               shall also bear the fees and  expenses of its  advisors,  Caron &
               Stevens / Baker & McKenzie and KPMG Corporate Finance N.V.

               24.2 The Company shall reimburse the directors of the Supervisory
               Board for reasonable  travel expenses (not including  first-class
               travel).

               Article 25.  Governing Law and  Jurisdiction  25.1This  Agreement
               shall be governed by and construed in accordance with the laws of
               the Netherlands.

               25.2The  competent courts of Amsterdam,  The  Netherlands,  shall
               have exclusive jurisdiction over any dispute arising out of or in
               connection with this Agreement.

               Article 26. Counterparts

               This  Agreement  may be  executed  in two  or  more  counterparts
               (whether original or facsimile counterparts),  each of which upon
               due  execution  shall be deemed an original  and part of the same
               document.

               Article 27. General Provisions

               27.1This  Agreement and its annexes set out the entire  agreement
               and understanding between the Parties with respect to the subject
               matter of this Agreement and  supersedes  all prior  discussions,
               agreements,  including, but not limited to, the agreements on the
               term sheet and understandings of every and any nature between the
               Parties.

               27.2Amendments to this Agreement must be made in writing in order
               to be effective and be signed by all Parties to this Agreement.

               27.3In the event of any discrepancies or  contradictions  between
               this Agreement and the Articles,  this Agreement shall prevail to
               the extent permitted under the laws of the Netherlands.

               27.4Should any provision of this Agreement be or become partly or
               entirely  invalid,  this shall not affect the  validity of any of
               the remaining provisions.

               IN WITNESS  WHEREOF,  this Agreement has been signed and executed
               by the Parties hereto in Amsterdam,  The  Netherlands on February
               24, 2000.

___________________________

Avantium B.V.
(to be renamed Avantium International B.V.)
By: [               ]

___________________________                      ___________________________

B.V. Licht en Kracht Maatschappij           B.V. Licht en Kracht Maatschappij
By: [               ]                        By: [               ]

___________________________
SmithKline Beecham Plc.
By: [               ]

___________________________
S.R. One, Limited
By: Mrs. Elaine V. Jones

___________________________

GSE Systems, Inc.
By: Mr. Brian K. Southern

___________________________

Delft University of Technology
By: [               ]

__________________________

University of Twente
By: [               ]

___________________________

Eindhoven University of Technology
By: [               ]

___________________________

The Generics Group Limited
By: [               ]

___________________________

Alpinvest Holding NV
By: [               ]

                                                                    Exhibit 10.7

                                GSE SYSTEMS, INC.
                                 AVANTIUM B. V.
                                SOFTWARE LICENSE
                       AND INTELLECTUAL PROPERTY AGREEMENT

This Software License and Intellectual  Property Agreement  (Agreement) together
with all Exhibits, sets forth all terms and conditions by and between,  Avantium
B.V.  (Avantium) a Dutch  company,  and GSE Systems,  Inc.,  (GSE) a corporation
organized  under  the  laws  of  Delaware  in the  U.S.,  (parties),  is for the
licensing of GSE's proprietary  software,  new developments and versions thereof
(including the object and source codes  thereof),  which may be developed by GSE
during the term of this  Agreement,  intellectual  property  and the  underlying
intellectual  property rights (GSE Products),  listed and described in Exhibit A
hereto,  to Avantium for its internal use and for research and development (R&D)
on the GSE  Products by Avantium and the  creation of new,  derivative  products
(New Software Products) and the use and exploitation thereof by Avantium .

WHEREAS, GSE desires to own an equity interest in Avantium; and,

WHEREAS,  Avantium  desires  to be  granted  a  license  with  regard to the GSE
Products for its own use and to use for R&D so that the GSE Products  become the
basis for New Software Products; and

WHEREAS,  GSE will license the GSE Products in Exhibit A to Avantium in exchange
for which Avantium shall convey an equity interest in Avantium to GSE; and,

WHEREAS,  any and all New  Software  Products  derived  from or  arising  out of
Avantiu's R&D on the GSE Products  shall be the joint  intellectual  property of
Avantium  and GSE, and GSE will have rights to market,  distribute  and sell the
New Software Products for which GSE shall pay Avantium royalties at a rate(s) to
be determined; and,

WHEREAS,  Avantium desires to have GSE provide certain  resources for use in the
development  and creation of New  Software  Products for the benefit of Avantium
and GSE.

