Document:

GRANGE NATIONAL BANK
                              AMENDED AND RESTATED
             SUPPLEMENTAL EXECUTIVE RETIREMENT AGREEMENT

           This Agreement is entered into this February 4, 2003, by and between
  GRANGE NATIONAL BANK, a nationally-chartered commercial bank located in
  Laceyville, Pennsylvania (the "Company"), and _____________ (the "Executive").

           On January 1, 1996, the Company and the Executive entered into an
  Executive Supplemental Income Agreement (the "Prior Agreement"). Pursuant to
  its powers to amend the Prior Agreement, the Company hereby amends and
  restates the Prior Agreement in its entirety.

           The purpose of this Agreement is to provide specified benefits to the
  Executive, a member of a select group of management or highly compensated
  employees who contribute materially to the continued growth, development and
  future business success of the Company. This Agreement shall be unfunded for
  tax purposes and for purposes of Title I of ERISA.

                                    ARTICLE 1
                                   DEFINITIONS

           The following words and phrases shall have the following meanings,
  unless the context requires otherwise:

  1.1      "ACCRUAL BALANCE" means the liability accrued on the books of the
           Company for the Company's obligation for the Normal Retirement
           Benefit, using generally accepted accounting principles.

  1.2      "BENEFICIARY" means each designated person, or the estate of the
           Executive, entitled to benefits, if any, upon the death of the
           Executive determined pursuant to Article 3.

  1.3      "BENEFICIARY DESIGNATION FORM" means the form established from time
           to time by the Plan Administrator that the Executive completes, signs
           and returns to the Plan Administrator to designate one or more
           Beneficiaries.

  1.4      "BOARD" means the Board of Directors of the Company as from time to
           time constituted.

  1.5      "CHANGE OF CONTROL " means

           (a) A change in the ownership of the capital stock of the Company or
           the Corporation, whereby another corporation, person, or group acting
           in concert (hereinafter this Agreement shall collectively refer to
           any combination of these

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          three [another corporation, person, or group acting in concert] as a
          "Person") as described in Section 14(d)(2) of the Securities Exchange
          Act of 1934, as amended (the "Exchange Act"), acquires, directly or
          indirectly, beneficial ownership (within the meaning of Rule 13d-3
          promulgated under the Exchange Act) of a number of shares of capital
          stock of the Company or the Corporation which constitutes fifty
          percent (50%) or more of the combined voting power of the Company's or
          the Corporation's then outstanding capital stock then entitled to vote
          generally in the election of directors; or

          (b) The persons who were members of the Board of Directors of the
          Company or the Corporation's immediately prior to a tender offer,
          exchange offer, contested election or any combination of the
          foregoing, cease to constitute a majority of the Board of Directors;
          or

          (c) The adoption by the Board of Directors of the Company or the
          Corporation of a merger, consolidation or reorganization plan
          involving the Company or the Corporation in which the Company or the
          Corporation is not the surviving entity, or a sale of all or
          substantially all of the assets of the Company or the Corporation. For
          purposes of this Agreement, a sale of all or substantially all of the
          assets of the Company or the Corporation shall be deemed to occur if
          any Person acquires (or during the 12-month period ending on the date
          of the most recent acquisition by such Person, has acquired) gross
          assets of the Company or the Corporation that have an aggregate fair
          market value equal to fifty percent (50%) or more of the fair market
          value of all of the respective gross assets of the Company or the
          Corporation immediately prior to such acquisition or acquisitions; or

          (d) A tender offer or exchange offer is made by any Person which
          results in such Person beneficially owning (within the meaning of Rule
          13d-3 promulgated under the Exchange Act) either fifty percent (50%)
          or more of the Company's or the Corporation's outstanding shares of
          Common Stock or shares of capital stock having fifty percent (50%) or
          more the combined voting power of the Company's or the Corporation's
          then outstanding capital stock (other than an offer made by the
          Company or the Corporation), and sufficient shares are acquired under
          the offer to cause such person to own fifty percent (50%) or more of
          the voting power; or

          (e) Any other transactions or series of related transactions occurring
          which have substantially the same effect as the transactions specified
          in any of the preceding clauses of this Section 1.5.

          Notwithstanding the above, certain transfers are permitted within
          Section 318 of the Code and such transfers shall not be deemed a
          Change of Control under this Section 1.5.

  1.6     "CODE" means the Internal Revenue Code of 1986, as amended.

  1.7     "COMPENSATION" means the annual compensation, including bonuses,

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          commissions, overtime, relocation expenses, incentive payments,
          non-monetary awards, and including automobile allowances paid to the
          Executive for employment services rendered to the Company, before
          reduction for compensation deferred pursuant to all qualified,
          non-qualified and Code ss. 125 plans of the Company.

  1.8     "CORPORATION" means Grange National Banc Corp., a Pennsylvania
          corporation.

  1.9     "DISABILITY" means a condition whereby the Executive, because of a
          physical or mental sickness, accident or injury, is or will be unable
          to perform the duties of the Executive's customary position of
          employment with the Company or any other employer. The Board, in its
          sole discretion, shall determine whether the Executive is disabled and
          may require the Executive to submit to a physical examination in order
          to determine disability.

  1.10    "DISABILITY BENEFIT" means the benefit as set forth in Section 2.4.

  1.11    "EARLY RETIREMENT DATE" means the date the Executive attains both the
          age of fifty-five (55) and ten (10) Years of Service while in the
          continuous employ of the Company.

  1.12    "EARLY RETIREMENT BENEFIT" means the benefit as set forth in Section
          2.3.

  1.13    "EFFECTIVE DATE" means 1/1/96.

  1.14    "FINAL COMPENSATION" means the average of the Executive's Compensation
          for his or last five calendar years of employment (including the
          annualized compensation for the calendar year in which the event that
          entitled the Executive to a distribution of benefits under this
          Agreement occurred).

  1.15    "NORMAL RETIREMENT AGE" means the Executive's SIXTY-FIFTH (65TH)
          birthday.

  1.16    "NORMAL RETIREMENT BENEFIT" means the benefit as set forth in Section
          2.2.

  1.17    "NORMAL RETIREMENT DATE" means the later of the Normal Retirement Age
          or Termination of Employment.

  1.18    "PENSION BENEFIT" means the balance in the Executive's 401(k) (as of
          the date any benefits are being determined) attributed to all Company
          contributions, plus the return on those contributions, amortized over
          a two hundred forty (240) month period with interest calculated on the
          unpaid balance at an annual rate of eight percent (8%), compounded
          monthly.

  1.19    "PLAN ADMINISTRATOR" means the plan administrator described in Article
          5.

  1.20    "PLAN YEAR" means the twelve (12) month period from January 1 to
          December 31.

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  1.21    "TERMINATION FOR CAUSE" means termination of the Executive's
          employment for: (a) gross negligence or gross neglect of duties; (b)
          commission of a felony or of a gross misdemeanor involving moral
          turpitude; or (c) actions inimical to the interests of the Company,
          including but not limited to fraud, disloyalty, dishonesty or willful
          violation of any law or significant Company policy committed in
          connection with the Executive's employment and resulting in a material
          adverse effect on the Company.

  1.22    "TERMINATION OF EMPLOYMENT" means the date on which the Executive (i)
          retires, resigns or ceases to be an employee; (ii) dies while in the
          active employ of the Company; or (iii) departs from the service of the
          Company for any reason; provided, that the Executive will not be
          deemed to have terminated the Executive's employment solely by reason
          of a leave of absence duly approved by the Company.

  1.23    "YEARS OF SERVICE" means the twelve consecutive month period beginning
          on the Executive's date of hire and any twelve (12) month anniversary
          thereof, during the entirety of which time the Executive is an
          employee of the Company. The Plan Administrator in its discretion may
          also grant additional Years of Service in such circumstances where it
          deems such additional service appropriate.

                                    ARTICLE 2
                          RETIREMENT AND DEATH BENEFITS

  2.1     AGREEMENT BENEFITS. The Executive's benefits under this Agreement
          shall be limited to those described in this Article 2, and shall be
          subject to any conditions and limitations set forth in Article 4 and
          contained elsewhere in this Agreement.
  2.2     NORMAL RETIREMENT BENEFIT. Upon the Normal Retirement Date, the
          Company shall pay to the Executive an annual Normal Retirement Benefit
          equal to eighty percent (80%) of the Executive's Final Compensation
          reduced by the (a) Pension Benefit, and (b) fifty percent (50%) of the
          Social Security benefit that would be receivable by the Executive
          calculated as if the Executive's Normal Retirement Age were also
          his.-normal retirement age or age at which unreduced Social Security
          benefits were available under the Social Security law (regardless of
          whether any Social Security benefits are actually payable currently on
          the Executive's Normal Retirement Date). The Company shall pay the
          Normal Retirement Benefit to the Executive in twelve (12) equal
          monthly installments commencing as of the first day of the month
          following the Executive's Normal Retirement Date and payable during
          the Executive's lifetime on or around the first day of each successive
          month thereafter until the Executive has received one hundred eighty
          (180) installments. Upon making all of such installments, the
          Company's obligation to provide such payments will cease. No further
          benefit under this Agreement is to be provided.
  2.3     EARLY RETIREMENT BENEFIT. Upon the Executive's Termination of

