Document:

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                                                                   EXHIBIT 10.13

                                    AGREEMENT

            AGREEMENT, effective December 9, 2001 between Commonwealth Bank (the
"Bank"), a federally chartered savings bank, and Brian C. Zwaan (the
"Executive").

                                   WITNESSETH

            WHEREAS, the Executive is presently Executive Vice President, Chief
Lending Officer of the Bank;

            WHEREAS, the Bank desires to be ensured of the Executive's continued
active participation in the business of the Bank, and the Bank desires to have
this new Agreement supersede its current agreement with the Executive dated
October 20, 1998;

            WHEREAS, in accordance with Office of Thrift Supervision ("OTS")
Regulatory Bulletin 27a, the Bank desires to enter into an agreement with the
Executive with respect to his employment by the Bank; and

            WHEREAS, in order to induce the Executive to remain in the employ of
the Bank and in consideration of the Executive's agreeing to remain in the
employ of the Bank, the parties desire to specify the terms of such employment,
including the severance benefits which shall be due the Executive by the Bank in
the event that his employment with the Bank is terminated under specified
circumstances;

            NOW THEREFORE, in consideration of the mutual agreements herein
contained, and upon the other terms and conditions hereinafter provided, the
parties hereby agree as follows:
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            1. DEFINITIONS. The following words and terms shall have the
meanings set forth below for the purposes of this Agreement:

                  (a) BASE SALARY. "Base Salary" shall mean the Executive's
annual salary exclusive of any pension or other retirement plan, profit sharing,
stock option, employee stock ownership, or other plans, benefits and privileges
given to employees and executives of the Bank.

                  (b) CAUSE. Termination by the Bank of the Executive's
employment for "Cause" shall mean termination because of personal dishonesty,
incompetence, willful misconduct, breach of fiduciary duty involving personal
profit, intentional failure to perform stated duties, willful violation of any
law, rule or regulation (other than traffic violations or similar offenses) or
final cease-and-desist order or material breach of any provision of this
Agreement.

                  (c) CHANGE IN CONTROL OF THE BANK. "Change in Control of the
Bank" shall mean a change in control of a nature that would be required to be
reported in response to Item 6(e) of Schedule 14A of Regulation 14A promulgated
under the Securities Exchange Act of 1934, as amended ("Exchange Act"), or any
successor thereto, whether or not the Bank is registered under the Exchange Act;
provided that, without limitation, such a change in control shall be deemed to
have occurred if(i) any "person" (as such term is used in Sections 13(d) and
14(d) of the Exchange Act) is or becomes the "beneficial owner" (as defined in
Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the
Bank representing 25% or more of the combined voting power of the Bank's then
outstanding securities; or (ii) during any period of two consecutive years,
individuals who at the beginning of such period constitute the Board of
Directors of the Bank cease for any reason to constitute at least a majority
thereof unless the election, or the nomination for election by stockholders, of
each new director was approved by a vote of at least two-thirds of the directors
then still in office who were directors at the beginning of the period.

                  (d) CODE. "Code" shall mean the Internal Revenue Code of 1986,
as amended.

                  (e) DATE OF TERMINATION. "Date of Termination" shall mean the
date the Executive's employment is terminated for any reason, as specified in
the Notice of Termination.

                  (f) DISABILITY. Termination by the Bank of the Executive's
employment based on "Disability" shall mean termination because of any physical
or mental impairment which qualifies the Executive for disability benefits under
the applicable long-term disability plan maintained by the Bank or any
subsidiary or, if no such plan applies, which would qualify the Executive for
disability benefits under the Federal Social Security System.

                  (g) GOOD REASON. Termination by the Executive of the
Executive's employment for "Good Reason" shall mean termination by the Executive
within one year following a Change in Control of the Bank based on:

                        (i)   Without the Executive's express written consent,
                              the failure to elect Executive Vice President,
                              Chief Lending Officer or to re-elect or to appoint
                              or to re-appoint the Executive to the offices of
                              Executive Vice President, Chief Lending Officer or
                              a material adverse change made by the Bank in the
                              Executive's functions, duties or responsibilities
                              as Executive Vice President, Chief Lending Officer
                              of the Bank as they existed immediately prior to a
                              Change in Control of the Bank;

