Document:

exv10w50

 

Exhibit 10.50

EMPLOYMENT AGREEMENT

     THIS EMPLOYMENT AGREEMENT (“Employment Agreement”) is effective January
1, 2004, (the Effective Date) by and between ENTREMED, INC., a Delaware
corporation having its principal office at 9640 Medical Center Drive,
Rockville, MD 20850 (the “Company”) and Mr. Neil J. Campbell, an individual
residing at 25242 Conrad Court, Damascus, MD 20872 (“Mr. Campbell”).

     WHEREAS, Mr. Campbell has previously entered into an employment
agreement with the Company (referenced therein and herein as “Agreement”)
that is dated April 30, 2003, for the annual period beginning January 1,
2003, (copy attached as Exhibit 1); and

     WHEREAS, such Agreement expired by its terms on December 31,2003, and
under such Agreement and under an earlier agreement, now also expired, and
pursuant to a letter dated December 30, 2003, to Mr. Campbell from Michael
Tarnow (“December 30, 2003, Letter,” copy attached as Exhibit 2), Mr.
Campbell has served as the Company’s president, Chief Operating officer and
principal executive officer since October 15, 2002; and

     WHEREAS, the Company delivered a draft of this Employment Agreement to
Mr. Campbell on or about December 17, 2003; and

     WHEREAS, the Company has engaged an executive recruiter in order to
conduct a search for a suitable Chief Executive Officer and will consider
Mr. Campbell as a candidate for such position; and

     WHEREAS, Mr. Campbell and the Company mutually desire to enter into this
new Employment Agreement in order to allow sufficient time for such executive
recruiter to complete such search;

     NOW THEREFORE, for and in consideration of the mutual premises,
agreements and covenants contained herein, the parties hereto, intending to
be legally bound, do hereby agree as follows:

1. Employment Position and Duties

     The Company hereby agrees to employ Mr. Campbell during the Term hereof
(as set forth in Paragraph 4 herein) to act as, to exercise all of the powers
and functions of, to perform such acts and duties and generally to furnish
such services to the Company and its subsidiaries (if any) as is customary
for a senior management person with a similar position in like companies; and
he shall have such specific powers, duties and serve as President and Chief
Operating Officer or such other executive positions as determined by the
Board of Directors and shall perform responsibilities commensurate with those
executive positions as the Board of Directors of the Company (the “Board”)
shall from time to time reasonably prescribe, provided that such duties are
consistent with Mr. Campbell’s senior management position. Mr. Campbell
hereby agrees to accept such employment and shall perform and discharge
faithfully, diligently, and to the best of his abilities such duties and
responsibilities and shall devote sufficient working time and efforts to the
business and affairs of the Company and its subsidiaries; provided however,
that, to the extent consistent with the needs of the Company,

	 	 	 
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Mr. Campbell shall be entitled to expend a reasonable amount of time on civic,
public, industry, and philanthropic activities and on the management of his
own investments and assets. This new Employment Agreement replaces the now
expired Agreement between Mr. Campbell and the Company that is dated April 30,
2003, (attached as Exhibit 1) and the December 30, 2003, Letter (attached as
Exhibit 2). EntreMed and Mr. Campbell agree that notwithstanding the
expiration of the Agreement that is dated April 30, 2003, in their dealings
and responsibilities toward each other during the period between the
expiration of that Agreement on December 31, 2003, and the execution of this
Employment Agreement, they have been governed by Sections 6, 7,
9 and 11 of
that expired Agreement.

2. Place of Employment

     During his employment hereunder, Mr. Campbell’s principal place of
employment shall be located at the Company’s corporate headquarters at 9640
Medical Center Drive, Rockville, Maryland, unless such headquarters are
relocated during the Term of this Employment Agreement, subject to routine and
customary business travel.

3. Compensation

	(a)	 	Base Salary Effective January 1, 2004, and unless
this Employment Agreement is terminated earlier as set forth herein,
the Company shall pay to Mr. Campbell semi-monthly during the Term,
the semi-monthly portion of a base salary (i.e., 1/24 of a base
salary “Base Salary”) which when annualized equals three hundred
thirty thousand dollars ($330,000), payable in accordance with the
Company’s customary payroll policy for its executives, and subject
to applicable tax and payroll deductions.
	 
	(b)	 	Incentive Compensation Mr. Campbell’s Incentive
Compensation, if any, shall be determined annually by the Company’s
Board of Directors. The Company acknowledges that Mr. Campbell has
been awarded a cash performance bonus of $85,000 reflecting his
performance and contributions to the Company’s performance in 2003,
and such bonus will be paid to him during the month of February 2004
at such time as the 2003 bonus is payable to all Company employees.
	 
	(c)	 	Vesting of Options All unvested options granted to Mr.
Campbell prior to December 31, 2003, and those granted in 2004
during the Term of this Employment Agreement will vest immediately
upon notification by the EntreMed Board of Directors to Mr. Campbell
pursuant to Paragraph 4 that he has not been selected as the new
Chief Executive Officer following the search for such position
currently being conducted by the Company’s Board of Directors. Such
vesting will occur pursuant to the terms of this Employment
Agreement rather than the terms of the grants under which such stock
options were granted. However, in the event Mr. Campbell is selected
as the new Chief Executive Officer, all unvested options will
continue to vest pursuant to the terms of the grants under which
such stock options were granted.
	 