NOW THEREFORE,  in  consideration of the mutual covenants and promises set forth
herein and other good and valuable consideration, the receipt of which is hereby
acknowledged,  the parties agree as follows and enter into this Agreement on the
day and year entered below.

               1. License and Consideration

               1.1 GSE License to  Avantium.  GSE hereby  grants to Avantium and
               its  subsidiaries  and  Avantium  hereby  accepts  from  GSE  the
               following:  (i) a  non-transferable,  exclusive,  irrevocable and
               perpetual  license in accordance with, and subject to, all of the
               provisions  of  this  Agreement   throughout  the  term  of  this
               Agreement  to use the  source  code of the GSE  Products;  (ii) a
               non-transferable,   non-exclusive,   irrevocable   and  perpetual
               license in accordance with, and subject to, all of the provisions
               of this  Agreement  throughout  the term of this Agreement to use
               the  object  code  of the GSE  Products;  for  the  research  and
               development  (R&D)  of  a  HSE&S  informatics  system  and  the
               development of New Software Products;

               Promptly after the Effective date GSE shall transfer and disclose
               to Avantium:  the object code(s),  the source codes and all other
               relevant information, data and documentation of the GSE Products.
               Neither  Avantium,  nor any shareholder,  shall have the right to
               sell,  license or  distribute  either the GSE Products or the New
               Software Products, unless this Agreement provides otherwise.

               In the event any Avantium  shareholders  desire to license any of
               the GSE  Products  or New  Software  Products,  the terms of such
               licensing shall be separately agreed between such shareholder and
               GSE or Avantium.

               2. Remedies in case of Breach, bankruptcy or Liquidation 2.1 This
               agreement,  the license and rights  granted  hereunder,  shall be
               irrevocable  and perpetual  following the Effective  Date hereof,
               subject to the provisions of this Agreement.

               2.2 In the  event of a  material  breach of this  Agreement  by a
               party, which breach has not been cured to the satisfaction of the
               non-breaching  party within a period of sixty (60) days after the
               breaching  party has been  requested by written  notice to do so,
               the non breaching party can only invoke the following remedies (A
               or B):

               A. the  non-breaching  party can seek injunctive  relief to force
               the breaching  party to cease and desist its breach  immediately;
               or

               B. (i) Avantium shall only have the right to use the object codes
               of the GSE  Products  in  order  to  exploit  the  developed  New
               Software  Products at its own  discretion  against the payment of
               one time (lump sum) fee of US$ 965,000.= to GSE;

               (ii) Avantium  shall return  immediately  the source codes of the
               GSE  Products  to GSE and delete or destroy  all copies  thereof;
               (iii) GSE and  Avantium  will grant  each other the  irrevocable,
               perpetual  and  royalty  free right to exploit  the New  Software
               Products (together with the related object- and sources codes) at
               their  own  discretion;   (iv)  GSE  shall  assign  and  transfer
               immediately  all its  preferred  and common shares in Avantium to
               Avantium;  (v) Avantium shall pay to GSE the  difference  between
               the  value  of these  shares  at the  moment  these  shares  were
               conveyed  to GSE and the fair  market  value of the shares at the
               moment of the aforementioned  assignment and transfer, which fair
               market  value  will  be  determined   in   accordance   with  the
               Subscription  and  Shareholders  Agreement,   provided  and  when
               sufficient capital is available;  (vi) all payments due and owing
               either party shall be made immediately; (vii) for a period of one
               year,  but no longer  than one year,  after  termination  of this
               Agreement,  unless GSE waives such time,  Avantium shall offer to
               GSE any improved new, updated,  upgraded,  revised,  reformatted,
               modified,   similar  or  renamed  version  of  the  New  Software
               Products,  pursuant to Section  10.3.;  which remedies (i through
               vii)  can  only  be  invoked  together,  and  not  separately  or
               individually.