                        (ii)  Without the Executive's express written consent, a
                              reduction by the Bank in the Executive's Base
                              Salary as the same may be increased from time to
                              time or,

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                              except to the extent permitted by Section 3(b)
                              hereof, a reduction in the package of fringe
                              benefits provided to the Executive, taken as a
                              whole;

                        (iii) The principal executive office of the Bank is
                              relocated more than 25 miles from the current
                              principal executive office or, without the
                              Executive's express written consent, either of the
                              Bank requires the Executive to be based anywhere
                              other than an area in which the Bank's principal
                              executive office is located, except for required
                              travel on business of the Bank to an extent
                              substantially consistent with the Executive's
                              present business travel obligations;

                        (iv)  Any purported termination of the Executive's
                              employment for Cause, Disability or Retirement
                              which is not effected pursuant to a Notice of
                              Termination satisfying the requirements of
                              paragraph (j) below; or

                        (v)   The failure by the Bank to obtain the assumption
                              of and agreement to perform this Agreement by any
                              successor as contemplated in Section 9 hereof.

                  (h) HIGHEST ANNUAL COMPENSATION. The Executive's "Highest
Annual Compensation" for purposes of this Agreement shall be deemed to mean the
highest level of compensation paid to the Executive by the Bank or any
subsidiary thereof during the most recent three taxable years preceding the Date
of Termination, including Base Salary (as defined in Section 1(a) hereof) and
bonuses paid to the Executive but excluding amounts relating to the vesting of
Management Recognition Plan shares.

                  (i) IRS. IRS shall mean the Internal Revenue Service.

                  (j) NOTICE OF TERMINATION. Any purported termination of the
Executive's employment by the Bank for any reason, including without limitation
for Cause, Disability or Retirement, or by the Executive for any reason,
including without limitation for Good Reason, shall be communicated by written
"Notice of Termination" to the other party hereto. For purposes of this
Agreement, a "Notice of Termination" shall mean a dated notice which (i)
indicates the specific termination provision in this Agreement relied upon, (ii)
sets forth in reasonable detail the facts and circumstances claimed to provide a
basis for termination of the Executive's employment under the provision so
indicated, (iii) specifies a Date of Termination, which shall be not less than
thirty (30) nor more than ninety (90) days after such Notice of Termination is
given, except in the case of the Bank's termination of the Executive's
employment for Cause, which shall be effective immediately, and (iv) is given in
the manner specified in Section 10 hereof.

                  (k) RETIREMENT. "Retirement" shall mean voluntary termination
by the Executive in accordance with the Bank's retirement policies, including
early retirement, generally applicable to their salaried employees.

                  (l) GENDER NEUTRAL PRONOUN USAGE. The use of the masculine
pronoun shall be deemed to include the feminine pronoun throughout this
Agreement.

            2. TERM OF EMPLOYMENT.

                  (a) The Bank hereby employs the Executive as Executive Vice
President, Chief Lending Officer and the Executive hereby accepts said
employment and agrees to render such services to the Bank on the terms and
conditions set forth in this Agreement. The term of employment under this
Agreement shall be for

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three years, commencing on the effective date of this Agreement and, upon
approval of the Board of Directors of the Bank, shall extend for an additional
year on each annual anniversary of the effective date of this Agreement such
that at any time the remaining term of this Agreement shall be from two to three
years. Prior to the first annual anniversary of the effective date of this
Agreement and each annual anniversary thereafter, the Board of Directors of the
Bank shall consider and review (taking into account all relevant factors,
including the Executive's performance hereunder) an extension of the term of
this Agreement, and the term shall continue to extend each year if the Board of
Directors approves such extension unless the Executive gives written notice to
the Bank of the Executive's election not to extend the term, with such written
notice to be given not less than thirty (30) days prior to any such anniversary
date. If the Board of Directors elects not to extend the term, it shall give
written notice of such decision to the Executive not less than thirty (30) days
prior to any such anniversary date. If any party gives timely notice that the
term will not be extended as of any annual anniversary date, then this Agreement
shall terminate at the conclusion of its remaining term. References herein to
the term of this Agreement shall refer both to the initial term and successive
terms.

                  (b) During the term of this Agreement, the Executive shall
perform such executive services for the Bank as may be consistent with his
titles and from time to time assigned to him by the Bank's Board of Directors.