	(d)	 	Certain Other Benefits, Including Paid Time Off, 401(k)
Payments and Vesting of Options During the Term of this
Agreement, Mr. Campbell shall

	 	 	 	 	 
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	 	 	be entitled to participate equally in any and all employee
benefit plans and arrangements which are available to senior
executive officers of the Company, including without
limitation, group medical and life insurance plans. Except for
Paid Time Off which may be earned in 2004, Mr. Campbell is
entitled to use or to the payment for only five (5) days of
paid time off that was earned but not used in 2003. The Company
acknowledges that pursuant to the terms of its 401(k) Plan, all
matching contributions to such Plan on behalf of Mr. Campbell
will vest immediately. Any options granted to Mr. Campbell in
2004 will be vested in accordance with the provisions of
Paragraph 3(c) above. No other benefits, payments, options or
other emoluments associated with employment are due, owed or
provided to Mr. Campbell except those that are provided for in
this Employment Agreement.

4. Term

     Subject to this Employment Agreement being terminated earlier as set forth
herein, the term of Mr. Campbell’s employment with the Company shall be for up
to a four (4) month period commencing January 1, 2004, and continuing through
April 30, 2004, (the “Term”). Mr, Campbell understands that the Company is
currently undertaking a search for a Chief Executive Officer, with Mr.
Campbell being one of the candidates for that position. Such search is expected
to be completed on or before April 30, 2004. In the event Mr. Campbell is
notified, in writing, that he has not been selected for that position, Mr.
Campbell’s employment with the Company shall terminate thirty (30) days from
the date of such notification, and such termination shall be deemed a
termination without cause under Paragraph 8(d) of this Employment Agreement.
However, in the event Mr. Campbell is selected for the position, the parties
hereto will discuss, in good faith, a new employment agreement for Mr. Campbell
to replace this interim Employment Agreement.

5. Stock Options

     Periodic stock and incentive stock option grants to Mr. Campbell, if any,
shall be determined by the Board of Directors and shall vest and be
exercisable either in accordance with the terms of the grants under which such
stock options are granted or pursuant to the terms of this Employment
Agreement and as set forth in Paragraph 3(c) and Paragraph 3(d) above. Upon
execution of this Agreement by Mr. Campbell, the Company shall grant Mr.
Campbell an option to purchase 25,000 shares of the Company’s stock at the
then market price for the shares; this option shall immediately vest if Mr.
Campbell is not selected as the new Chief Executive Officer and otherwise
shall vest pursuant to the terms under which such stock option was granted;
this option may be exercised by Mr. Campbell during the next five (5) years if
during that time Mr. Campbell remains an employee of the Company, but if Mr.
Campbell should terminate employment with the Company at any time and for any
reason, including, without limitation, the expiration of this Employment
Agreement or the selection of another person as its Chief Executive Officer,
this option may be exercised by Mr. Campbell only within one (1) year from the
date of such employment termination.

6. Unauthorized Disclosure

     While employed by the Company and for five (5) years thereafter, Mr.
Campbell shall not, without the prior written consent of the Company, disclose
to any person, other than a person to whom disclosure is reasonably necessary
or appropriate in connection with the

	 	 	 	 	 
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performance by Mr. Campbell of his duties as an executive officer of the
Company, any material confidential information obtained by Mr. Campbell while
in the employ of the Company with respect to the businesses of the Company or
any of its subsidiaries, including, but not limited to, operations, pricing,
contractual or personnel matters, products, discoveries, improvements, trade
secrets, license agreements, marketing information, suppliers, dealers,
customers, methods of distribution, or any other confidential information the
disclosure of which Mr. Campbell knows, or in the exercise of reasonable care
should know, would be damaging to the Company; provided, however, that
confidential information shall not include any information known generally to
the public (other than as a result of unauthorized disclosure by Mr. Campbell)
or any information so otherwise considered by the Company to be confidential.

     In addition to the preceding, Mr. Campbell further agrees that he shall
never disclose trade secrets of the Company or of any of its subsidiary
companies except under appropriate safeguards to maintain the confidentiality
of such information and also except during his active employment with the
Company in connection with the performance of his duties as an executive
officer of the Company. Mr. Campbell also agrees that the provisions of this
Paragraph do not supercede or in any manner replace the requirements of
applicable statutory and common law protections to the Company with respect to
its assets, including confidential information and trade secrets, and also do
not supercede or in any manner replace the effect or requirements of an
Employee Proprietary Information / Patent Agreement (copy attached as Exhibit
3) or an Employee Confidentiality Agreement (copy attached as Exhibit 4) that
Mr. Campbell previously entered into and that will remain in effect upon
expiration of this Employment Agreement, and Mr. Campbell also agrees that the
provisions of this Paragraph do not supercede or in any manner replace the
effect or the requirements of an Insider Trading Policy and Agreement (copy
attached as Exhibit 5) that Mr. Campbell previously entered into or of
applicable statutory and common law relating to the subject matter thereof.