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          Employment on or after the Early Retirement Date and before the Normal
          Retirement Date, the Company shall pay to the Executive an annual
          Early Retirement Benefit, determined by amortizing the Accrual Balance
          over one hundred eighty (180) equal monthly installments at an annual
          rate of interest equal to the Prime Rate as published in the WALL
          STREET JOURNAL on the last business day immediately preceding the
          Executive's Termination of Employment. The Company shall pay the Early
          Retirement Benefit to the Executive commencing as of the first day of
          the month following the Executive's Termination of Employment
          following the Early Retirement Date and payable during the Executive's
          lifetime on or around the first day of each successive month
          thereafter until the Executive has received one hundred eighty (180)
          installments. Upon making all of such installments, the Company's
          obligation to provide such payments will cease. No further benefit
          under this Agreement is to be provided.
  2.4     DISABILITY BENEFIT. Upon Termination of Employment due to Disability
          prior to Normal Retirement Age, the Company shall pay to the Executive
          an annual Disability Benefit, determined by amortizing the Accrual
          Balance over one hundred eighty (180) equal monthly installments at an
          annual rate of interest equal to the Prime Rate as published in the
          WALL STREET JOURNAL on the last business day immediately preceding the
          Executive's Termination of Employment. The Company shall pay the
          Disability Benefit to the Executive commencing as of the earlier of
          first day of the month following the Executive's Normal Retirement Age
          or (ii) the date payments to the Executive cease under a
          Company-sponsored disability plan, and payable during the Executive's
          lifetime on or around the first day of each successive month
          thereafter until the Executive has received one hundred eighty (180)
          installments. Upon making all of such installments, the Company's
          obligation to provide such payments will cease. No further benefit
          under this Agreement is to be provided.
  2.5     CHANGE OF CONTROL BENEFIT. Following a Change of Control, upon the
          Executive's Termination of Employment for reasons other than death,
          Disability, reaching the Early Retirement Date, or attaining Normal
          Retirement Age, the Company shall pay to the Executive an annual
          Change of Control Benefit, determined by amortizing the Accrual
          Balance over one hundred eighty (180) equal monthly installments at an
          annual rate of interest equal to the Prime Rate as published in the
          WALL STREET JOURNAL on the last business day immediately preceding the
          Executive's Termination of Employment. The Company shall pay the
          Change of Control Benefit to the Executive commencing as of the first
          day of the month following the Executive's Termination of Employment
          and payable during the Executive's lifetime on or around the first day
          of each successive month thereafter until the Executive has received
          one hundred eighty (180) installments. Upon making all of such
          installments, the Company's obligation to provide such payments will
          cease. No further benefit under this Agreement is to be provided.
  2.6     PRE-RETIREMENT DEATH BENEFIT. If the Executive dies while in the
          active employ by the Company, the Company shall pay to the Beneficiary
          the following benefits:

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                              Year 1: 100% of Compensation
                              Years 2-5: 75% of Compensation
                              Years 6-15: 50% of Compensation

          The Company shall pay the Pre-Retirement Death Benefit to the
          Beneficiary in twelve (12) monthly installments commencing as of the
          first day of the month following the Executive's death and on or
          around the first day of each successive month thereafter until the
          Executive's beneficiary has received one hundred eighty (180)
          installments. Upon making all of such installments, the Company's
          obligation to provide such payments will cease. No further benefit
          under this Agreement is to be provided.
  2.7     POST-COMMENCEMENT DEATH BENEFIT. If the Executive dies after any
          benefit payments have commenced under this Article but before
          receiving all such payments, the Company shall pay to the Beneficiary
          the remaining benefits at the same time, for such duration and in the
          same amounts they would have been paid to the Executive had the
          Executive survived.
  2.8     POST-RETIREMENT, COMMENCEMENT DEATH BENEFIT. If the Executive is
          entitled to a benefit under this Article, but dies prior to the
          commencement of said benefit payments, the Company shall pay the same
          benefit payments to the Beneficiary that the Executive was entitled to
          prior to death except that the benefit payments shall commence on the
          first day of the month following the date of the Executive's death.
  2.9     WITHHOLDING AND PAYROLL TAXES. The Company shall withhold from any and
          all benefits made under this Article 2, all federal, state and local
          income taxes, employment and other taxes required to be withheld by
          the Company in connection with the benefits hereunder, in amounts to
          be determined in the sole discretion of the Company.

                                    ARTICLE 3
                                  BENEFICIARIES

  3.1      BENEFICIARY. The Executive shall have the right, at any time, to
           designate a Beneficiary(ies) to receive any benefits payable under
           this Agreement to a beneficiary upon the death of the Executive. The
           Beneficiary designated under this Agreement may be the same as or
           different from the Beneficiary designation under any other plan of
           the Company in which the Executive participates.
  3.2      BENEFICIARY DESIGNATION; CHANGE. The Executive shall designate a
           Beneficiary by completing and signing the Beneficiary Designation
           Form, and delivering it to the Plan Administrator or its designated
           agent. The Executive's beneficiary designation shall be deemed
           automatically revoked if the beneficiary predeceases the Executive or
           if the Executive names a spouse as beneficiary and the marriage

<PAGE>

          is subsequently dissolved. The Executive shall have the right to
          change a Beneficiary by completing, signing and otherwise complying
          with the terms of the Beneficiary Designation Form and the Plan
          Administrator's rules and procedures, as in effect from time to time.
          Upon the acceptance by the Plan Administrator of a new Beneficiary
          Designation Form, all Beneficiary designations previously filed shall
          be cancelled. The Plan Administrator shall be entitled to rely on the
          last Beneficiary Designation Form filed by the Executive and accepted
          by the Plan Administrator prior to the Executive's death.
  3.3     ACKNOWLEDGMENT. No designation or change in designation of a
          Beneficiary shall be effective until received, accepted and
          acknowledged in writing by the Plan Administrator or its designated
          agent.
  3.4     NO BENEFICIARY DESIGNATION. If the Executive dies without a valid
          beneficiary designation, or if all designated Beneficiaries predecease
          the Executive, then the Executive's spouse shall be the designated
          Beneficiary. If the Executive has no surviving spouse, the benefits
          shall be made to the personal representative of the Executive's
          estate.
  3.5     FACILITY OF PAYMENT. If the Plan Administrator determines in its
          discretion that a benefit is to be paid to a minor, to a person
          declared incompetent, or to a person incapable of handling the
          disposition of that person's property, the Plan Administrator may
          direct payment of such benefit to the guardian, legal representative
          or person having the care or custody of such minor, incompetent person
          or incapable person. The Plan Administrator may require proof of
          incompetence, minority or guardianship as it may deem appropriate
          prior to distribution of the benefit. Any payment of a benefit shall
          be a payment for the account of the Executive and the Executive's
          Beneficiary, as the case may be, and shall be a complete discharge of
          any liability under the Agreement for such payment amount.

                                    ARTICLE 4
                         GENERAL LIMITATIONS ON BENEFITS

  4.1     TERMINATION FOR CAUSE. If there is a Termination for Cause by the
          Company of the Executive, the Executive shall cease participation
          hereunder as of the date of such termination and no benefits shall be
          paid to the Executive or the Executive's Beneficiary.
  4.2     REQUIREMENT OF NON-COMPETITION. The Company shall not pay to the
          Executive any benefit under this Agreement if, during the term that
          benefits payments are being made, the Executive, without the prior
          written consent of the Board engages in, becomes interested in,
          directly or indirectly, as a sole proprietor, as a partner in a
          partnership, or as a substantial shareholder in a corporation, or
          becomes associated with, in the capacity of employee, director,
          officer, principal, agent, trustee or in any other capacity
          whatsoever, any enterprise

<PAGE>

          conducted within twenty-five (25) miles of any office of the Company
          existing as of the date of the Executive's Termination of Employment,
          which enterprise is, or may deemed to be, competitive with any
          business carried on by the Company as of the date of the Executive's
          Termination of Employment. This section shall not apply following a
          Change of Control.
  4.3     SERVICES. Payment of the Early Retirement Benefit or Normal Retirement
          Benefit is conditioned upon the Executive, while receiving payments
          under this Agreement, rendering such reasonable business consulting
          and advisory services to the Company as requested by the Board. Such
          services shall not require the Executive to be active in the Company's
          day-to-day activities, and the Executive shall be compensated for such
          services in an amount to be then agreed upon, and shall be reimbursed
          for all expenses incurred in performing such services.
  4.4     EXECUTIVE'S SUICIDE OR MISSTATEMENT. The Company shall not pay any
          benefit under this Agreement if the Executive commits suicide within
          two years of the Effective Date of this Agreement. In addition, the
          Company shall not pay any benefit under this Agreement if the
          Executive has made any material misstatement of fact on any
          application for insurance or any benefits provided by the Company to
          the Executive.
                                    ARTICLE 5
                           ADMINISTRATION OF AGREEMENT

  5.1      PLAN ADMINISTRATOR DUTIES. This Agreement shall be administered by a
           Plan Administrator which shall consist of the Board, or such
           committee as the Board shall appoint. The Executive may be a member
           of the Plan Administrator. The Plan Administrator shall also have the
           discretion and authority to (i) make, amend, interpret and enforce
           all appropriate rules and regulations for the administration of this
           Agreement and (ii) decide or resolve any and all questions including
           interpretations of this Agreement, as may arise in connection with
           the Agreement.
  5.2      AGENTS. In the administration of this Agreement, the Plan
           Administrator may employ agents and delegate to them such
           administrative duties as it sees fit, (including acting through a
           duly appointed representative), and may from time to time consult
           with counsel who may be counsel to the Company.
  5.3      BINDING EFFECT OF DECISIONS. The decision or action of the Plan
           Administrator with respect to any question arising out of or in
           connection with the administration, interpretation and application of
           the Agreement and the rules and regulations promulgated hereunder
           shall be final and conclusive and binding upon all persons having any
           interest in the Agreement.
  5.4      INDEMNITY OF PLAN ADMINISTRATOR. The Company shall indemnify and hold
           harmless the members of the Plan Administrator against any and all
           claims, losses, damages, expenses or liabilities arising from any
           action or failure to act

<PAGE>

          with respect to this Agreement, except in the case of willful
          misconduct by the Plan Administrator or any of its members.
  5.5     COMPANY INFORMATION. To enable the Plan Administrator to perform its
          functions, the Company shall supply full and timely information to the
          Plan Administrator on all matters relating to the compensation of the
          Executive, the date and circumstances of the retirement, Disability,
          death or Termination of Employment of the Executive, and such other
          pertinent information as the Plan Administrator may reasonably
          require.