            3. COMPENSATION AND BENEFITS.

                  (a) The Bank shall compensate and pay Executive for his
services during the term of this Agreement at a minimum Base Salary of $200,000
per year, which may be increased from time to time in such amounts as may be
determined by the Board of Directors of the Bank and may not be decreased
without the Executive's express written consent. In addition to his Base Salary,
the Executive shall be entitled to receive during the term of this Agreement
such bonus payments as may be determined by the Board of Directors of the Bank.

                  (b) During the term of this Agreement, the Executive shall be
entitled to participate in and receive the benefits of any pension or other
retirement benefit plan, profit sharing, stock option, employee stock ownership,
or other plans, benefits and privileges given to employees and executives of the
Bank, to the extent commensurate with his then duties and responsibilities, as
fixed by the Board of Directors of the Bank. The Bank shall not make any changes
in such plans, benefits or privileges which would adversely affect the
Executive's rights or benefits thereunder, unless such change occurs pursuant to
a program applicable to all executive officers of the Bank and does not result
in a proportionately greater adverse change in the rights of or benefits to the
Executive as compared with any other executive officer of the Bank. Nothing paid
to the Executive under any plan or arrangement presently in effect or made
available in the future shall be deemed to be in lieu of the salary payable to
the Executive pursuant to Section 3(a) hereof.

                  (c) During the term of this Agreement, the Executive shall be
entitled to paid annual vacation in accordance with the policies as established
from time to time by the Board of Directors of the Bank, which shall in no event
be less than four weeks per annum. The Executive shall not be entitled to
receive any additional compensation from the Bank for failure to take a
vacation, nor shall the Executive be able to accumulate unused vacation time
from one year to the next, except to the extent authorized by the Board of
Directors of the Bank.

                  (d) During the term of this Agreement, in keeping with past
practices, the Bank shall continue to provide the Executive with the use of a
Bank-owned automobile appropriate to his positions with the Bank and to pay all
costs associated with such automobile, including registration, licensing,
insurance and costs of operation.

                  (e) In the event the Executive's employment is terminated by
the Bank for any reason other than Cause, the Bank shall provide continued group
insurance (other than disability insurance unless the Executive was disabled and
was receiving disability insurance benefits prior to the Date of Termination and
other than life insurance), and health and accident insurance substantially
identical to the coverage maintained by the Bank for the Executive immediately
prior to his termination. Such coverage shall cease upon the expiration of the
remaining term of this Agreement.

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            4. EXPENSES. The Bank shall reimburse the Executive or otherwise
provide for or pay for all reasonable expenses incurred by the Executive in
furtherance of or in connection with the business of the Bank, including, but
not by way of limitation, automobile expenses described in Section 3(d) hereof,
traveling expenses, and all reasonable entertainment expenses (whether incurred
at the Executive's residence, while traveling or otherwise), subject to such
reasonable documentation and other limitations as may be established by the
Board of Directors of the Bank. If such expenses are paid in the first instance
by the Executive, the Bank shall reimburse the Executive therefor.

            5. TERMINATION.

                  (a) The Bank shall have the right, at any time upon prior
Notice of Termination, to terminate the Executive's employment hereunder for any
reason, including without limitation termination for Cause, Disability or
Retirement, and the Executive shall have the right, upon prior Notice of
Termination, to terminate his employment hereunder for any reason.

                  (b) The Executive's employment and his status as an officer of
the Bank shall terminate (i) immediately upon being given a Notice of
Termination for Cause, or (ii) on the Date of Termination for any other reason.
A Notice of Termination for other than Cause shall not affect the Executive's
right to compensation to the Date of Termination or for such other period of
time after the Date of Termination as specified in Section 5(c)(i) and (ii)
hereof, if applicable.