7. Indemnification of Mr. Campbell

     The Company shall indemnify Mr. Campbell, if Mr. Campbell is made a party,
or threatened to be made a party, to any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative, or
investigative, because Mr. Campbell is or was an officer or director or the
Company or any of its subsidiaries, affiliates, or successors, against expenses
(including reasonable attorneys fees and disbursements), judgments, fines and
amounts paid in settlement actually and reasonably incurred by him in
connection with such action, suit or proceeding, to the fullest extent and in
the manner set forth as permitted by the General Corporation Law of the State
of Delaware and any other applicable law in effect from time to time, and
reimburse such costs as incurred, but in any event no later than thirty (30)
days from date of presentment of such costs to the Company. Such presentment
may be, at the option of Mr. Campbell, in the form of an invoice directly from
Mr. Campbell’s attorney or such other provider as may be reasonably selected by
the Company, and in this event, the Company agrees to reimburse said provider
directly, as opposed to having Mr. Campbell pay the invoice and then seek
reimbursement from the Company. In the event that Mr. Campbell is not
indemnified by the Company, in accordance with the Company’s D&O policy,
subject to the limits of that policy and pursuant to its terms, the policy will
cover Mr. Campbell during employment and after any termination of employment
under the same coverage; terms and limits that such coverage, limits and terms
will be maintained for the officers and directors of the Company.

	 	 	 	 	 
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     In connection with litigation or proceedings before a court, arbitrator,
administrative agency or other tribunal, either during the Term or thereafter,
Mr. Campbell shall, upon request of the Company, testify as a witness or
provide information concerning matters he was involved in during the course of
his employment Mr. Campbell agrees to cooperate fully with Company counsel in
connection with such proceedings, and he will be indemnified with respect to
such activities as set forth in this Paragraph. All reasonable incurred
expenses relating to Mr. Campbell’s participation in any litigation or
proceedings before a court, arbitrator, administrative agency or other
tribunal, either during the Term or thereafter, will be reimbursed to Mr.
Campbell within thirty (30) days of receipt by the Company of appropriate
supporting documentation.

8. Termination

     (a) Termination Upon Death If Mr. Campbell dies during the Term of this
Agreement, Mr. Campbell’s legal representatives shall be entitled to receive
the portion of the Base Salary that would have been paid through the last day
of the six (6) months following the month in which Mr. Campbell’s death
occurred. If in respect of the fiscal year in which Mr. Campbell dies he would
otherwise have been entitled to receive incentive compensation under Paragraph
3(b) by reason of the operations of the Company during such fiscal year, Mr.
Campbell’s legal representatives shall be entitled to receive a pro rata
portion of such incentive compensation determined by multiplying the dollar
amount of the incentive compensation involved by a fraction, the numerator of
which shall be the number of complete calendar months that elapsed during the
fiscal year through the end of the month in which Mr. Campbell died and
denominator of which shall be twelve.

     (b) Termination Upon Disability or Incapacity. In the event Mr.
Campbell has been disabled for a period of sixty (60) days, the Company may
terminate Mr. Campbell’s employment hereunder at the end of any calendar month
thereafter by giving written notice of termination to Mr. Campbell in the event
that Mr. Campbell’s incapacity due to physical or mental illness prevents the
proper performance of the duties of President and Chief Operating Officer or of
another executive position determined by the Board of Directors as set forth
heroin or established pursuant hereto for a substantial portion of any period
of Mr. Campbell’s Term of employment hereunder. Any questions as to the
existence or extent of illness or incapacity of Mr. Campbell, upon which the
Company and Mr. Campbell cannot agree, shall be determined by a qualified
independent physician selected by the Company and approved by Mr. Campbell (or,
if Mr. Campbell is unable to give such approval, by any adult member of the
immediate family or the duly appointed guardian of Mr. Campbell). The
determination of such physician, certified in writing to the Company and to Mr.
Campbell, shall be final and conclusive for all purposes of this Agreement. In
the event of any such termination pursuant to this Paragraph 8(b), Mr. Campbell
shall be entitled to receive his Base Salary through the end of the Term of
this Agreement.

     If in respect of the fiscal year in which Mr. Campbell’s employment
terminates pursuant to this Paragraph 8(b) he would otherwise have been
entitled to receive incentive compensation under Paragraph 3(b) by reason of
the operations of the Company during such fiscal year, Mr. Campbell shall be
entitled to receive a pro rata portion of such incentive compensation
determined by multiplying the dollar amount of the incentive compensation by a
fraction, the numerator of which shall be the number of complete calendar

months that

	 	 	 	 	 
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elapsed during the fiscal year through the end of the month in which Mr.
Campbell’s employment terminated pursuant to this Paragraph 8(b) and the
denominator of which shall be
twelve.