                                    ARTICLE 6
                           CLAIMS AND REVIEW PROCEDURE

  6.1      For all claims other than Disability benefits:

           6.1.1   CLAIMS PROCEDURE. Any individual ("Claimant") who has not
                   received benefits under this Agreement that he or she
                   believes should be paid shall make a claim for such benefits
                   as follows:

                   6.1.1.1    INITIATION - WRITTEN CLAIM. The Claimant initiates
                              a claim by submitting to the Company a written
                              claim for the benefits.
                   6.1.1.2    TIMING OF COMPANY RESPONSE. The Company shall
                              respond to such Claimant within 90 days after
                              receiving the claim. If the Company determines
                              that special circumstances require additional time
                              for processing the claim, the Company can extend
                              the response period by an additional 90 days by
                              notifying the Claimant in writing, prior to the
                              end of the initial 90-day period, that an
                              additional period is required. The notice of
                              extension must set forth the special circumstances
                              and the date by which the Company expects to
                              render its decision.
                    6.1.1.3   NOTICE OF DECISION. If the Company denies part or
                              all of the claim, the Company shall notify the
                              Claimant in writing of such denial. The Company
                              shall write the notification in a manner
                              calculated to be understood by the Claimant. The
                              notification shall set forth:

                              (a)    The specific reasons for the denial,
                              (b)    A reference to the specific provisions of
                                     this Agreement on which the denial is
                                     based,
                              (c)    A description of any additional information
                                     or material necessary for the Claimant to
                                     perfect the claim and an explanation of why
                                     it is needed,
                              (d)    An explanation of this Agreement's review
                                     procedures and the time limits applicable
                                     to such procedures, and
                              (e)    A statement of the Claimant's right to
                                     bring a civil action under ERISA Section
                                     502(a) following an adverse benefit

<PAGE>

                                     determination on review.

         6.1.2    REVIEW PROCEDURE. If the Company denies part or all of the
                  claim, the Claimant shall have the opportunity for a full and
                  fair review by the Company of the denial, as follows:

                  6.1.2.4   INITIATION - WRITTEN REQUEST. To initiate the
                            review, the Claimant, within 60 days after receiving
                            the Company's notice of denial, must file with the
                            Company a written request for review.
                  6.1.2.5   ADDITIONAL SUBMISSIONS - INFORMATION ACCESS. The
                            Claimant shall then have the opportunity to submit
                            written comments, documents, records and other
                            information relating to the claim. The Company shall
                            also provide the Claimant, upon request and free of
                            charge, reasonable access to, and copies of, all
                            documents, records and other information relevant
                            (as defined in applicable ERISA regulations) to the
                            Claimant's claim for benefits.
                  6.1.2.6   CONSIDERATIONS ON REVIEW. In considering the review,
                            the Company shall take into account all materials
                            and information the Claimant submits relating to the
                            claim, without regard to whether such information
                            was submitted or considered in the initial benefit
                            determination.
                  6.1.2.7   TIMING OF COMPANY RESPONSE. The Company shall
                            respond in writing to such Claimant within 60 days
                            after receiving the request for review. If the
                            Company determines that special circumstances
                            require additional time for processing the claim,
                            the Company can extend the response period by an
                            additional 60 days by notifying the Claimant in
                            writing, prior to the end of the initial 60-day
                            period, that an additional period is required. The
                            notice of extension must set forth the special
                            circumstances and the date by which the Company
                            expects to render its decision.
                  6.1.2.8   NOTICE OF DECISION. The Company shall notify the
                            Claimant in writing of its decision on review. The
                            Company shall write the notification in a manner
                            calculated to be understood by the Claimant. The
                            notification shall set forth:

                            (a)     The specific reasons for the denial,
                            (b)     A reference to the specific provisions of
                                    this Agreement on which the denial is based,
                            (c)     A statement that the Claimant is entitled to
                                    receive, upon request and free of charge,
                                    reasonable access to, and copies of, all
                                    documents, records and other information
                                    relevant (as defined in applicable ERISA
                                    regulations) to the Claimant's claim for
                                    benefits, and
                            (d)     A statement of the Claimant's right to bring
                                    a civil action under ERISA Section 502(a).

<PAGE>

6.2      For Disability claims:
  6.2.1   CLAIMS PROCEDURES. Any individual ("Claimant") who has not received
          benefits under this Agreement that he or she believes should be paid
          shall make a claim for such benefits as follows:

           6.2.1.2   INITIATION - WRITTEN CLAIM. The Claimant initiates a claim
                     by submitting to the Company a written claim for the
                     benefits.
           6.2.1.3   TIMING OF COMPANY RESPONSE. The Company shall notify the
                     Claimant in writing or electronically of any adverse
                     determination as set out in this Section.
           6.2.1.4   NOTICE OF DECISION. If the Company denies part or all of
                     the claim, the Company shall notify the Claimant in writing
                     of such denial. The Company shall write the notification in
                     a manner calculated to be understood by the Claimant. The
                     notification shall set forth:

                     (a)    The specific reasons for the denial,
                     (b)    A reference to the specific provisions of this
                            Agreement on which the denial is based, (c) (c) A
                            description of any additional information or
                            material necessary for the Claimant to perfect the
                            claim and an explanation of why it is needed,
                     (d)    An explanation of the Agreement's review procedures
                            and the time limits applicable to such procedures,
                     (e)    A statement of the Claimant's right to bring a civil
                            action under ERISA Section 502(a) following an
                            adverse benefit determination on review,
                     (f)    [Seess.2560.503-1(g)(v)] Any internal rule,
                            guideline, protocol, or other similar criterion
                            relied upon in making the adverse determination, or
                            a statement that such a rule, guideline, protocol,
                            or other similar criterion was relied upon in making
                            the adverse determination and that the Claimant can
                            request and receive free of charge a copy of such
                            rule, guideline, protocol or other criterion from
                            the Company, and
                     (g)    If the adverse benefit determination is based on a
                            medical necessity or experimental treatment or
                            similar exclusion or limit, either an explanation of
                            the scientific or clinical judgment for the
                            determination, applying the terms of this Agreement
                            to the Claimant's medical circumstances, or a
                            statement that such explanation will be provided
                            free of charge upon request.

           6.2.1.5   TIMING OF NOTICE OF DENIAL/EXTENSIONS. The Company shall
                     notify the Claimant of denial of benefits in writing or
                     electronically not later than 45 days after receipt of the
                     claim by the Company. The Company may elect to extend
                     notification by

<PAGE>

                    two 30-day periods subject to the following requirements:

                     (a)    For the first 30-day extension, the Company shall
                            notify the Claimant (1) of the necessity of the
                            extension and the factors beyond the Company's
                            control requiring an extension; (2) prior to the end
                            of the initial 45-day period; and (3) of the date by
                            which the Company expects to render a decision.
                     (b)    If the Company determines that a second 30-day
                            extension is necessary based on factors beyond the
                            Company's control, the Company shall follow the same
                            procedure in (a) above, with the exception that the
                            notification must be provided to the Claimant before
                            the end of the first 30-day extension period.
                     (c)    For any extension provided under this section, the
                            Notice of Extension shall specifically explain the
                            standards upon which entitlement to a benefit is
                            based, the unresolved issues that prevent a decision
                            on the claim, and the additional information needed
                            to resolve those issues. The Claimant shall be
                            afforded 45 days within which to provide the
                            specified information.