                  (c) (i) In the event that the Executive's employment is
terminated by the Bank for other than Cause, Disability, Retirement or the
Executive's death, or such employment is terminated by the Executive due to a
material breach of this Agreement by the Bank which has not been cured within
fifteen (15) days after a written notice of non-compliance has been given by the
Executive to the Bank, and as of the Executive's Date of Termination no Change
in Control of the Bank has occurred and no written agreement which contemplates
a Change in Control of the Bank and which still is in effect has been entered
into by the Bank and/or the Bank, then the Bank shall, subject to the provisions
of Section 6 hereof, if applicable:

                        A. pay to the Executive, in twenty-four (24) equal
                  monthly installments beginning with the first business day of
                  the month following the Date of Termination, a cash severance
                  amount equal to two (2) times that portion of the Executive's
                  Base Salary paid by the Bank as of his Date of Termination,
                  and

                        B. maintain and provide for a period ending at the
                  earlier of (i) the expiration of twenty-four (24) months from
                  the Executive's Date of Termination of(ii) the date of the
                  Executive's full-time employment by another employer (provided
                  that the Executive is entitled under the terms of such
                  employment to benefits substantially similar to those
                  described in this subparagraph (B)), at no cost to the
                  Executive, the Executive's continued participation in all
                  group insurance (other than disability insurance unless the
                  Executive was disabled and was receiving disability insurance
                  benefits prior to the Date of Termination and other than life
                  insurance), health and accident insurance, and other employee
                  benefit plans, programs and arrangements offered by the Bank
                  in which the Executive was entitled to participate immediately
                  prior to the Date of Termination (other than stock option,
                  employee stock ownership and restricted stock plans of the
                  Bank and other than defined contribution plans of the Bank).

                  (ii) In the event that the Executive's employment is
                  terminated by the Bank for other than Cause, Disability,
                  Retirement or the Executive's death, or such employment is
                  terminated by the Executive due to a material breach of this
                  Agreement by the Bank which has not

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                  been cured within fifteen (15)days after a written notice of
                  non-compliance has been given by the Executive to the Bank or
                  for Good Reason, and prior to the Executive's Date of
                  Termination there has been a Change in Control of the Bank or
                  a written agreement which contemplates a Change in Control of
                  the Bank and which still is in effect has been entered into
                  the Bank, then the Bank shall, subject to the provisions of
                  Section 6 hereof, if applicable:

                        A. pay to the Executive, within thirty (30) days
                  following the Date of Termination, a lump sum cash severance
                  amount equal to three (3) times that portion of the
                  Executive's Highest Annual Compensation paid by the Bank, and

                        B. maintain and provide for a period ending at the
                  earlier of (i) the expiration of thirty-six (36) months from
                  the Executive's Date of Termination or (ii) the date of the
                  Executive's full-time employment by another employer (provided
                  that the Executive is entitled under the terms of such
                  employment to benefits substantially similar to those
                  described in this subparagraph (B)), at no cost to the
                  Executive, the Executive's continued participation in all
                  group insurance (other than disability insurance unless the
                  Executive was disabled and was receiving disability insurance
                  benefits prior to the Date of Termination and other than life
                  insurance), health and accident insurance, and other employee
                  benefit plans, programs and arrangements offered by the Bank
                  in which the Executive was entitled to participate immediately
                  prior to the Date of Termination (other than stock option,
                  employee stock ownership and restricted stock plans of the
                  Bank and other than defined contribution plans of the Bank).

                  (d) In the event that (i) the Executive's employment is
terminated by the Bank for Cause or (ii) the Executive terminates his employment
hereunder for any reason other than Disability, Retirement, death or pursuant to
Section 5(c) hereof, the Executive shall have no right pursuant to this
Agreement to compensation or other benefits for any period after the applicable
Date of Termination.

                  (e) In the event that the Executive's employment is terminated
as a result of Disability, Retirement or the Executive's death during the term
of this Agreement, the Executive shall have no right pursuant to this Agreement
to compensation or other benefits for any period after the applicable Date of
Termination, except as provided for in Section 3(e) hereof.

            6. LIMITATION OF BENEFITS UNDER CERTAIN CIRCUMSTANCES. If the
payments and benefits pursuant to Section 5 hereof, either alone or together
with other payments and benefits which the Executive has the right to receive
from the Bank, would constitute a "parachute payment" under Section 280G of the
Code, the payments and benefits payable by the Bank pursuant to Section 5 hereof
shall be reduced, in the manner determined by the Executive, by the amount, if
any, which is the minimum necessary to result in no portion of the payments and
benefits payable by the Bank under Section 5 being non-deductible to the Bank
pursuant to Section 280G of the Code and subject to the excise tax imposed under
Section 4999 of the Code. The parties hereto agree that the payments and
benefits payable pursuant to this Agreement by the Bank to the Executive upon
termination shall be limited to a maximum of three times the Executive's "base
amount" (as defined in Section 280G(b)(3) of the Code) in accordance with OTS
Regulatory Bulletin 27a. The determination of any reduction in the payments and
benefits to be made pursuant to Section 5 shall be based upon the opinion of
independent tax counsel selected by the Bank's independent public accountants
and paid by the Bank. Such counsel shall be reasonably acceptable to the Bank
and the Executive; shall promptly prepare the foregoing opinion, but in no event
later than thirty (30) days from the Date of Termination; and may use such
actuaries as such counsel deems necessary or advisable for the purpose. Nothing
contained herein shall result in a reduction of any payments or benefits to
which the Executive may be entitled upon