               2.3 In the event:  - an order is made or resolution is passed for
               the  winding-up of GSE, or a provisional  liquidator is appointed
               in respect of GSE, or an administration  order is made in respect
               of  GSE,  a  receiver   (which   expression   shall   include  an
               administrative receiver) is appointed in respect of GSE or all or
               any of its assets,  and is not  discharged  within a period of 30
               days or any voluntary  arrangement is proposed in respect of GSE;
               or, - GSE  ceases  to exist or to carry on (i) the  business  for
               which it was created or  incorporated  or (ii) the business which
               is essential for the purpose of this Agreement; Avantium can only
               invoke the following remedies, which remedies only can be invoked
               together,  and  not  separately  or  individually:  (i)  all  the
               provisions of the Agreement  shall  terminate  immediately,  with
               exception of the granted non-transferable,  exclusive, perpetual,
               irrevocable  and  perpetual  license to  Avantium as set forth in
               Section  1.1;  (ii)  Avantium  shall  be  granted  an  exclusive,
               perpetual, irrevocable, royalty free license and right to use and
               to  exploit  the  developed  New  Software  Products  at its  own
               discretion;  (iii) all  payments due and owing either party shall
               be made immediately.

               2.4 In the event:  - an order is made or resolution is passed for
               the  winding-up  of  Avantium,  or a  provisional  liquidator  is
               appointed in respect of Avantium,  or an administration  order is
               made in respect of Avantium,  a receiver (which  expression shall
               include an  administrative  receiver)  is appointed in respect of
               Avantium,  all or any of its assets, and is not discharged within
               a period of 30 days or any voluntary  arrangement  is proposed in
               respect of Avantium;  or, - Avantium  ceases to exist or to carry
               on (i) the business for which it was created or  incorporated  or
               (ii) the  business  which is  essential  for the  purpose of this
               Agreement;  - GSE can only invoke the following  remedies,  which
               remedies  only can be invoked  together,  and not  separately  or
               individually:  (i)  all the  provisions  of the  Agreement  shall
               terminate  immediately;  (ii) GSE shall be granted an  exclusive,
               perpetual, irrevocable, royalty free license and right to use and
               to  exploit  the  developed  New  Software  Products  at its  own
               discretion;  (iii) all  payments due and owing either party shall
               be made immediately.

               2.5 The above  remedies are the sole remedies of parties and each
               party hereby waives all its rights to terminate  this  Agreement,
               including its right to terminate under statutory law,  article 6:
               265 Burgerlijk Wetboek (Dutch Civil Code) and its right to invoke
               the obligation to undo and its right to compensation  for damage,
               other than explicitly set forth in this Agreement.

               3. Ownership of New Software Products and Intellectual  Property.

               3.1 New Software  Products.  The following are definitions of the
               various forms of New Software Products:

               3.1.1 HSE&S Modules (HSE  Module),  The newly  developed  modules
               specifically  developed  for the purpose of  Avantium  that are a
               derivative  of or extension of GSE Products  including the object
               and  source  code  and  all   relevant   information,   data  and
               documentation,  and  compensated  for as described in the Section
               10.1.

               3.1.2  HSE&S  New  Software  Products  (HSE  Product),  The newly
               developed products specifically developed by Avantium and GSE for
               the purpose of Avantium, including the object and source code and
               all relevant information, data and documentation, and compensated
               for as described in the Section 10.1.

               3.2 Underlying Intellectual Property Rights. Without prejudice to
               Sections 3.5 and 3.6, all of the underlying intellectual property
               rights (such as copyrights,  patent rights and trademark  rights)
               contained in or with respect to the New Software  Products  shall
               be co-owned by and be  proprietary  to Avantium and GSE together,
               and Avantium and GSE shall be  acknowledged as the owners of such
               Intellectual  Property  rights.  GSE shall have the right to seek
               patent,  copyright,  trademark  protection or related  notices or
               applications anywhere in the world in respect to its co-ownership
               of the New Software Products and underlying intellectual property
               rights in the joint names of Avantium and GSE. Both parties shall
               cooperate fully and completely and do whatever acts are necessary
               to aid Avantium and GSE in obtaining full and complete protection
               for said proprietary, intellectual property rights in any country
               or  jurisdiction  in the world  that  Avantium  and GSE  mutually
               select.

               3.3  Avantium  and GSE agree that both  parties  will provide the
               necessary  assistance  in obtaining  the  necessary  intellectual
               property  rights  referred to in Section 3.2. GSE shall be solely
               responsible for the filing and the costs of filing,  application,
               registration and maintenance of the intellectual property rights.