  6.2.2   REVIEW PROCEDURES - DENIAL OF BENEFITS. If the Company denies part or
          all of the claim, the Claimant shall have the opportunity for a full
          and fair review by the Company of the denial, as follows:

          6.2.2.1    INITIATION OF APPEAL. Within 180 days following notice of
                     denial of benefits, the Claimant shall initiate an appeal
                     by submitting a written notice of appeal to Company.
          6.2.2.2    SUBMISSIONS ON APPEAL - INFORMATION ACCESS. The Claimant
                     shall be allowed to provide written comments, documents,
                     records, and other information relating to the claim for
                     benefits. The Company shall provide to the Claimant, upon
                     request and free of charge, reasonable access to, and
                     copies of, all documents, records, and other information
                     relevant (as defined in applicable ERISA regulations) to
                     the Claimant's claim for benefits.
           6.2.2.3   ADDITIONAL COMPANY RESPONSIBILITIES ON APPEAL. On appeal,
                     the Company shall:

                     (a)    [See ss.2560.503-l(h)(3)(i)-(v)] Take into account
                            all materials and information the Claimant submits
                            relating to the claim, without regard to whether
                            such information was submitted or considered in the
                            initial benefit determination;
                     (b)    Provide for a review that does not afford deference
                            to the initial adverse benefit determination and
                            that is conducted by an appropriate named fiduciary
                            of the Company who is neither the individual who
                            made the adverse benefit

<PAGE>

                   determination that is the subject of the appeal, nor the
                   subordinate of such individual;
            (c)    In deciding an appeal of any adverse benefit determination
                   that is based in whole or in part on a medical judgment,
                   including determinations with regard to whether a
                   particular treatment, drug, or other item is experimental,
                   investigational, or not medically necessary or appropriate,
                   consult with a health care professional who has appropriate
                   training and experience in the field of medicine involved in
                   the medical judgment;
            (d)    Identify medical or vocational experts whose advise was
                   obtained on behalf of the Company in connection with a
                   Claimant's adverse benefit determination, without regard to
                   whether the advice was relied upon in making the benefit
                   determination; and
            (e)    Ensure that the health care professional engaged for purposes
                   of a consultation under subsection (c) above shall be an
                   individual who was neither an individual who was consulted in
                   connection with the adverse benefit determination that is the
                   subject of the appeal, nor the subordinate of any such
                   individual.

  6.2.2.4   TIMING OF NOTIFICATION OF BENEFIT DENIAL - APPEAL DENIAL. The
            Company shall notify the Claimant not later than 45 days after
            receipt of the Claimant's request for review by the Company, unless
            the Company determines that special circumstances require an
            extension of time for processing the claim. If the Company
            determines that an extension is required, written notice of such
            shall be furnished to the Claimant prior to the termination of the
            initial 45-day period, and such extension shall not exceed 45 days.
            The Company shall indicate the special circumstances requiring an
            extension of time and the date by which the Company expects to
            render the determination on review.

  6.2.2.5   CONTENT OF NOTIFICATION OF BENEFIT DENIAL. The Company shall provide
            the Claimant with a notice calculated to be understood by the
            Claimant, which shall contain:

            (a)    The specific reason or reasons for the adverse determination;
            (b)    Reference to the specific plan provisions on which the
                   benefit determination is based;
            (c)    A statement that the Claimant is entitled to receive, upon
                   request and free of charge, reasonable access to, and copies
                   of all documents, records, and other relevant information (as
                   defined in applicable ERISA regulations);
            (d)    A statement of the Claimant's right to bring an action under

<PAGE>

                   ERISA Section 502(a);
            (e)    [Seess.2560.503-l(j)(5)] Any internal rule, guideline,
                   protocol, or other similar criterion relied upon in making
                   the adverse determination, or a statement that such a rule,
                   guideline, protocol, or other similar criterion was relied
                   upon in making the adverse determination and that the
                   Claimant can request and receive free of charge a copy of
                   such rule, guideline, protocol or other criterion from the
                   Company;
            (f)    If the adverse benefit determination is based on a medical
                   necessity or experimental treatment or similar exclusion or
                   limit, either an explanation of the scientific or clinical
                   judgment for the determination, applying the terms of this
                   Agreement to the Claimant's medical circumstances, or a
                   statement that such explanation will be provided free of
                   charge upon request; and
            (g)    The following statement: "You and your Company may have other
                   voluntary alternative dispute resolution options such as
                   mediation. One way to find out what may be available is to
                   contact your local U.S. Department of Labor Office and your
                   state insurance regulatory agency."

                                    ARTICLE 7
                   AMENDMENT AND TERMINATION OF THE AGREEMENT

  7.1     AMENDMENT AND TERMINATION. Subject to Article 4, prior to the
          commencement of benefit payments under this Agreement, the Company
          reserves the right to amend or terminate this Agreement at any time by
          the action of the Board.

                                    ARTICLE 8
                                  MISCELLANEOUS

  8.1     UNSECURED GENERAL CREDITOR. The Executive and the Executive's
          Beneficiaries, successors and assigns shall have no legal or equitable
          rights, interests or claims in any property or assets of the Company.
          Any and all of the Company's assets shall be, and remain, the general,
          unpiedged unrestricted assets of the Company. The Company's obligation
          under the Agreement shall be merely that of an unfunded and unsecured
          promise to pay money in the future.
  8.2     NOT A CONTRACT OF EMPLOYMENT. The terms and conditions of this
          Agreement shall not be deemed to constitute a contract of employment
          between the Company and the Executive. Such employment is hereby
          acknowledged to be an "at will" employment relationship that can be
          terminated at any time for any reason, with or without cause, unless
          expressly provided in a written employment agreement.

<PAGE>

          Nothing in this Agreement shall be deemed to give a Executive the
          right to be retained in the service of the Company or to interfere
          with the right of the Company to discipline or discharge the Executive
          at any time.
  8.3     PARTICIPATION IN OTHER PLANS. Nothing herein contained shall be
          construed to alter, abridge, or in any manner affect the rights and
          privileges of the Executive to participate in and be covered by any
          pension, profit sharing, group insurance, bonus or similar employee
          plans which the Company may now or hereafter maintain.
  8.4     ALIENABILITY. Neither the Executive nor any Beneficiary under this
          Agreement shall have any power or right to transfer, assign,
          anticipate, hypothecate, mortgage, commute, modify, or otherwise
          encumber in advance any of the benefits payable hereunder, nor shall
          any of said benefits be subject to seizure for the payment of any
          debts, judgments, alimony, or separate maintenance owed by the
          Executive or the Executive's Beneficiary or any of them, to be
          transferable by operation of law in the event of bankruptcy,
          insolvency, or otherwise. In the event the Executive or any
          Beneficiary attempts assignment, commutation, hypothecation, transfer,
          or disposal of the benefit hereunder, the Company's liabilities shall
          forthwith cease and terminate.
  8.5     SUCCESSORS. The provisions of this Agreement shall bind and inure to
          the benefit of the Company and its successors and assigns and the
          Executive and the Executive's Beneficiary.
  8.6     REORGANIZATION. The Company shall not merge or consolidate into or
          with another corporation, or reorganize, or sell substantially all of
          its assets to another corporation, firm, or person unless and until
          such succeeding or continuing corporation, firm, or person agrees to
          assume and discharge the obligations of the Company under this
          Agreement. Upon the occurrence of such event, the term "Company" as
          used in this Agreement shall be deemed to refer to such succeeding or
          continuing company, firm, or person.
  8.7     INTERPRETATION. Wherever the fulfillment of the intent and purpose of
          this Agreement requires, and the context will permit, the use of the
          masculine gender includes the feminine and use of the singular
          includes the plural.
  8.8     ALTERNATIVE ACTION. In the event it shall become impossible for the
          Company or the Plan Administrator to perform any act required by this
          Agreement, the Company or Plan Administrator may in its discretion
          perform such alternative act as most nearly carries out the intent and
          purpose of this Agreement and is in the best interests of the Company.
  8.9     APPLICABLE LAW. Subject to ERISA, the provisions of this Agreement
          shall be construed and interpreted in accordance with the laws of the
          state of Pennsylvania, without regard to its conflict of law
          principles.

<PAGE>

  8.10    HEADINGS. Article and section headings are for convenient reference
          only and shall not control or affect the meaning or construction of
          any of its provisions.
  8.11    FURNISHING INFORMATION. The Executive or the Executive's Beneficiary
          will cooperate with the Plan Administrator by furnishing any and all
          information requested by the Plan Administrator and take such other
          actions as may be requested in order to facilitate the administration
          of the Agreement and the payments of benefits hereunder, including but
          not limited to taking such physical examinations as the Plan
          Administrator may deem necessary.
  8.12    VALIDITY. In case any provision of this Agreement shall be illegal or
          invalid for any reason, said illegality or invalidity shall not affect
          the remaining parts hereof, but this Agreement shall be construed and
          enforced as if such illegal and invalid provision has never been
          inserted herein.
  8.13    NOTICE. Any notice or filing required or permitted to be given to the
          Plan Administrator under this Agreement shall be sufficient if in
          writing and handdelivered, or sent by registered or certified mail, to
          the address below:

                        198 E. Tioga St.
                        Tunkhannock, PA
                        18657

          Such notice shall be deemed given as of the date of delivery or, if
          delivery is made by mail, as of the date shown on the postmark or the
          receipt for registration or certification.

          Any notice or filing required or permitted to be given to the
          Executive under this Agreement shall be sufficient if in writing and
          hand-delivered, or sent by mail, to the last known address of the
          Executive.

  8.14    SIGNED COPIES. This Agreement may be executed in any number of
          counterparts, each of which shall be deemed to be an original, and
          such counterparts taken together shall constitute one (1) and the same
          instrument.

          IN WITNESS WHEREOF, the Company and the Executive have caused this
  Agreement to be duly executed as of the Effective Date above.

EXECUTIVE                                    GRANGE NATIONAL BANK

_______________                              By: /S/SALLY A. STEELE
                                             Sally A. Steele
                                                   As its Secretary<PAGE>
EXHIBIT 10.3

                  LICENSE AND COLLABORATIVE RESEARCH AGREEMENT

         This Agreement is entered into as of October 1, 1992, by and between
Albert Einstein College of Medicine of Yeshiva University, a Division of Yeshiva
University, a corporation organized and existing under the laws of the State of
New York having an office and place of business at 1300 Morris Park Avenue,
Bronx, New York 10461 ("AECOM") and Molecular Geriatrics, Inc., a corporation
organized and existing under the laws of the State of Delaware, having an office
and place of business at 1117 South Milwaukee Avenue, Suite B-12, Libertyville,
Illinois 60048 ("licensee").