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termination of employment under any circumstances other than as specified in
this Section 6, or a reduction in the payments and benefits specified in Section
5 below zero.

            7. MITIGATION; EXCLUSIVITY OF BENEFITS.

                  (a) Unless the Executive's employment is terminated for
Disability, Retirement, death or pursuant to Section 5(c)(ii) hereof, the
Executive shall be required to mitigate the amount of any payments and benefits
hereunder by seeking other employment or otherwise. In the event that the
Executive obtains other employment during the period that the Executive is
receiving payments pursuant to Section 5(c)(i)(A) hereof, the cash amounts to be
paid to the Executive pursuant thereto shall be reduced by any cash compensation
received by the Executive as a result of employment by another employer after
the Date of Termination.

                  (b) The specific arrangements referred to herein are not
intended to exclude any other benefits which may be available to the Executive
upon a termination of employment with the Bank pursuant to employee benefit
plans of the Bank or otherwise, provided, however, that any cash compensation
the Executive receives from sources other than the Bank's shall serve to reduce
the cash amount to be paid to the Executive pursuant to Section 5(c)(i)(A)
hereof.

            8. WITHHOLDING. All payments required to be made by the Bank
hereunder to the Executive shall be subject to the withholding of such amounts,
if any, relating to tax and other payroll deductions as the Bank may reasonably
determine should be withheld pursuant to any applicable law or regulation.

            9. ASSIGNABILITY. The Bank may assign this Agreement and its rights
and obligations hereunder in whole, but not in part, to any corporation, bank or
other entity with or into which the Bank may hereafter merge or consolidate or
to which the Bank may transfer all or substantially all of its assets, if in any
such case said corporation, bank or other entity shall by operation of law or
expressly in writing assume all obligations of the Bank hereunder as fully as if
it had been originally made a party hereto, but may not otherwise assign this
Agreement or its rights and obligations hereunder. The Executive may not assign
or transfer this Agreement or any rights or obligations hereunder.

            10. NOTICE. For the purposes of this Agreement, notices and all
other communications provided for in this Agreement shall be in writing and
shall be deemed to have been duly given when delivered or mailed by certified or
registered mail, return receipt requested, postage prepaid, addressed to the
respective addresses set forth below:

            To the Bank:              Secretary
                                      Commonwealth Bank
                                      2 West Lafayette Street
                                      Norristown, Pennsylvania 19401-4758

            To the Executive:         Brian C. Zwaan
                                      493 Green Hill Lane
                                      Berwyn, PA 19312

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            11. CONFIDENTIALITY. The Executive acknowledges that by virtue of
his employment hereunder, he will maintain an intimate knowledge of the
activities and affairs of the Bank, including confidential matters. As a result,
the Executive agrees to maintain the confidentiality of all confidential
information relating to the Bank during the term of employment hereunder and any
period that the Executive may be receiving payments pursuant to this Agreement,
provided that nothing in this Section 11 shall be deemed to prevent the
Executive from either (a) being employed by any other corporation, firm or
entity upon termination of the Executive's employment by the Bank as long as the
Executive does not violate the foregoing prescription, or (b) responding to
inquiries from regulatory authorities.