     (c) Termination for Cause The Company may terminate Mr. Campbell’s
employment hereunder for “Cause” (as hereinafter defined) by giving written
notice of termination of this Employment Agreement, the Company shall have
“Cause” to terminate Mr. Campbell’s employment hereunder upon Mr. Campbell’s
(i) habitual drunkenness or drug addiction or material failure to perform
and discharge his duties and responsibilities hereunder, or (ii) misconduct
that is materially and significantly injurious to the Company, or (iii)
conviction of a felony and/or a crime involving the personal dishonesty of
Mr. Campbell or moral turpitude, or (iv) conviction of Mr. Campbell of any
crime or offense involving the property of the Company. Upon any such
termination for cause under this Paragraph 8(c), the Company shall pay Mr.
Campbell his Base Salary through the date of termination, and the Company,
shall have no further obligations under this Employment Agreement.

     (d) Termination without Cause The Company shall have the right to
terminate Mr. Campbell’s employment under this Employment Agreement at any
time, without cause, and the Term of this Employment Agreement shall thereby
end thirty days after the Company has given Mr. Campbell written notice of such
termination. The Company shall pay to Mr. Campbell compensation at his
bi-monthly rate of pay for six (6) months from the date of termination payable
on a semi-monthly basis, that is for a total of twelve (12) semi-monthly
payments regardless of whether his termination may become effective during or
at the end of a month. Mr. Campbell will make himself reasonably available to
members of the Company’s Board of Directors and to senior managers and officers
of the Company to assist in the transition of responsibilities and information
to others and to facilitate the orderly conduct of business operations. By
acceptance of the first semi-monthly payment hereunder, and in consideration of
the receipt of such compensation under this Employment Agreement, Mr. Campbell
agrees that he shall have released and forever discharged the Company, its
subsidiaries and affiliates, successors, predecessors, and all of their
respective officers, directors, employees and agents and employee benefit plans
from all claims, demands, liabilities and causes of action arising out of facts
or occurrences arising or occurring at any time up to and including the time of
Mr. Campbell’s termination, whether known or unknown, and the parties hereto
contemplate that this release shall be construed broadly. Upon termination, the
Company shall have no other financial obligations to Mr. Campbell under any
compensation or benefit plan, program or policy, and Mr. Campbell’s
participation in the Company compensation and benefit plans, programs and
policies shall cease as of the date of Mr. Campbell’s termination, except that
Mr. Campbell shall have such right to continued group health plan coverage as
is provided under COBRA and except that Mr. Campbell may exercise vested
options in accordance with the provisions of the applicable option plan. The
Company shall make Mr. Campbell’s COBRA premium payments for the earlier of six
(6) months after the termination date of Mr. Campbell or the date Mr. Campbell
begins employment with a new employer. Notwithstanding the foregoing, if in
respect of the fiscal year in which Mr. Campbell’s employment terminates
pursuant to this Paragraph 8(d) he would otherwise have been entitled to
receive incentive compensation under Paragraph 3(b) by reason of the operations
of the Company during such fiscal year, Mr. Campbell shall be entitled to
receive a pro rata portion of such incentive compensation determined by
multiplying the dollar amount of the incentive compensation by a fraction, the
numerator of which shall be the number of complete calendar months that elapsed

	 	 	 	 	 
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during the fiscal year through the end of the month in which Mr. Campbell’s
employment terminated pursuant to this Paragraph 8(d) and the denominator of
which shall be twelve (12).

     (e) Non-competition For a period of twelve (12) months after termination
for any reason of Mr. Campbell’s active employment with the Company. Mr.
Campbell agrees not to, as an individual, principal, agent, employee,
consultant or otherwise, directly or indirectly, in the United States or, with
respect to any company or entity in Europe or Canada with whom Mr. Campbell
has had partnership, licensing or other similar business development
discussions on behalf of and during his employment with the Company, render
any services to any firm or company or any division or subsidiary of any firm
or company whose primary activity is the research, development or
commercialization of specific product compounds and/or analogs and/or
derivatives of those product compounds that are currently being researched,
developed and/or commercialized by the Company. Such specific product
compounds and/or analogs and/or derivatives of those product compounds are
limited to Panzem, 2ME2, 2ME2 Analogs, Proteinase Activated Receptor #2 or
PAR-2 and Tissue Factor Pathway Inhibitor or TFP1. Moreover, for a period of
twelve (12) months after the termination of Mr. Campbell’s employment with the
Company, Mr. Campbell agrees not to take any action, without the prior written
consent of the Company, to assist Mr. Campbell’s successor employer or any
other entity in recruiting or hiring any other employee who is or who was an
employee of the Company on January 1, 2004, or on any date more recently than
January 1, 2004. This prohibition includes (1) identifying to such successor
employer or its agents or such other entity, the person or persons who have
special knowledge concerning the Company’s inventions, processes, methods or
confidential affairs; or (2) commenting to Mr. Campbell’s successor employer
or its agents or such other entity about the quantity of work, quality of
work, special knowledge or personal characteristics of any person who is still
employed by the Company. Mr. Campbell also agrees that he will not provide
such information to a prospective employer or to an executive search firm
during interviews preceding possible employment.