                                    STATEMENT
                                   -----------

         AECOM, through Dr. Peter Davies, has been and now is engaged in
research at AECOM relating to Alzheimer's disease, has developed and acquired
substantial expertise and knowhow in this field and desires to continue its
research in this field in collaboration with Licensee. Licensee has expertise
and research capabilities relating to nucleic acid and protein sequencing,
generation of monoclonal and polyclonal antibodies, gene cloning, etc., is in
the business of developing and commercializing biological and medical products,
and desires to acquire a license from AECOM as to AECOM's existing research,
expertise, knowhow and patent rights relating to Alzheimer's disease
therapeutics developed by Dr. Davies at AECOM, and as to AECOM's future
research, expertise, knowhow and patent rights which result from the
collaboration between AECOM, through Dr. Davies, and Licensee under this
Agreement.

         NOW, THEREFORE, in consideration of the mutual covenants herein
contained and other good and valuable consideration, the receipt of which is
hereby acknowledged, AECOM and Licensee agree as follows:

1.    DEFINITIONS

         1.01    "Field" means therapeutics for Alzheimer's disease and
                 precursor or related conditions, including any applications in
                 other neurodegenerative diseases derived from the results of
                 the research done under this Agreement. The diagnosis of
                 Alzheimer's disease and precursor or related conditions is
                 specifically excluded from the Field.
         1.02     "Alzheimer Therapeutic Knowhow" means all technology,
                  inventions, technical information, biological materials and
                  the like, whether patentable or not, discovered, invented or
                  developed by Dr. Davies or the Staff, or by Licensee or by any
                  combination of Dr. Davies, Staff, or Licensee, all pursuant to
                  this Agreement, which relate to the Field, and also shall
                  include technology, inventions, technical information,
                  biological materials and the like, whether patentable or not,
                  discovered, invented or developed by Dr. Davies and Staff
                  relating to the Field on or before the effective date of this
                  Agreement as to which AECOM has the right to grant a license
                  to Licensee.

<PAGE>

         1.03     "Alzheimer Therapeutic Patents" means all U.S. and foreign
                  patent applications and patents owned or controlled by AECOM
                  or by Licensee, or by both AECOM and Licensee jointly, which
                  relate to the Field and which are based on inventions made by
                  Dr. Davies, by the Staff, or by Licensee or by any combination
                  thereof, all pursuant to this Agreement, including all U.S.
                  and foreign patent applications and patents covering Alzheimer
                  Therapeutic Knowhow. Appendix A is a listing of all U.S. and
                  foreign patent applications and patents which are currently
                  included in the definition of Alzheimer Therapeutic Patents,
                  which list shall be updated from time to time by Licensee and
                  AECOM within thirty (30) days of filing a new patent
                  application.

         1.04     "Staff' means AECOM employees who are identified by AECOM from
                  time to time during the term of this Agreement as working
                  under the supervision of Dr. Davies in his laboratory in the
                  Field of this Agreement.

         1.05    "Licensed Product" means any therapeutic product or treatment
                 method, the manufacture, use or sale of which involves the use
                 of Alzheimer Therapeutic Knowhow, or is covered by a claim of
                 an Alzheimer Therapeutic Patent.

         1.06    "Net Proceeds" means the total consideration received by
                 Licensee in any form from any third party or parties for a
                 sublicense, or other right, license, privilege or immunity to
                 make, have made, use, sell or otherwise dispose of a Licensed
                 Product.

         1.07    "Net  Sales"  means  the  total  consideration  received  by
                 Licensee  and/or  Subsidiaries  in any  form  from  sales of
                 Licensed  Products by Licensee and/or  Subsidiaries to third
                 parties less transportation charges, sales taxes, use taxes,
                 excise  taxes,  value added taxes,  customs  duties or other
                 imposts,  normal and customary  quantity and cash discounts,
                 and allowances and credits on account of rejection or return
                 of  Licensed  Products  or on account of  retroactive  price
                 reductions.

         1.08    "Subsidiary" of Licensee shall mean a corporation or other
                 business entity controlled by, controlling or under common
                 control with. Licensee. For this purpose, control of a
                 corporation or other business entity shall mean direct or
                 indirect beneficial ownership of fifty percent (50%) or more of
                 the voting interest in, or a fifty percent (50%) or greater
                 interest in the equity of, such corporation or other business
                 entity, or the maximum percentage that a foreign investor may
                 own, if equal to or less than fifty percent (50%), pursuant to
                 local laws, customs or regulations of any country, but such
                 corporation, or other business entity shall be deemed to be a
                 Subsidiary for only so long as such ownership or control
                 exists.

<PAGE>

2. . SCOPE OF AGREEMENT

         2.01     As more specifically set forth in Article 4, this Agreement
                  initially contemplates a transfer of existing Alzheimer
                  Therapeutic Knowhow from AECOM to Licensee. Pursuant to such
                  initial transfer and continuing collaboration thereafter, it
                  is contemplated that Licensee will determine the amino add
                  sequence of proteins and base sequence of nucleic acids,
                  generate monoclonal antibodies, done and express and assess
                  biological and therapeutic activity of proteins, all related
                  to the Field of this Agreement.

         2.02     In addition, AECOM and Licensee will engage in a collaborative
                  research project ("Research Project") directed to the Field
                  and funded by Licensee, which collaboration is contemplated to
                  include:

                  a.       development by Licensee of therapeutics based on
                           specific materials provided by AECOM; and

                  b.       other related research and development related to the
                           development by Licensee of therapeutics for
                           Alzheimer's disease.

3.    AECOM AGREEMENTS WITH THIRD PARTIES

         3.01     Licensee acknowledges that AECOM and Dr. Davies are performing
                  research under Research Grant No. R37-MH38623 entitled "Aging
                  and Dementia Cholinergic Neuron Biochemistry" of the National
                  Institutes of Health ("NIH"); Grant No. P01 AG 06803 entitled
                  "Fundamental Studies of Alzheimer's Disease, and P01MH47667
                  entitled "Mechanisms of HIV-Associated CNS Dysfunction in
                  Pediatric AIDS" during the term of this Agreement; that all
                  rights reserved to NIH and the United States Government as a
                  result of these grants shall remain so reserved and shall in
                  no way be affected by this Agreement; and that AECOM and Dr.
                  Davies are obligated under these grants provided, however,
                  that AECOM and Dr. Davies will take all necessary action to
                  secure for Licensee exclusive rights to Licensed Products to
                  the extent permitted under 35 U.S.C. Sec. 202.

         3.02     AECOM has granted diagnostic rights to certain knowhow and
                  patent rights relating to Alzheimer's Disease developed by Dr.
                  Davies and others at AECOM to Abbott Laboratories. Those
                  rights shall not be affected in any way by this Agreement, and
                  AECOM's fulfillment of its obligations to Abbott Laboratories
                  shall not constitute a breach of this Agreement.
<PAGE>

4.    STATEMENT OF WORK

         4.01     Dr. Davies and the Staff, with the cooperation of AECOM, will
                  use their best efforts to transfer, as soon as possible
                  following execution of this Agreement, existing Alzheimer
                  Therapeutic Knowhow from AECOM to Licensee in a manner
                  consistent with Licensee's objective of developing
                  therapeutics for Alzheimer's disease. Specific projects to be
                  undertaken by AECOM and funded by Licensee are outlined in
                  Appendix B.

         4.02     Thereafter, Licensee will use its best efforts to accomplish
                  the following contemplated tasks:

                    a.   development  of  products  designated  to  prevent  the
                         formation  of  lesions   associated  with   Alzheimer's
                         disease;

                    b.   test the effect of such  products  in vivo and in vitro
                         to determine toxicity and efficacy;

                    c.   determine the biological  basis of the activity of such
                         products; and

                    d.   determine  the  optimum   method  for   production  and
                         delivery or inducing the endogenous  production of such
                         products.

                  The parties recognize and agree that the foregoing tasks may
                  be changed, altered or modified as the research and
                  development proceeds under this Agreement to achieve the
                  objectives of this Agreement.

         4.03     During the Research Project and throughout the term of this
                  Agreement, Dr. Davies and the Licensee will regularly exchange
                  information, including Alzheimer Therapeutic Knowhow, relating
                  to the Field and the status of the research and progress made
                  and results obtained on the development of a therapeutic for
                  Alzheimer's disease. On a timely basis, AECOM will provide
                  Licensee with information developed by Dr. Davies and the
                  Staff regarding research and developments relating to the
                  Field.

5.    ALZHEIMER THERAPEUTIC KNOWHOW AND PATENTS

         5.01     All Alzheimer Therapeutic Knowhow, including all inventions,
                  discoveries and developments, whether or not patentable, which
                  are made at AECOM solely by Dr. Davies and the Staff during
                  the term of this Agreement will be owned solely by AECOM. All
                  Alzheimer Therapeutic Knowhow, including all inventions,
                  discoveries and developments, whether or not patentable, which
                  are made jointly by Dr. Davies or the Staff and Licensee

<PAGE>

                  during the course of the Research Project and throughout the
                  term of this Agreement will be owned jointly by AECOM and
                  Licensee. All Alzheimer Therapeutic Knowhow, irrespective of
                  the ownership thereof as between the parties, is subject to
                  Licensee's license granted pursuant to the terms and
                  conditions of this Agreement.