            12. ARBITRATION. The Executive and the Bank agree to submit to final
and binding arbitration pursuant to the rules of the American Arbitration
Association, any and all claims arising from the termination, for any reason, of
the Executive's employment by the Bank including, but not limited to:

                  (a) any and all claims for wages and benefits (including
without limitation salary, stock, commissions, royalties, license fees, health
and welfare benefits, severance pay, vacation pay, and bonuses);

                  (b) any and all claims for wrongful discharge and breach of
contract (whether express or implied), and implied covenants of good faith and
fair dealing;

                  (c) any and all claims for alleged employment discrimination
on the basis of age, race, color, religion, sex, national origin, veteran
status, disability and/or handicap, in violation of any federal, state or local
statute, ordinance, judicial precedent or executive order, including but not
limited to claims for discrimination under the following statutes: Title VII of
the Civil Rights Act of 1964, 42 U.S.C. ss.2000 et. seq., the Civil Rights Act
of 1866, 42 U.S.C. ss.1981, the Age Discrimination in Employment Act, as
amended, 29 U.S.C. ss.621 et. seq., the Older Workers Benefit Protection Act,
the Rehabilitation Act of 1972, as amended, 29 U.S.C. ss.701 et. seq., the
Americans with Disabilities Act, 42 U.S.C. ss.12101 et. seq., and the
Pennsylvania Human Relations Act, 43 P.S. ss.951 et. seq.

                  (d) any and all claims under any federal or state statute
relating to employee benefits or pensions;

                  (e) any and all claims in tort (including but not limited to
any claims for misrepresentation, defamation, interference with contract or
prospective economic advantage, intentional infliction of emotional distress and
negligence); and

                  (f) any and all claims for attorney's fees and costs.

            13. AMENDMENT; WAIVER. No provisions of this Agreement may be
modified, waived or discharged unless such waiver, modification or discharge is
agreed to in writing signed by the Executive and such officer or officers as may
be specifically designated by the Board of Directors of the Bank to sign on its
behalf. No waiver by any party hereto at any time of any breach by any other
party hereto of, or compliance with, any condition or provision of this
Agreement to be performed by such other party shall be deemed a waiver of
similar or dissimilar provisions or conditions at the same or at any prior or
subsequent time.

            14. GOVERNING LAW. The validity, interpretation, construction and
performance of this Agreement shall be governed by the laws of the United States
where applicable and otherwise by the substantive laws of the Commonwealth of
Pennsylvania.

            15. NATURE OF OBLIGATIONS. Nothing contained herein shall create or
require the Bank to create a trust of any kind to fund any benefits which may be
payable hereunder, and to the extent that the Executive acquires a right to
receive benefits from the Bank hereunder, such right shall be no greater than
the right of any unsecured general creditor of the Bank.

            16. HEADINGS. The section headings contained in this Agreement are
for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.

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            17. VALIDITY. The invalidity or unenforceability of any provision of
this Agreement shall not affect the validity or enforceability of any other
provisions of this Agreement, which shall remain in full force and effect.

            18. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.

            19. REGULATORY ACTIONS. The following provisions shall be applicable
to the parties to the extent that they are required to be included in employment
agreements between a savings bank and its employees pursuant to Section
563.39(b) of the Regulations Applicable to all Savings Associations, 12 C.F.R.
ss.563.39(b), or any successor thereto, and shall be controlling in the event of
a conflict with any other provision of this Agreement, including without
limitation Section 5 hereof.

                  (a) If the Executive is suspended from office and/or
temporarily prohibited from participating in the conduct of the Bank's affairs
pursuant to notice served under Section 8(e)(3) or Section 8(g)(1) of the
Federal Deposit Insurance Act ("FDIA")(12 U.S.C. ss.ss.1818(e)(3) and
1818(g)(1)), the Bank's obligations under this Agreement shall be suspended as
of the date of service, unless stayed by appropriate proceedings. If the charges
in the notice are dismissed, the Bank may, in its discretion: (i) pay the
Executive all or part of the compensation withheld while its obligations under
this Agreement were suspended, and (ii) reinstate (in whole or in part) any of
its obligations which were suspended.

                  (b) If the Executive is removed from office and/or permanently
prohibited from participating in the conduct of the Bank's affairs by an order
issued under Section 8(e)(4) or Section 8(g)(1) of the FDIA (12 U.S.C.
ss.ss.1818(e)(4) and (g)(1)), all obligations of the Bank under this Agreement
shall terminate as of the effective date of the order, but vested rights of the
Executive and the Bank as of the date of termination shall not be affected.