9. Reimbursement of Legal Fees

     In a dispute, including litigation, arising under this Employment
Agreement, the Company agrees to reimburse Mr. Campbell promptly after the
final conclusion of such dispute or litigation for reasonable attorneys’ fees
incurred if Mr. Campbell or the Company sues on this Agreement and the
Company is not the prevailing party.

10. Non-Disparagement

     During the Term and thereafter Mr. Campbell shall not communicate
negatively about or otherwise disparage the Company or its products or each
and any of the released parties described in Paragraph 8(d) in any way
whatsoever. The Company agrees that it, acting in its official capacity,
shall not make any public false, disparaging or derogatory statements in
connection with or concerning Mr. Campbell’s service to the Company except as
may be required for truthful, sworn testimony or in connection with a legal
or administrative case, proceeding, report, claim or dispute. In the event of
the termination of Mr. Campbell’s employment, thereafter, in response to
inquiries from prospective employers of Mr. Campbell, the Company shall only
provide information relative to dates of employment unless otherwise
requested by Mr. Campbell. In the event Mr. Campbell breaches any of the
conditions set forth herein or in any other Paragraph of this Agreement, the
Company shall discontinue the provision of any payment or benefits to him
under this Employment

	 	 	 	 	 
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Agreement, and he shall forfeit his entitlement to any further payments or
benefits and shall be required to return to the Company any compensation
already provided to him under this Employment Agreement

11. Miscellaneous

     (a) Assignments and Binding Effect The respective rights and
obligations of the parties under this Employment Agreement shall be binding
upon the parties hereto and their heirs, executors, administrators, successors,
and assigns, including, in the case of the Company, any other corporation or
entity with which the Company may be merged or otherwise combined or which may
acquire all or substantially all of the Company’s assets, provided no such
assignment shall discharge the Company of its obligations herein, and, in the
case of Mr. Campbell, his estate or other legal representatives, provided that
Mr. Campbell may not assign his rights hereunder without prior written consent
of the Company.

     (b) Governing Law and Survival. This Agreement shall be governed as to its
validity, interpretation and effect by the laws of the State of Maryland. The
provisions of Paragraphs 6,7, 8(d), 8(e), 9,10 and Section 11 shall survive
termination of this Employment Agreement.

     (c) Severability In the event that any provision or portion of this
Employment Agreement shall be determined to be invalid, illegal, or
unenforceable for any reason, the remaining provisions and portions of this
Employment Agreement shall remain in full force and effect to the fullest
extent permitted by law. Such invalid, illegal or unenforceable provision(s)
shall be deemed modified to the extent necessary to make it or them valid,
legal, and enforceable.

     (d) Entire Agreement and Amendments This Employment Agreement constitutes
the entire agreement and understanding of the Company and Mr. Campbell with
respect to the terms of Mr. Campbell’s employment with the Company and
potential separation from such employment, and supersedes all prior
discussions, understandings and agreements with respect thereto, including the
December 30, 2003, Letter, except that it does not supercede or in any manner
replace the effect or requirements of an Employee Proprietary Information /
Patent Agreement (copy attached as Exhibit 3), an Employee Confidentiality
Agreement (copy attached as Exhibit 4), or an Insider Trading Policy and
Agreement (copy attached as Exhibit 5) that Mr. Campbell previously entered
into, which will remain in effect. Any payment made and benefit provided
pursuant to the December 30, 2003, Letter (copy attached as Exhibit 2) will be
deducted from any payment or benefit that would otherwise be due to
or for Mr. Campbell pursuant to this Employment Agreement.

     (e) Captions All captions and headings used herein are for convenient
reference only and do not form part of this Employment Agreement.

     (f) Waiver. The waiver of a breach of any term or provision of this
Employment Agreement shall not operate as or be construed to be a waiver of
any other or subsequent breach of this Employment Agreement.

     (g) Notice. Any notice or communication required or permitted under this
Employment Agreement shall be made in writing and shall be delivered by hand or
mailed by registered or certified mail, return receipt requested, first class
postage prepaid, addressed as follows:

	 	 	 	 	 
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If to Mr. Campbell:

25242 Conrad Court

Damascus, MD 20872

If to the Company:

EntreMed, Inc. 

9640 Medical Center Drive

Rockville, Maryland 20850

Attn.: Chief Financial Officer

     (i) Counterparts. This Employment Agreement may be executed in
counterparts, each of which shall constitute one and the same Employment
Agreement.

     IN WITNESS WHEREOF, the parties hereto have executed this Employment
Agreement on the dates set forth below.

	 	 	 
	ENTREMED, INC.

	 	Neil J. Campbell
	 
	 	 
	By: /s/ Michael Tarnow

	 	/s/ Neil J. Campbell
	

	 	

	       Michael Tarnow
	 	 
	       Chairman, EntreMed Board of Directors
	 	 
	 
	 	 
	Date: April 12, 2004

	 	Date: April 18, 2004

	 	 	 	 	 
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                                                                    EXHIBIT 10.2

                             U.S. PREMIUM BEEF, LTD.