               3.4  Product  Displays  and  Notices.   Neither  party  shall  be
               responsible or liable to the other party for damages,  payment or
               otherwise,  if the New Software  Products  become  embedded in or
               co-mingled  with an operating  system  resulting in a loss of the
               display  identifying  information  about the other  party and its
               contribution  to the New Software  Products.  Neither  party will
               remove  any  copyright,  patent  right,  trademark  right  and/or
               confidentiality  notices  from,  or assert any claim of ownership
               to, the New Software Products.

               3.5 The ownership of any information,  data and software, further
               developments  and  versions  thereof  (including  the  underlying
               intellectual property rights) which have been solely developed by
               Avantium  and which do not contain any  confidential  information
               received  from GSE  under  this  Agreement  remain  and  shall be
               exclusively vested in Avantium.

               3.6 The ownership of the GSE Products, any information,  data and
               software,  further  developments and versions thereof  (including
               the  underlying  intellectual  property  rights)  which have been
               solely developed by GSE and which do not contain any confidential
               information  received from Avantium under this  Agreement  remain
               and shall be exclusively vested in GSE.

               4. Relationship of Parties.

               4.1  The  parties  are   signatories   to  a   Subscription   and
               Shareholders'  Agreement dated February 24, 2000, which specifies
               the  respective  rights and  obligations  in regard  thereto.  In
               respect of this  Agreement,  GSE and  Avantium  will each act and
               take  affirmative  steps  to  market  and  promote  each  other's
               products in accordance  with their standard  business  practices.
               Neither party shall misrepresent or make any negative  statements
               about the other,  its  products or services  and each party shall
               indemnify  the other with  respect to such  misrepresentation  or
               negative statement.  Neither party is responsible to any end user
               for the quality or services of the other.

               4.2 Except as  expressly  set forth  herein,  no right,  title or
               interest  in  or  license  to,  any   patents,   trade   secrets,
               copyrights,  other intellectual  property rights or rights to the
               GSE Products or New  Software  Products is granted or conveyed to
               the other party pursuant to this Agreement.

               5. Names and Trademarks.

               Nothing in this Agreement grants to either party the right to use
               or display the trademarks, trade names, logos or service marks of
               the other party,  except as provided  herein.  Avantium agrees to
               submit to GSE for written  approval,  and GSE agrees to submit to
               Avantium for written approval,  any marketing materials which may
               use or display any trademark, trade name, logo or service mark of
               Avantium and GSE respectively.  Each party at its sole discretion
               may  accept or reject  the other  party's  use of such  marketing
               materials. In accordance with this Agreement, each party may make
               general  reference  to the fact the parties  hereto have  entered
               into a cooperative development and business alliance of which GSE
               is a member as a shareholder in Avantium.

               6. Confidentiality.

               6.1  Each  party  acknowledges  that it may  receive  information
               regarding  the GSE Products,  Avantium  products and New Software
               Products from the other party that the providing party regards as
               confidential   and   proprietary.   To  the   extent   that  such
               confidential  information  had been  disclosed  by the  providing
               party to the receiving party in writing marked  Confidential,  or
               orally or  visually  disclosed  and  summarized  in  writing  and
               delivered by the providing  party to the  receiving  party within
               thirty (30) days of such disclosure,  such  information  shall be
               Confidential for the purpose of this Article.

               6.2 Other than as expressly  contemplated  herein,  neither party
               shall disclose,  provide or otherwise make available to any third
               party   (including  a   prospective   client)  any   confidential
               information of the other party except to the extent  necessary to
               exploit its rights granted under this Agreement and provided such
               third  party has agreed to  confidentiality  obligations  no less
               stringent  than those assumed by the receiving  party  hereunder.
               Each  party  agrees  that  it  will   protect  the   confidential
               information  of  the  other  through  the  exercise  of at  least
               reasonable care, and in no event less protection and care than is
               customarily   used  in  safeguarding   its  own  confidential  or
               proprietary information of a similar nature.

               6.3  In  no  event  shall  either  party  use  any   confidential
               information of the other party except to the extent  necessary to
               effect the  provisions  and purposes,  as expressly  contemplated
               under the terms of this Agreement.

               6.4 The  foregoing  shall not  prohibit or limit a party's use of
               information,  including but not limited to ideas, concepts,  know
               how,  techniques and methodologies,  which (a) are or become part
               of the public  domain  through  no breach of the  confidentiality
               provisions of this Agreement;  (b) are rightfully obtained by the
               receiving party from a third party without  restriction;  (c) are
               already and rightfully known to or independently developed by the
               receiving party.