                  (c) If the Bank is in default, as defined in Section 3(x)(1)
of the FDIA (12 U.S.C. ss.1813(x)(1)), all obligations under this Agreement
shall terminate as of the date of default, but vested rights of the Executive
and the Bank as of the date of termination shall not be affected.

                  (d) All obligations under this Agreement shall be terminated
pursuant to 12 C.F.R. ss.563.39(b)(5) (except to the extent that it is
determined that continuation of the Agreement for the continued operation of the
Bank is necessary): (i) by the Director of the OTS, or his/her designee, at the
time the Federal Deposit Insurance Corporation ("FDIC") enters into an agreement
to provide assistance to or on behalf of the Bank under the authority contained
in Section 13(c) of the FDIA(12 U.S.C. ss.1823(c)); or (ii) by the Director of
the OTS, or his/her designee, at the time the Director or his/her designee
approves a supervisory merger to resolve problems related to operation of the
Bank or when the Bank is determined by the Director of the OTS to be in an
unsafe or unsound condition, but vested rights of the Executive and the Bank as
of the date of termination shall not be affected.

            20. REGULATORY PROHIBITION. Notwithstanding any other provision of
this Agreement to the contrary, any payments made to the Executive pursuant to
this Agreement, or otherwise, are subject to and conditioned upon their
compliance with Section 18(k) of the FDIA (12 U.S.C. ss.1828(k) and any
regulations promulgated thereunder.

            21. ENTIRE AGREEMENT. This Agreement embodies the entire agreement
between the Bank and the Executive with respect to the matters agreed to herein.
All prior agreements between the Bank and the Executive with respect to the
matters agreed to herein, including without limitation the prior Agreement
between the Bank and the Executive dated February 6, 1998 is hereby superseded
and shall have no force or effect. Notwithstanding the foregoing, nothing
contained in this Agreement shall affect the agreement of even date being
entered into between the Bank and the Executive.

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            IN WITNESS WHEREOF, this Agreement has been executed as of the date
first above written.

Attest:                                 COMMONWEALTH BANK

_____________________________           ________________________________________
Charles H. Meacham, Chairman            By: Joseph E. Colen, Jr., Director and
of the Board                            Member of the Compensation and Benefits
                                        Committee of the Board of Directors

Witness:                                EXECUTIVE

_____________________________           ________________________________________
Patrick J. Ward                         By: Brian C. Zwaan

                                      -10-<PAGE>
                                ANALOG AGREEMENT

         This Analog Agreement (the "Agreement") dated as of August 6, 2001 (the
"Effective Date"), is entered into by and between CHILDREN'S MEDICAL CENTER
CORPORATION, a corporation duly organized and existing under the laws of the
Commonwealth of Massachusetts and having its principal office at 300 Longwood
Avenue, Boston, Massachusetts 02115, U.S.A. (hereinafter referred to as "CMCC"),
and ENTREMED, INC., a corporation duly organized under the laws of Delaware and
having its principal office at 9640 Medical Center Drive, Rockville, MD 20850
(hereinafter referred to as "ENTREMED").

                                   WITNESSETH

         WHEREAS, CMCC is the owner of certain "Patent Rights" (as later defined
herein), and has the right to grant licenses under said Patent Rights;

         WHEREAS, the Patent Rights were originally licensed by CMCC to ENTREMED
pursuant to that certain License Agreement made and entered into May 26, 1994,
by and between CMCC and ENTREMED, as amended on August 23, 1995, December 2,
1997, December 3, 1998 and September 24, 1999 (as so amended, the "Original
License Agreement");

         WHEREAS, ENTREMED sublicensed the Patent Rights relating to Thalidomide
to Celgene Corporation, a corporation duly organized under the laws of Delaware
and having its principal office at 6 Powder Horn Drive, Warren, New Jersey 07059
("CELGENE"), pursuant to that certain Agreement dated as of December 9, 1998 by
and between ENTREMED and CELGENE (the "Celgene Agreement");

         WHEREAS, pursuant to that certain Purchase Agreement dated as of June
15, 2001 (the "Purchase Agreement") by and between ENTREMED and Bioventure
Investments kft, a company organized under the laws of Hungary ("BIOVENTURE"),
ENTREMED has agreed to sell, transfer and assign to BIOVENTURE all of its right,
title and interest relating to the Net Celgene Payments, as defined in the
Purchase Agreement, under the Celgene Agreement;

         WHEREAS, the Original License Agreement will be terminated, and CMCC
and ENTREMED will enter into this Agreement, pursuant to which CMCC will grant a
license to ENTREMED to the Patent Rights for use in the Non-Thalidomide Field
(as defined below).