                                UNIFORM DELIVERY
                             AND MARKETING AGREEMENT

                                   EVEN SLOTS

<PAGE>

                                                                    Exhibit 10.2

U.S. PREMIUM BEEF, LTD. EVEN SLOTS DELIVERY AGREEMENT
                                                 FOR PROCESSING AT NATIONAL BEEF

MEMBER NO.______

                             U.S. PREMIUM BEEF, LTD.
                                 P.O. BOX 20103
                              KANSAS CITY, MO 64195
                      PHONE: 866-877-2525 FAX: 816-713-8810

                    UNIFORM DELIVERY AND MARKETING AGREEMENT
                           FOR CATTLE DELIVERY TO USPB
              FOR PROCESSING AT NATIONAL BEEF PACKING COMPANY, LLC.

                                  "EVEN SLOTS"

                    THIS AGREEMENT, effective as of December 1, 1997 is between
U.S. Premium Beef, Ltd. (a Kansas cooperative association, referred to as the
"Cooperative"), and the undersigned contracting producer (referred to as
"Producer") who is a member of the Cooperative. Delivery of cattle to U.S.
Premium Beef, Ltd. is not due until delivery schedules are provided to the
Producer by the Cooperative. The Cooperative desires to protect its interests by
ensuring that it will have access to an adequate supply of cattle for its cattle
processing project; and the Producer desires to supply cattle to the
Cooperative. The Cooperative and the Producer agree that the Producer must own,
control, or associate with others so that beneficial changes can be made in
cattle breeding and production to meet processing and beef consumer preference
demands. Subject to the terms, conditions, and obligations of the Cooperative
and Producer in this Agreement, similar obligations of other cattle producers
contracting with the Cooperative, and in accordance with the Articles of
Incorporation and Bylaws of the Cooperative, the Producer and the Cooperative
agree as follows:

                    1. COMMITMENT TO SUPPLY CATTLE TO THE COOPERATIVE. The
Producer agrees to deliver and supply to the Cooperative and the Cooperative
agrees to buy and receive one head of cattle from the Producer for each share of
common stock owned by the Producer (subject to assignment as provided below and
as provided in Paragraph 15) each year during the term of this Agreement except
that the Board of Directors may reduce this amount by giving advance written
notice if the Board determines in its sole discretion that the actual processing
capacity will be a lesser amount. The Board of Directors may, by resolution,
allow a small deviation from the above delivery requirement to allow for
production variances. The Board of Directors may approve the assignment of
delivery rights under this Agreement to another member or associate member of
the Cooperative, however, the Producer remains liable for any underdeliveries.
The Cooperative and Producer agree that this Uniform Delivery and Marketing
Agreement is a cooperative marketing agreement subject to Kansas Statutes,
Section 17-1616.

                    2. DELIVERY OF CATTLE. The cattle committed to the
Cooperative under paragraph 1 must be delivered to the Cooperative on an equal
four week basis as determined by the Cooperative. A uniform delivery schedule
shall be prepared by the Cooperative and given to the Producer on a regular
basis. The Producer agrees to supply the cattle in accordance with the delivery
schedule and agrees the risk of loss for the cattle shall remain with the
Producer until the cattle are delivered to the Cooperative at a location
designated by the Cooperative.

<PAGE>

U.S. PREMIUM BEEF, LTD. EVEN SLOTS DELIVERY AGREEMENT
                                                 FOR PROCESSING AT NATIONAL BEEF

         3. APPOINTMENT OF COOPERATIVE AS PURCHASING AGENT. The Producer
appoints and designates the Cooperative to act as his or her sole agent in the
sale and marketing or utilization of cattle committed to the Cooperative under
this Agreement and any extensions, renewals or amendments of this Agreement.

         If a Producer is unable to supply the required amount of cattle, the
Producer must obtain the cattle from any other source and deliver the cattle to
the Cooperative, just as if the cattle had been produced by the Producer. If the
Producer does not deliver the cattle as stated, the Producer agrees that the
Cooperative, at its option, may act as Producer's agent for the purpose of
obtaining cattle in the name of the Producer and may charge to the Producer all
expenses, including, but not limited to, the price of the cattle, shipping,
reasonable attorneys' fees, and all incidental costs.

         If the Producer is a feedlot only and does not own or control cow/calf
operations, Producer is encouraged to make fifty percent (50%) of the delivery
rights and obligation of this Agreement available to be transferred to cow/calf
operations supplying the feedlot for at least two years. The Cooperative agrees
to make any additional delivery rights available on a first come basis to
Producers with feedlots who have transferred delivery rights to cow/calf
operations as stated above.

         The Cooperative shall have no obligation to accept for marketing or
processing any cattle in an amount greater than that specified above, regardless
of whether the Producer's total cattle production has increased.

         4. MINIMUM QUALITY STANDARDS. All cattle delivered by the Producer to
the Cooperative shall meet the minimum quality standards of the industry for
cattle to be processed. Cattle of substandard quality, as determined by the
Cooperative, shall be either: (1) rejected and returned to the Producer with all
costs relating to the rejection and return charged to the Producer; or (2)
accepted and handled or disposed in a manner customary in the industry with any
necessary costs charged to the Producer. If, in the sole opinion of the
Cooperative, the Producer continually fails to deliver cattle that meet minimum
quality standards, the Cooperative may terminate this Agreement and the
Producer's membership in the Cooperative.