               7. Limited Warranty.

               7.1 GSE  represents and warrants that it is the rightful owner of
               the GSE  Products  and that it is  allowed  to grant  the  rights
               herein to Avantium.

               7.2 In accordance with its standard license provisions,  GSE will
               provide a twelve (12) month  warranty on the GSE  Products.  With
               regard to GSE Products and New  Software  Products,  GSE makes no
               further  warranty,  either express or implied,  including but not
               limited to implied warranties of merchantability or fitness for a
               particular   purpose,   and  all  other   warranties  are  hereby
               disclaimed. Notwithstanding anything contained in this Agreement,
               GSE  makes  no   representation,   warranty,   or  guaranty  that
               Avantium's use of the GSE Products or New Software  Products will
               be uninterrupted or error free.

               7.3  Avantium  provides no warranty,  either  express or implied,
               including   but   not   limited   to   implied    warranties   of
               merchantability  or fitness for a particular  purpose towards GSE
               with regard to any New Software Product, and all other warranties
               are hereby disclaimed. Notwithstanding anything contained in this
               Agreement,   Avantium  makes  no  representation,   warranty,  or
               guaranty  that  GSEs use of the New  Software  Products  will be
               uninterrupted or error free.

               8. Limitation of Liability

               8.1 Except as otherwise  provided in Section 9, GSE's  liability,
               if any, to Avantium for claimed loss or damage,  whether based on
               contract, tort, strict liability or any other legal theory, shall
               be strictly  limited to the payments made by Avantium  under this
               Agreement.

               8.2  Avantium's  liability,  if any, to GSE for  claimed  loss or
               damage, whether based on contract,  tort, strict liability or any
               other legal  theory,  shall be strictly  limited to the  payments
               made by GSE under this Agreement.

               8.3 The  warranties and  commitments  expressly set forth in this
               agreement are in lieu of all other  obligations or liabilities on
               the part of each party for  damages or other  relief,  including,
               without   limitation,    special,   indirect,    incidental,   or
               consequential  damages  that  in any  way  arise  from  or are in
               connection with the use and/or performance of the GSE Products or
               New Software Products.

               9. Intellectual Property Indemnification

               9.1 GSE will  indemnify  Avantium  against any loss or  liability
               awarded by final  judgment of a court of  competent  jurisdiction
               based on a suit that the GSE Products  infringe or misappropriate
               any  patent,  copyright,   trademark,   trade  secret,  or  other
               proprietary right.  Avantium shall promptly notify GSE in writing
               of any such suit or threatened  suit.  Avantium shall provide GSE
               all information and reasonable  assistance for the defense of the
               same.  GSE  shall  have  no  liability  for  any  such  claim  of
               infringement or  misappropriation  to the extent that it is based
               on the use of services and/ or software not specifically supplied
               by GSE, which have been used in combination with a GSE Product or
               New Software  Products.  GSE shall have absolute  discretion with
               respect to the defense  and  settlement  of any such suit,  legal
               proceeding, or claim.

               9.2 In the event a third party claims that a New Software Product
               infringes or misappropriates  any patent,  copyright,  trademark,
               trade  secret,  or  other  proprietary  right,  each  party  will
               promptly  notify the other  party in  writing of any such  claim.
               Each party  will  provide  the other  party all  information  and
               reasonable  assistance for the defense of the same.  Parties will
               decide in mutual  agreement,  how such claim will be dealt  with.
               Each party will bear 50% of all the (legal) costs and  (attorney)
               fees  as well  as the  awarded  claims.  Avantium  shall  have no
               liability for any such costs,  fees and claims of infringement to
               the  extent  that  it is  based  on the use of  services  and/ or
               software added,  used or supplied by GSE, which have been used in
               combination with a New Software Product.

               9.3 If a GSE Product becomes, or if in GSE's sole judgment appear
               might become subject to a third party infringement  claim, GSE in
               its sole  discretion  may: i) procure at no cost to Avantium from
               the third  party the right to allow  Avantium  to continue to use
               the GSE  Product ; ii)  modify or replace at GSE's own costs that
               portion of the GSE Product which is alleged to be infringing.  In
               the event the  foregoing  options are not  reasonably  practical,
               GSE, in its sole judgment, may terminate the license for such GSE
               Product and return to Avantium the license valuation for such GSE
               Products on the Effective Date of this Agreement,  pro rated over
               a 5 (five) year period from such date.