         5.02     During the term of this Agreement, AECOM, through Dr. Davies
                  and the Staff, will promptly disclose to Licensee all
                  Alzheimer Therapeutic Knowhow conceived, discovered, invented
                  or developed at AECOM by Dr. Davies and the Staff, solely or
                  jointly with licensee. On any significant development made
                  relative to Alzheimer Therapeutic Knowhow and/or Licensed
                  Products, whether made by Licensee, AECOM, or jointly by
                  Licensee and AECOM, Licensee shall determine whether a patent
                  application should be prepared and filed in view of Licensee's
                  best business judgment. Following such determination by
                  Licensee that a patent application should be prepared and
                  filed, AECOM will select patent counsel acceptable to
                  Licensee. Licensee will pay the cost of preparing, filing,
                  prosecuting and maintaining U.S. and foreign parent
                  applications and patents. AECOM will keep Licensee fully
                  informed concerning such applications and patents and will
                  consult with Licensee concerning the prosecution of such
                  applications. AECOM will file applications for patents in at
                  least the United States, Canada, Japan, Australia, Sweden,
                  Israel and all members of the European Patent Convention.
                  AECOM, Dr. Davies and the Staff will fully cooperate with
                  Licensee in preparing, filing, prosecuting and maintaining
                  such applications and patents relating to Alzheimer
                  Therapeutic Knowhow. Licensee may, upon reasonable notice to
                  AECOM, decide to discontinue paying the expenses associated
                  with any particular application or patent. If Licensee decides
                  to discontinue paying such expenses, AECOM may pay such
                  expenses. Licensee shall retain no further rights in any
                  application or patent for which Licensee decides to
                  discontinue paying such expenses and AECOM assumes such
                  responsibility. Similarly, Licensee will keep Dr. Davies and
                  AECOM fully informed as to all Alzheimer Therapeutic Knowhow
                  conceived, discovered, invented or developed by Licensee and
                  the status of Licensee's efforts to obtain patent protection
                  thereon.

6.    LICENSE GRANT

         6.01     Subject to the rights, if any, of the NIH, AECOM grants to
                  Licensee and Subsidiaries a worldwide, exclusive license, with
                  the right by Licensee to grant sublicenses, under Alzheimer
                  Therapeutic Knowhow, whether existing or developed in the
                  future, owned by AECOM, solely or jointly with Licensee, to
                  make, have made, use and sell Licensed Products. Licensee will

<PAGE>

                  not grant any sublicense under Alzheimer Therapeutic Knowhow
                  unless it first receives the prior written consent of AECOM,
                  which consent will not be reasonably withheld.

         6.02     Subject to the rights, if any, of the NIH, AECOM grants to
                  Licensee and Subsidiaries a worldwide, exclusive license, with
                  the right by Licensee to grant sublicenses, under Alzheimer
                  Therapeutic Patents owned by AECOM, solely or jointly with
                  licensee, to make, have made, use and sell licensed Products.
                  Licensee will not grant any sublicense under Alzheimer
                  Therapeutic Patents unless it first receives the prior written
                  consent of AECOM, which consent will not be unreasonably
                  withheld.

         6.03     Notwithstanding the exclusive rights granted to Licensee
                  pursuant to paragraphs 6.01 and 6.02, AECOM shall retain the
                  right to make and use Licensed Products in its own
                  laboratories for scientific purposes and for continued
                  research. Further, with the consent of Licensee, which consent
                  will not be unreasonably withheld, AECOM shall have the right
                  to make available to other scientific institutions and
                  researchers small quantities of biological materials solely
                  for scientific and research purposes covered under Alzheimer's
                  Therapeutic Knowhow and developed in Dr. Davies' laboratory,
                  provided this is done under a confidentiality agreement
                  approved by Licensee.

         6.04     Nothing contained in this Agreement shall be construed or
                  interpreted as a grant, by implication or otherwise, of any
                  license except as expressly specified in Paragraphs 6.01 and
                  6.02 hereof.

7.    CONFIDENTIALITY

         7.01     Nothing herein contained shall preclude AECOM from making
                  required reports or disclosures to the NIH. Further, Licensee
                  understands and acknowledges that AECOM has previously
                  published existing Alzheimer Therapeutic Knowhow developed
                  prior to the effective date of this Agreement.

         7.02     Subject to the reporting requirements and prior publications
                  of Paragraph 7.01 hereof and the future rights of publication
                  set forth in paragraph 7.04 hereof, AECOM and Licensee will
                  retain in confidence Alzheimer Therapeutic Knowhow owned by
                  AECOM, by Licensee or jointly by AECOM and Licensee which is
                  developed during the term of this Agreement; and neither AECOM
                  nor Licensee will disclose any such Alzheimer Therapeutic
                  Knowhow to a third party without the consent of the other.
                  Licensee shall have the right to disclose Alzheimer
                  Therapeutic Knowhow on a confidential basis for commercial
                  purposes subject to AECOM's approval, which approval will not
                  be unreasonably withheld.
<PAGE>

         7.03     During the term of this Agreement, it is contemplated that
                  Licensee will disclose to AECOM proprietary and confidential
                  technology, inventions, technical information, biological
                  materials and the like which are owned or controlled by
                  Licensee and which relate to or will be useful in the
                  collaborations contemplated pursuant to paragraph 2 of this
                  Agreement ("Licensee Confidential Information"). Licensee
                  initially will disclose all Licensee Confidential Information
                  in writing (or promptly confirm the oral disclosure thereof in
                  writing) and will designate any such Licensee Confidential
                  Information with an appropriate notation of confidentiality
                  (e.g., "Licensee Confidential Information"), AECOM agrees to
                  retain such Licensee Confidential Information in confidence,
                  subject to paragraph 7.05 hereof, and not to disclose any such
                  Licensee Confidential Information to a third party without the
                  prior written consent of Licensee.

         7.04     Notwithstanding the provisions of paragraph 7.02, AECOM will
                  be free to publish scientific results relating to the Field in
                  scientific journals, provided, however, that any manuscript
                  containing such scientific results will not contain Licensee
                  Confidential Information. Further, AECOM will supply to
                  Licensee a copy of any such manuscript prior to its submission
                  for publication, so that licensee may evaluate such manuscript
                  and determine whether it contains patentable subject matter
                  relating to the Field on which a patent application should be
                  filed by Licensee pursuant to paragraph 5.02 or contains
                  Licensee Confidential Information which is owned solely by
                  Licensee. At Licensee's request, AECOM initially will delay
                  submission of the manuscript in order to enable Licensee to
                  prepare and file a patent application on any such. patentable
                  subject matter and will cooperate with Licensee in deleting
                  from any such manuscript Licensee Confidential Information. In
                  implementation of the foregoing, within thirty (30) days after
                  receipt by Licensee of a proposed manuscript which AECOM
                  intends to publish, Licensee will notify AECOM whether or not
                  a patent application will be filed by Licensee in accordance
                  with the terms and conditions of this Agreement. If at the end
                  of such thirty (30) day period Licensee and AECOM are not able
                  to agree to a mutually acceptable date for submission of the
                  manuscript for publication to enable Licensee to implement its
                  decision to file a patent application, AECOM shall notify
                  Licensee of its intention to submit such manuscript for
                  publication without Licensee's approval and may do so thirty
                  (30) days after giving such notice. Consistent with the
                  foregoing procedure and without breach thereof, Dr. Davies
                  shall have the right to release abstracts for publications
                  relating to the Field, providing that such abstracts do not
                  contain patentable subject matter or Licensee Confidential

<PAGE>

                  Information. Licensee agrees to immediately review any such
                  abstracts for publication and promptly approve those which
                  meet the foregoing criteria.

         7.05     AECOM will keep in confidence Licensee Confidential
                  Information for a period of five (5) years after termination
                  or expiration of this Agreement, provided, however, that such
                  obligation of confidentiality will not apply to Licensee
                  Confidential Information which:

                    a.   was  known to AECOM or  generally  known to the  public
                         prior to its disclosure hereunder; or

                    b.   subsequently  becomes known to the public by some means
                         other than a breach of this Agreement; or

                    c.   is  subsequently  disclosed  to AECOM by a third  party
                         having a lawful right to make such disclosure.

                    d.   is required to be disclosed by regulation, law or court
                         order to the most  limited  extent  necessary to comply
                         therewith; or

                    e.   is independently developed by AECOM without the benefit
                         of Licensee  Confidential  Information  as evidenced by
                         AECOM's written records.

         7.06     Licensee will keep confidential all Alzheimer Therapeutic
                  Knowhow received from AECOM for a period of five (5) years
                  after termination or expiration of this Agreement, provided,
                  however, that the obligation of confidentiality will not apply
                  to Alzheimer Therapeutic Knowhow which:

                  a.       was known to Licensee or generally known to the
                           public prior to its disclosure hereunder; or

                  b.       subsequently becomes known to the public by some
                           means other than a breach of this Agreement,
                           including publication and/or laying open to
                           inspection of any patent applications or patents; or

                  c.       is subsequently disclosed to Licensee by a third
                           party having a lawful right to make such disclosure;
                           or

                  d.       is required to be disclosed by regulation, law or
                           court order to the most limited extent necessary to
                           comply therewith; or

<PAGE>

                  e.       is independently developed by Licensee without the
                           benefit of Alzheimer Therapeutic Knowhow as evidenced
                           by their written records.