         5. POOLING ARRANGEMENT. The Cooperative may pool the Producer's cattle
for sale to various markets or for processing.

         6. PRODUCER IS PRODUCER OF LIVESTOCK. The Producer warrants to the
Cooperative that the Producer is a producer of livestock, as defined in Kansas
Statutes, Section 17-1606, under this Agreement.

         7. PAYMENT TO PRODUCER. The Cooperative shall market, process and
utilize the cattle and products from the cattle in a manner it deems to be in
the best interest of the Cooperative and all of the producers. The Cooperative
agrees to pay the Producer according to a Pricing Schedule determined by the
Board of Directors which shall include the following methods:

<PAGE>

U.S. PREMIUM BEEF, LTD. EVEN SLOTS DELIVERY AGREEMENT
                                                 FOR PROCESSING AT NATIONAL BEEF

                  (a) Cattle Payments. For delivery and transfer of cattle to
the Cooperative, market based purchase price plus consumer, market and processor
based quality incentives as determined by the Board and to the extent possible
as determined by the Board of Directors the Cooperative will base payments on a
quality grid pricing guide for cattle delivered to the Cooperative;

                  (b) Patronage Dividends. In addition to the above payments for
cattle, the Producer shall be entitled to payments from earnings of the
Cooperative as patronage dividends in accordance with the Bylaws of the
Cooperative.

         8. TEN YEAR AGREEMENT.

                  The term of this Agreement shall be ten years commencing on
the date of first delivery.

         9. LIQUIDATED DAMAGES AND INJUNCTIVE RELIEF. The Cooperative shall be
entitled to relief under Kansas Statutes, Section 17-1616 including injunctive
relief or a decree of specific performance in the event of any breach of this
Agreement. It is further agreed that in the event of any breach of this
Agreement, because of the impossibility of ascertaining with accuracy the
damages resulting from such a breach, the Cooperative shall be entitled, as
liquidated damages, to an amount equal to twenty dollars ($20) per head of
cattle or twenty-five percent (25%) of the market value of the cattle which the
Producer has failed to deliver or improperly furnished under the terms of this
Agreement, provided however the Board may by resolution exempt from breach and
liquidated damages a certain amount or percentage of the cattle required to be
delivered based on accepted production losses. The greater amount of liquidated
damages applies if the Board of Directors determines the breach is willful, the
reason of the breach was to take advantage of higher markets elsewhere, or the
Producer is abandoning the Member's contractual duties to the Cooperative and
other members of the Cooperative. Should the non-performance by the Producer of
his or her obligations under this Agreement result in the termination of his or
her membership in the Cooperative, the Producer agrees that, in addition to any
other remedies available to the Cooperative, the amount of damages as he or she
may become obligated to pay the Cooperative shall be credited to the Cooperative
against the Producer's stock or other evidences of equity. The Producer agrees
to pay all reasonable legal costs and expenses, including attorneys' fees and
court costs, incurred by the Cooperative in any action brought by the
Cooperative against the Producer for any breach or threatened breach of this
Agreement.

         10. COMPLIANCE WITH THE COOPERATIVE'S GOVERNING INSTRUMENTS AND CONSENT
TO TAKE DISTRIBUTIONS INTO INCOME. The Producer accepts and agrees to conform to
and abide by the provisions of the Articles of Incorporation and Bylaws of the
Cooperative and all amendments thereto during the term of this Agreement. In
addition, the Producer agrees that this Agreement shall constitute written
consent that: (1) the amount of any distributions with respect to his or her
patronage during a year in which he or she patronized the Cooperative on the
basis of cattle delivered to the Cooperative, made by qualified written notices
of allocation as defined in Subchapter T of the Internal Revenue Code of 1986
(hereinafter cited by Section number only), and received by him or her from the
Cooperative, will be taken into account by him or her at its stated dollar
amount in the manner provided in Section 1385 in the taxable year in which such
qualified written notice of allocation is received by him or her; and (2) upon a
determination by the Board of Directors that a unit retain is to constitute a
qualified per unit retain (as defined in Subchapter T of the Internal Revenue
Code of 1986, as amended), he or she

<PAGE>

U.S. PREMIUM BEEF, LTD. EVEN SLOTS DELIVERY AGREEMENT
                                                 FOR PROCESSING AT NATIONAL BEEF

will take the per unit retain certificate issued to him or her in connection
therewith into account at its stated dollar amount in the manner provided in
Section 1388 in the taxable year in which the per unit retain certificate is
received by him or her.

         11. SECURITY INTERESTS. If the Producer grants a security interest in
any of his or her cattle marketed to the Cooperative during the term of this
Agreement, the Cooperative shall have the right, but not the obligation, after
acceptance of the cattle by the Cooperative, to pay off all or part of the
obligation underlying the security interest. The payment shall be for the
account of the Producer and shall be charged against the amount owing to the
Producer by the Cooperative.