               9.4 If a New  Software  Product  becomes,  or if in both  parties
               judgment   appear   might   become   subject  to  a  third  party
               infringement claim, both parties shall: i) procure from the third
               party the right to allow  Avantium  and GSE to continue  the use,
               distribution and sale of that New Software Product; ii) modify or
               replace  that  portion  of that  New  Software  Product  which is
               alleged to be infringing; or iii) in the event that the foregoing
               options are not reasonably  practical,  cease and desist the use,
               distribution and sale of that New Software Product.

               9.5 The foregoing  states the entire liability of each party with
               respect  to  the   infringement  of  any   copyrights,   patents,
               trademarks, trade secrets, or other proprietary rights pertaining
               to the GSE Products and any New Software Products.

               10.  Development costs and Exclusive  Distributor of New Software
               Products.

               10.1 All costs,  expenditures  (including  costs of third parties
               involved)  with  regard  to  the  development  of a New  Software
               Product by Avantium will be borne by both parties  equally.  Each
               party shall appoint a person(s)  responsible  for determining the
               project development,  including release date, of any proposed New
               Software Product.

               10.2 A New Software Product will be deemed to be developed once a
               full product  acceptance  has been made by both GSE and Avantium.
               During  the  first  two  years  after  the  development  of a New
               Software  Product both  parties  will decide in mutual  agreement
               whether the New  Software  Product will be brought on the market.
               It is expressly  understood by both parties that each party has a
               veto right with regard to the  decision  to bring a New  Software
               Product on the market  during  those  first two years.  After the
               expiration  of  those  two  years  GSE  may  decide  at  its  own
               discretion  whether such New Software  Product will be brought on
               the market,  provided  however  that GSE  accepts  the  exclusive
               distribution license agreement offered by Avantium,  as set forth
               in Section  10.3.  If GSE  refuses  such  exclusive  distribution
               agreement,  Avantium  can decide at its own  discretion  to bring
               such  New  Software  Product  on  the  market  whether  or not by
               appointing a third party or parties as its  distributor(s),  with
               GSE being  entitled  to the same  royalty  as  defined in Section
               10.3.

               10.3 Avantium  hereby grants to GSE the first right of refusal to
               be appointed as the sole and exclusive  distributor  of each such
               New  Software  Product and all  upgraded,  revised,  reformatted,
               modified, similar or renamed version and improvement of each such
               New Software Product for which distribution license GSE shall pay
               to  Avantium  a  royalty  of ten per cent  (10%) of the  revenues
               realized  by  GSE as a  result  of the  distribution  of the  New
               Software  Product,  which royalty shall  increase if the revenues
               exceed a certain  amount,  to be  decided  by both  parties  with
               regard  to  each  distribution   license.   Furthermore  in  such
               distribution   license  agreement  standard  provisions  mutually
               agreeable to GSE and Avantium will be inserted.

               10.4 Avantium  Shareholders  will be entitled to acquire licenses
               of the HSE  Module  and HSE  Products  as  developed  under  this
               Agreement at a preferred status for a term; the duration and cost
               of which shall be determined  at the time by mutual  agreement of
               the  Avantium  Board and GSE,  but not longer than one year after
               completion of each New Software Product.

               11. Marketing and Sales.

               11.1  Avantium  shall  advise GSE of  potential  users of the New
               Software  Product(s)  so that GSE may consider its  marketing and
               sales  activities   accordingly.

               11.2  Avantium  shall  furnish  information  kits  for  marketing
               purposes  which shall  include GSE  overviews,  organization  and
               contact  information,  New Software  Product(s)  description  and
               positioning   information   and  suggested   lead   qualification
               questions.  All of the  information  shall  be  subject  to GSE's
               approval and Avantium shall not distribute any  information  kits
               without  GSE's prior  written  approval.  All costs,  expenditure
               (including  costs of third parties  involved)  with regard to the
               information kits will be borne by both parties equally.

               11.3 The parties  agree to inform  appropriate  personnel in each
               company  about this  Agreement and provide  mutually  agreed upon
               training to personnel  needing same to ensure that such personnel
               are  knowledgeable  about  the  GSE  Products  and  New  Software
               Products and informed of all improvements,  changes, upgrades and
               changes  to the GSE  Products  and  New  Software  Products.  The
               parties shall inform such  personnel that they are subject to the
               confidentiality provisions set forth in Section 6 hereof.