8.    ROYALTIES AND PAYMENT

         8.01     Licensee will pay to AECOM four percent (4%) of the Net Sales
                  by Licensee and Subsidiaries. Licensee shall make such
                  payments for the longer of ten (10) years from First
                  Commercial Sale by Licensee of a Licensed Product or until the
                  EXPIRATION OF THE LAST ALZHEIMER Therapeutic Patent which
                  covers a Licensed Product made, used or sold by Licensee. For
                  the purpose of this paragraph, "First Commercial Sale" shall
                  occur when Licensee or a Subsidiary makes an unrestricted
                  release of a Licensed Product to its sales and marketing
                  organization in national markets through (i) the United States
                  or (ii) in a major western European country or (iii) Japan,
                  intended to reach the general market for the Licensed Product.

         8.02     Licensee will pay to AECOM thirty percent (30%) of Net
                  Proceeds for so long as Licensee receives Net Proceeds.

         8.03     If the total market share of unauthorized third parties, using
                  Alzheimer's Therapeutic Know-How to manufacture and sell
                  products which directly compete in the market place with
                  licensed products, exceeds 10% in Brazil, India, Korea and/or
                  Taiwan, then the applicable royalties otherwise payable by
                  Licensee to AECOM pursuant to Paragraph 8.02 on Annual Net
                  Sales in the country (Brazil, India, Korea and/or Taiwan)
                  where such competition exists shall be reduced proportionally
                  by the same percentage as the market share of the unauthorized
                  third party, provided that the maximum reduction of royalty
                  shall be fifty percent (50%). Such reduced royalty shall
                  remain in effect only as long as such competition continues to
                  exist. The market share of such unauthorized third parties
                  shall be determined annually by an independent marketing
                  research firm selected and paid for by Licensee and acceptable
                  to AECOM.

         8.04     Only one royalty will be payable on Net Sales by Licensee of a
                  Licensed Product under paragraph 8.01, regardless of the
                  number of patent claims in an Alzheimer Therapeutic Patent
                  which cover such Licensed Product. If it is necessary for
                  Licensee to pay royalties to any third party in order to sell
                  Licensed Products, Licensee may offset one-half of the
                  royalties payable to third parties against royalties payable
                  to AECOM, provided that under no circumstances may payments to
                  AECOM be reduced more than fifty percent (50%) as a result of
                  such offsets.

<PAGE>

         8.05     To insure that Licensee is using its best efforts to
                  commercialize Licensed Products as soon as practicable, if
                  this Agreement is not terminated pursuant to paragraph 13.01,
                  then Licensee agrees to make the following payments;

                    (a)  If the  results  of  studies  in the next two  years on
                         classes  of  compounds  that may  modify  the action of
                         protein   expression   (i.e.   the  expression  of  the
                         abnormally   phosphorylated   paired  helical  filament
                         epitopes   associated  with   Alzheimer's   Disease  by
                         neuroblastoma  cells treated with a protein phosphatase
                         inhibitor)  result in apparent efficacy in cell culture
                         systems, and pass initial toxicity tests, licensee will
                         pay to AECOM amounts rising  incrementally from $50,000
                         per  year  to  $250,000,   in  increments  of  $50,000,
                         beginning on January 30,1999, and being payable on each
                         January 30th thereafter.  These amounts may be credited
                         against  royalties to be paid under paragraphs 8.01 and
                         8.02 during the calendar  year in which such payment is
                         made.

                    (b)  In the case in which compounds efficacious in modifying
                         the  actions  of  protein  expression  in cell  culture
                         systems  have not been found within the next two years,
                         the date for commencement of the payment obligations in
                         paragraph   (a)  will  be  delayed   by  three   years.
                         Licensee's  failure to pay royalties  under  paragraphs
                         8.01 and 8.02 or to make any of the  payments set forth
                         in paragraphs 8.05 or 8.06 shall be the equivalent of a
                         termination of this  Agreement by Licensee  pursuant to
                         paragraph 13.03.

         8.06     If Licensee does not terminate this Agreement pursuant to
                  paragraph 13.03 prior to the date the last payment is due
                  under paragraph 8.05 of this Agreement, then beginning in the
                  first calendar year after such payment is due and in each
                  calendar year thereafter, Licensee agrees to pay to AECOM
                  guaranteed minimum annual royalties (to be credited against
                  actual royalties payable pursuant to paragraphs 8.01 and 8.02)
                  during each calendar year of Two Hundred and Fifty Thousand
                  Dollars ($250,000). This guaranteed minimum annual royalty is
                  non-refundable and will be paid to AECOM in equal semi-annual
                  installments pursuant to paragraph 9.01 during each such
                  calendar year. In no event shall any difference between actual
                  royalties and minimum guaranteed royalties in any such
                  calendar year affect Licensee's obligation to pay minimum
                  guaranteed royalties in any other calendar year.

         8.07     Licensee's failure to pay royalties under paragraphs 8.01 and
                  8.02 or to make any of the payments set forth in paragraphs
                  8.05 and 8.06 shall be the equivalent of a termination of this
                  Agreement by Licensee pursuant to paragraph 13.03.

<PAGE>

9.    PAYMENT OF ROYALTIES

         9.01     Royalties due from Licensee to AECOM will be paid within
                  twenty (20) days after the end of each semi-annual period
                  during which the royalty accrued. Payment shall be accompanied
                  by a statement of the amount of Net Sales realized by
                  Licensee, the amount of Net Proceeds received by Licensee from
                  sublicensees, the amount of any deduction and the amount of
                  royalty due from Licensee to AECOM.

         9.02     Licensee shall maintain the usual books of account and records
                  showing sales of Licensed Product, Net Sales attributable to
                  such sales, amounts received from sublicensees and Net
                  Proceeds attributable thereto. Such books and records shall be
                  open to inspection by AECOM during usual business hours, by an
                  independent certified public accountant to whom Licensee has
                  no reasonable objection, for two (2) years after the calendar
                  year to which they pertain, for the purpose of verifying the
                  accuracy of the royalties paid to AECOM by Licensee pursuant
                  to this Agreement. Inspection shall be reasonably limited to
                  those manors related to Licensee's royalty obligations under
                  this Agreement.

10.   INFRINGEMENT

         10.01    Licensee shall have the right, in its sole discretion and at
                  its expense, to initiate legal proceedings in AECOM's name
                  against any infringer of an Alzheimer Therapeutic Patent owned
                  by AECOM, solely or jointly with Licensee. Any settlement or
                  recovery received from any such proceeding shall be divided
                  seventy percent (70%) to Licensee and thirty percent (30%) to
                  AECOM after Licensee deducts from any such settlement or
                  recovery its counsel fees and out-of-pocket expenses relative
                  to any such legal proceeding.

         10.02    In the event Licensee initiates or carries on legal
                  proceedings to enforce any Alzheimer Therapeutic Patent owned
                  by AECOM, solely or jointly with Licensee, against an alleged
                  infringer, AECOM shall fully cooperate with and supply all
                  assistance reasonably requested by Licensee. AECOM, at its
                  expense, shall have the right to be represented by counsel of
                  its choice in any such proceeding, provided that Licensee
                  shall have the sole right to conduct such proceeding and to
                  enter into any settlement thereof.

11.   PROHIBITION ON USE OF NAMES

         11.01    AECOM and Licensee each shall not use the name of the other
                  without prior written consent, except if the use of such name
                  is required by law, regulation or judicial order, in which

<PAGE>

                  event the party intending to use such name will promptly
                  inform the other prior to any such required use.

12.   CONSULTING AGREEMENT WITH DR. DAVIES

         12.01    Licensee and Dr. Davies and members of his staff have entered
                  into a Consulting Agreement whereby they will provide to
                  Licensee consulting services with respect to the Field, for
                  which they will be compensated directly by Licensee. Ownership
                  of any Alzheimer Therapeutic Knowhow developed or invention
                  made by Dr. Davies or his staff solely or jointly with
                  Licensee while rendering services under the Consulting
                  Agreement will be governed by paragraph 5.01 hereof and will
                  be subject to the terms and conditions of this Agreement. A
                  copy of the Consulting Agreements are annexed hereto as
                  Appendix C.

13.   Term and Termination

         13.01    This Agreement shall be subject to the successful completion
                  of a private financing by Licensee. Licensee shall notify
                  AECOM in writing of the completion of the financing. The
                  financing shall be for no less than $15 million. If Licensee
                  has not completed the financing by June 30, 1993, Agreement
                  shall terminate as of July 1, 1993 and all rights in Alzheimer
                  Therapeutic Knowhow and Alzheimer Therapeutic Patents will
                  revert to AECOM and Licensee will not use Alzheimer
                  Therapeutic Knowhow for any purposes whatsoever.

         13.02    Unless terminated earlier under other provisions hereof, this
                  Agreement will expire upon the expiration of Licensee's last
                  obligation to pay royalty hereunder.

         13.03    Licensee may terminate this Agreement anytime after thirty
                  (30) days from the execution of this Agreement and the
                  licenses granted hereunder by giving notice to AECOM sixty
                  (60) days prior to such termination. Upon such termination
                  Licensee shall be obligated to compensate AECOM for an amount
                  equal to any salary obligations undertaken by AECOM under the
                  provisions of Appendix B for a period of one year from the
                  onset of this Agreement. Upon any such termination, all rights
                  in Alzheimer Therapeutic Knowhow and Alzheimer Therapeutic
                  Patents will revert to AECOM and Licensee will not use
                  Alzheimer Therapeutic Knowhow for any purposes whatsoever.