         The Producer shall inform the Cooperative of all security interests he
or she has granted by disclosing all security interests as provided by state or
federal law, and if not provided, then Producers shall provide disclosure
separately in writing. The Producer shall notify the Cooperative prior to
granting any security interest.

         12. INABILITY OF COOPERATIVE TO PERFORM. In case of fire, explosions,
interruption of power, strikes or other labor disturbances, lack of
transportation facilities, shortage of labor supplies, floods, action of the
elements, riot, interference of civil or military authorities, enactment of
legislation or any unavoidable casualty or cause beyond the control of the
Cooperative affecting the conduct of the Cooperative's business to the extent of
preventing or unreasonably restricting the receiving, handling, processing,
marketing, or other operations, the Cooperative shall be excused for performance
during the period that the Cooperative's business or operations are so affected.
The Cooperative in its judgment may, during such period, operate on a limited
basis and accept such portion of cattle as the Cooperative has informed the
Producer it can economically handle.

         The Cooperative shall give written notice to the Producer of the
Cooperative's inability to perform and the specific cause or causes for the
non-performance. In any event, the Cooperative shall pay, pursuant to this
Agreement, for all cattle accepted by the Cooperative.

         13. CONTINGENCIES. Notwithstanding the provisions of this Agreement to
the contrary, the rights and obligations of the Cooperative and the Producer
shall be subject to and contingent upon:

                  (1) the Producer completing the requirements of being a member
of the Cooperative;

                  (2) commitment of a total of 600,000 or more head of cattle to
the Cooperative under similar uniform delivery and marketing agreements;

                  (3) determination by the Cooperative's Board of Directors that
a processing facility is available to process cattle delivered to the
Cooperative by the Producers collectively;

                  (4) the execution of agreements to provide processing and
marketing of the Producers' cattle and cattle products; and

                  (5) securing adequate capitalization through member share
equity offerings, debt financing and other commitments.

<PAGE>

U.S. PREMIUM BEEF, LTD. EVEN SLOTS DELIVERY AGREEMENT
                                                 FOR PROCESSING AT NATIONAL BEEF

         In the event any of the contingencies under (1) to (5) above are not
fulfilled, then neither the Cooperative nor the Producer shall have any
obligations under this Agreement.

          14. COMPLETE AGREEMENT. The Cooperative and Producer agree that there
are no oral or other conditions, promises, representations or inducements in
addition to or in variance with any of the terms of this Agreement, and that
this Agreement fully and completely represents the voluntary and clear
understanding of both parties.

          15. ASSIGNMENT. The Producer may only assign or transfer his or her
delivery rights under this Agreement, to a member or associate member of the
Cooperative. No assignment or transfer may occur without the prior written
consent of the Cooperative, and then only to a producer who is a member or
associate member. The Cooperative may not assign its obligations under this
Agreement without the prior written consent of Producer.

         16. WAIVER OF BREACH. No waiver of a breach of any of the provisions
contained in this Agreement shall be construed to be a waiver of any subsequent
breach of the same or of any other provision of this Agreement.

          17. CONSTRUCTION OF TERMS OF AGREEMENT. The language and all parts of
this Agreement shall be construed as a whole and not strictly for or against any
party. In the event any term, covenant or condition of this Agreement is held to
be invalid or void by a court, the invalidity of any such term, covenant or
condition shall in no way affect any other term, covenant or condition of this
Agreement. This Agreement shall be interpreted under Kansas law.

         18. SUCCESSORS AND ASSIGNS. Subject to the other provisions of this
Agreement, all of the terms, covenants and conditions of this Agreement shall
inure to the benefit of and shall bind the parties and their successors and
permitted assigns.

         19. TERMINATION OF ANY PRIOR MARKETING AGREEMENT. The Cooperative and
the Member agree that this Agreement terminates, supersedes, and replaces any
prior Marketing Agreements between the Cooperative and the Member on the
effective date of this Agreement.

PRODUCER                                    U.S. PREMIUM BEEF, LTD.

By                                          By
   ------------------------------------        ---------------------------------
                                                     Terry Ryan
         ------------------------------              Its Chair

<PAGE>

U.S. PREMIUM BEEF, LTD. EVEN SLOTS DELIVERY AGREEMENT
                                                 FOR PROCESSING AT NATIONAL BEEF

Address                                     ATTEST:

                                            By
------------------------------------           ---------------------------------
                                                    John Fairleigh
------------------------------------                Its Secretary

Date:                                       Date:
      ------------------------------              ------------------------------

<PAGE>

U.S. PREMIUM BEEF, LTD. EVEN SLOTS DELIVERY AGREEMENT
                                                 FOR PROCESSING AT NATIONAL BEEF

                             U.S. PREMIUM BEEF, LTD.

                                UNIFORM DELIVERY
                             AND MARKETING AGREEMENT

                           FOR CATTLE DELIVERY TO USPB
                       FOR PROCESSING AT FARMLAND NATIONAL
                           BEEF PACKING COMPANY, L.P.

                                   EVEN SLOTS

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