               12. General Provisions.

               12.1 The  parties  agree  that in the  event  of a breach  of the
               provisions   of  the   Sections   on:   Names   and   Trademarks;
               Confidentiality and Non-solicitation, money damages alone may not
               be an adequate remedy; in such event, the aggrieved party may, in
               addition to such other  equitable  and legal  relief which may be
               available,  seek the  entry of  injunctive  relief  by a court of
               competent jurisdiction.

               12.2 To the extent that GSE Products  and New  Software  Products
               are  subject  to  the  U.S.  Export  Administration  Regulations,
               Avantium will comply with such regulations. To assist Avantium in
               such  compliance,  GSE shall promptly  advise Avantium in writing
               the  Export  Control  Classification  Number  (ECCN)  of all  GSE
               Products and New Products.

               12.3 For the term of this  Agreement  and for one (1) year  after
               its  termination,  neither party will,  without the other's prior
               written consent,  knowingly employ or independently  contract for
               Agreement related services of any employee from either party

               12.4  This  Agreement  shall  be  governed  by and  construed  in
               accordance with the laws of The Netherlands without giving effect
               to any  conflict  of laws  principles.  The  competent  courts of
               Amsterdam, the Netherlands shall have exclusive jurisdiction over
               any dispute  arising out of or in connection with this Agreement.
               .
               12.5 This Agreement  constitutes the entire agreement between the
               parties  with  respect to the matters set forth  herein and shall
               supersede   all   prior    endorsements,    representations   and
               understanding pertaining thereto.

               12.6 This Agreement may not be modified, except in writing signed
               by both parties.  If any of the  provisions of this Agreement are
               held invalid,  such  provisions  shall be deemed  severed and the
               remaining provisions shall remain in full force and effect.

               12.7 This Agreement may not be assigned or  transferred,  nor may
               rights or  obligations  be  delegated,  without the prior written
               Agreement of the parties.  Notwithstanding  the  foregoing,  this
               Agreement  shall be binding  upon and inure to the benefit of the
               parties to this Agreement, as well as their respective successors
               and assigns.

               12.8  Failure  of  any  party  to  enforce  in any  one  of  more
               instances, any of the terms or conditions of this Agreement shall
               not be  construed  as a waiver of the future  performance  of any
               such terms or conditions
 .
               12.9 This  Agreement  shall  come into force on the date on which
               the  Subscription  and  Shareholders  Agreement  comes  into full
               force,  all conditions  precedent having been met (the Effective
               Date).

               12.10 Any notices given in connection with this Agreement must be
               in  writing  and may be given by fax and  registered  mail to the
               following  addresses or, in respect of any of such addresses,  to
               such other address as the recipient may notify to the other Party
               for such purpose:

              the Company: Avantium B.V.
                                    Attn: Dr. I.E. Maxwell
                                    Siriusdreef 17-27
                                    2132 WT  Hoofddorp
                                    The Netherlands
                                    Tel: +31 23 568 9213
                                    Fax: +31 23 568 9111

              GSE:                  GSE Systems, Inc.
                                    Attn: Brian K. Southern
                                    9189 Red Branch Road,
                                    Columbia
                                    Maryland 21045
                                    USA
                                    Tel: +1 410 772 3588
 ....................................Fax: +1 410 772 3599

IN WITNESS  WHEREOF,  the parties  agree to and accept the terms herein and have
caused this Agreement to be signed by their authorized representatives as of the
Effective Date.

GSE SYSTEMS, INC.                   AVANTIUM B. V.

Brian K. Southern                           Dr. Ian Maxwell
Name (typed or printed)                     Name (typed or printed)

______________________________      _______________________________
Signature                                            Signature

Senior Vice President                                CEO
Title                                                Title

February 24, 2000                           February 24, 2000
Date                                                 Date

9189 Red Branch Road                                 Siriusdreef 17-27
Columbia, Maryland 21045                    2132 WT  Hoofddorp
USA                                                  The Netherlands
Address                                     Address

EXHIBIT A

GSE PRODUCTS

A.       BatchCAD Version 7.0 or later
B.       BatchWizard Version 1.0 or later
C.       VPbatch Version 1.3 or later
D.       SimSuite Pro Version 3.0 or later
E.       TotalVision Version 1.1 or later

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00006-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00006-of-00352.parquet"}]]