         13.04    If either party defaults on or breaches any material condition
                  of this Agreement, the aggrieved party may serve notice upon

<PAGE>

                  the other party of the alleged default or breach. If such
                  default or breach is not remedied within sixty (60) days from
                  the date of such notice, the aggrieved party may at its
                  election terminate this Agreement. Any failure to terminate
                  hereunder shall not be construed as a waiver by the aggrieved
                  party of its right to terminate for future defaults or
                  breaches.

         13.05.   (i) Any dispute, controversy or claim arising out of or
                  relating to this Agreement, or the breach, termination or
                  invalidity thereof shall be settled by arbitration conducted
                  in New York in accordance with the then-existing rules of the
                  American Arbitration Association ("AAA"), and judgment upon
                  the award rendered by the arbitrator(s) may be entered in any
                  court having jurisdiction thereof.

                  (ii) In any arbitration pursuant to (i), the award shall be
                  rendered by a majority of the members of a Board of
                  Arbitration consisting of three members, one of whom shall be
                  appointed by each party and the third of whom, who shall be
                  the chairman of the arbitration panel, shall be appointed by
                  mutual agreement of the two arbitrators appointed by the
                  parties. In the event of failure of a party to appoint a.
                  arbitrator within thirty (30) days after the commencement of
                  the arbitration proceedings, or in the event of failure of the
                  two party appointed arbitrators to agree within sixty (60)
                  days after the commencement of the arbitration proceeding upon
                  the appointment of the third arbitrator such arbitrator shall
                  be appointed by the AAA in accordance with its then-existing
                  rules. (For this purpose, commencement or the arbitration
                  proceedings shall be the date on which a request or demand for
                  arbitration is first filed with the AAA).

         13.06    If either party becomes insolvent or makes an assignment for
                  the benefit of creditors or if proceedings for a voluntary
                  bankruptcy are instituted on behalf of either party or if
                  either party is declared bankrupt or insolvent, the other
                  party may at its election terminate this Agreement by notice
                  to the bankrupt or insolvent party.

         13.07    Termination of this Agreement by either party shall not
                  prejudice the right of AECOM to recover any royalty due at the
                  time of termination or which becomes due after termination
                  based upon rights vested prior to termination and shall not
                  prejudice any cause of action or claim of either party
                  accruing under the licenses granted herein.

14.   FORCE MAJEURE

         14.01    Each party hereto shall be relieved of its obligations
                  hereunder to the extent that fulfillment of such obligations
                  shall be prevented by acts of war, labor difficulties, riot,
                  fire flood, hurricane, windstorm, acts or defaults of common
                  carriers, governmental laws, acts, regulations, shortages of
                  materials or any other occurrence whether or not similar to
                  the foregoing beyond the reasonable control of the party
                  affected thereby.
<PAGE>

15.   AMENDMENT AND ASSIGNMENT

         15.01    This Agreement sets forth the entire understanding between
                  the parties pertaining to the subject matter hereof.

         15.02    Except as otherwise provided herein, this Agreement may not be
                  amended, supplemented or otherwise modified, except by an
                  instrument in writing signed by both parties.

         15.03    Without the prior written approval of the other party, neither
                  party may assign this Agreement except to a party acquiring
                  substantially all of the assigning party's business to which
                  this Agreement relates.

16.    MISCELLANEOUS PROVISIONS

         16.01    This Agreement shall be interpreted and construed in
                  accordance with the laws of the State of New York.

         16.02    This Agreement has been prepared jointly and shall not be
                  strictly construed against either party.

         16.03    If any term or provision of this Agreement or the application
                  thereof to any person or circumstance shall to any extent be
                  invalid or unenforceable, the remainder of this Agreement or
                  the application of such term or provision to persons or
                  circumstances other than those as to which it is held invalid
                  or unenforceable shall not be affected thereby and each term
                  and provision of this Agreement shall be valid and enforced to
                  the fullest extent permitted by law.

         16.04    Licensee agrees to indemnify AECOM, its trustees, employees
                  and agents for the cost of defense and for damages awarded, if
                  any, as a result of any claims, liabilities, suits or
                  judgments arising out of this Agreement, so long as such
                  claims, liabilities, suits, or judgments are not attributable
                  to grossly negligent or intentionally wrongful acts or
                  omissions by AECOM, its trustees, employees and agents or a
                  breach by AECOM of this Agreement.

                  This indemnity is conditioned upon AECOM's obligation to: (i)
                  advise Licensee of any claim or lawsuit, in writing promptly
                  after AECOM has received notice of said claim or lawsuit and
                  (ii) assist Licensee and its representatives in the
                  investigation and defense of any lawsuit and/or claim for
                  which indemnification is provided.
<PAGE>

         16.05    This Agreement shall not apply to other research projects or
                  collaborations conducted by Licensee, provided such research
                  projects or collaborations are conducted without the use
                  whatsoever of any of the materials supplied or produced under
                  this Agreement, Alzheimer Therapeutic Knowhow, or Alzheimer
                  Therapeutic Patents.

17.      NOTICES

         17.01    Any notice or report required or permitted hereunder shall be
                  given in writing by registered or certified mail, return
                  receipt requested, to the following addresses:

                                   Molecular Geriatrics, Inc.
                                   1117 S. Milwaukee Ave. - Suite B-l 2
                                   Libertyville, Illinois 60041

                                   Albert Einstein College of Medicine
                                   of Yeshiva University 1300 Morris Park
                                   Avenue Bronx, New York
                                   10461 Attention: Dr. Sidney Goldfischer
                                                    Office of Industrial Liaison

                                  Kenneth George, Esq.
                                  Amster, Rothstein & Ebenstein
                                  90 Park Ave. - 21st Floor
                                  New York, NY  10016

     IN WITNESS WHEREOF,  the parties have entered into this Agreement effective
AS of the day and year first above written.

                             ALBERT EINSTEIN COLLEGE OF MEDICINE
                             A DIVISION OF YESHIVA UNIVERSITY

                                   /s/ Emanuel Genn
WITNESS:                       BY __________________________
/s/ Irma Conti
_______________                TITLE Associate Dean for Business Affairs
                                     ___________________________________
2/1/93
_______________                DATE   2/1/93
                                     _______________________

                              MOLECULAR GERIATRICS, INC.

                              BY /s/ Robert Mauer
                                  __________________________
                              TITLE  Chief Operating and Financial Officer
                                     _____________________________________
                              DATE   November 20, 1992
                                     _______________________

<PAGE>

                               AMENDMENT AGREEMENT

         Albert Einstein College of Medicine of Yeshiva University, a Division
of Yeshiva University, a corporation organized and existing under the laws of
the State of New York, having an office and place of business at 1300 Morris
Park Avenue, Bronx, New York 10461 ("AECOM") and Molecular Geriatrics, Inc., a
corporation organized and existing under the laws of the State of Delaware,
having an office and place of business at 1117 South Milwaukee Avenue, Suite
B-12, Libertyville, Illinois 60048 ("Licensee"), have entered into a LICENSE AND
COLLABORATIVE RESEARCH AGREEMENT on October 1, 1992 ("AGREEMENT").

         NOW, THEREFORE, in consideration of the mutual covenants contained in
the AGREEMENT and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, AECOM and Licensee agree as
follows:

           1. The first line of the AGREEMENT is amended to read as follows:

                     "This Agreement is entered into as of July 1, 1993, by
                     and between Albert Einstein"

           2. Paragraph 13.01 of the AGREEMENT is amended to read as follows:

                     This Agreement shall be subject to the successful
                     completion of a private financing by Licensee. Licensee
                     shall notify AECOM in writing of the completion of the
                     financing. The financing shall be for no less than $10
                     Million. If Licensee has not completed the financing by
                     December 31, 1993, this Agreement shall terminate as of
                     January 1, 1994 and all rights in Alzheimer Therapeutic
                     Knowhow and Alzheimer Therapeutic Patents will revert to
                     AECOM and Licensee will not use Alzheimer Therapeutic
                     Knowhow for any purposes whatsoever.

3. The last paragraph of Appendix 3 of the AGREEMENT is amended to read as
follows:

      The budget for these project shall be a total of $2,500/month for each of
      thirty-six months beginning on July 1, 1993. Payment for each month of
      research shall be made on the first day of the month. Licensee may, at its
      discretion, make research payments on a quarterly in advance basis instead
      of a monthly basis.
<PAGE>

     IN WITNESS WHEREOF,  the parties have entered into this Amendment Agreement
effective as of July 1, 1993.

                               ALBERT EINSTEIN COLLEGE OF MEDICINE

                               OF YESHIVA UNIVERSITY, A DIVISION

                               OF YESHIVA UNIVERSITY

                                   /s/ Emanuel Genn
                               BY __________________________
/s/ Irma Conti
_______________                TITLE Associate Dean for Business Affairs
                                     ___________________________________
7/6/98
_______________                DATE   7/6/98
                                     _______________________

                              MOLECULAR GERIATRICS, INC.

WITNESS:                      BY /s/ Robert Mauer
/s/ Janet Behnke                     __________________________
________________              TITLE  Chief Operating Officer
7/9/93                               _____________________________________
________________              DATE   7/9/93
                                     _______________________

<PAGE>

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