[*] = CERTAIN INFORMATION CONTAINED IN THIS EXHIBIT HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH
RESPECT TO THE OMITTED PORTIONS. OMITTED TEXT IS INDICATED BY A "*".

                                      -1-
<PAGE>

         WHEREAS, CMCC desires to have the Patent Rights utilized in the public
interest and is willing to grant a license thereunder;

         WHEREAS, CMCC has consented to the Purchase Agreement pursuant to the
CMCC Acknowledgment and Consent (the "CMCC Consent");

         WHEREAS, ENTREMED desires to obtain a license under the Patent Rights
upon the terms and conditions hereinafter set forth;

         NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein, the parties hereto agree as follows:

                            ARTICLE I - DEFINITIONS

         For the purpose of this Agreement, the following words and phrases
shall have the following meanings:

1.1      "LICENSEE" shall mean ENTREMED and any Subsidiary or joint venture of
         ENTREMED.

1.2      "Sublicensee" shall mean any corporation, partnership or business
         organization which is not controlled directly or indirectly by LICENSEE
         but to whom LICENSEE transfers know-how, rights or products to enable
         said party to sell Licensed Products and/or Licensed Processes.

1.3      "Subsidiary" shall mean any corporation, company or other entity more
         than fifty percent (50%) of whose voting stock is owned or controlled
         directly or indirectly by ENTREMED.

1.4      "Patent Rights" shall mean all of the following CMCC intellectual
         property:

         1.4.1    United States and foreign patents and/or patent applications
                  listed in Appendix A;

         1.4.2    United States and foreign patents issued from the applications
                  listed in Appendix A and from divisionals and continuations of
                  these applications;

         1.4.3    Claims of U.S. and foreign continuation-in-part applications,
                  and of the resulting patents, which are directed to subject
                  matter that is described in the U.S. and foreign applications
                  listed in Appendix A in a manner that meets the requirements
                  of 35 U.S.C. Section 112;

         1.4.4    Claims of all later filed foreign patent applications, and of
                  the resulting patents, which are directed to subject matter
                  that is described in the United States patent and/or patent
                  applications listed in Appendix A in a manner that meets the
                  requirements of 35 U.S.C. Section 112; and

                                      -2-
<PAGE>

         1.4.5    Any reissues of United States patents described in Sections
                  1.4.1, 1.4.2 and 1.4.3 above.

1.5      A "Licensed Product" shall mean any product or part thereof which does
         not contain Thalidomide, alone or in combination, and which:

         1.5.1    Is covered in whole or in part by an issued, unexpired claim
                  or a pending claim contained in the Patent Rights in the
                  country in which any Licensed Product is made, used, or sold;

         1.5.2    Is manufactured by using a process which is covered in whole
                  or in part by an issued, unexpired claim or a pending claim
                  contained in the Patent Rights in the country in which any
                  Licensed Process is used or in which the Licensed Product is
                  used or sold.

1.6      A "Licensed Process" shall mean any process with application solely in
         the Non-Thalidomide Field and which is covered in whole or in part by
         an issued, unexpired claim or a pending claim contained in the Patent
         Rights.

1.7      "Net Sales" shall mean the gross amount invoiced for all sales of
         Licensed Products by LICENSEE or its Sublicensees or for any practice
         of the Licensed Processes by LICENSEE or its Sublicensees less:

         1.7.1    trade, quantity and cash discounts, allowed, incurred or
                  actually taken;

         1.7.2    sales taxes directly related to the sale to the extent
                  included in the gross invoice price;

         1.7.3    the portion of freight, postage and shipping insurance
                  expenses paid by LICENSEE;

         1.7.4    value added tax, sales or turnover tax, or excise taxes or
                  duties which are included in said invoiced amount;

         1.7.5    rebates accrued, incurred or paid to Federal Medicaid or State
                  Medicare and amounts exactly repaid or credited by reason of
                  rejections or the return of Licensed Products (due to recalls,
                  dating or other reasons) and retroactive deductions; and

         1.7.6    cost of export licenses and any taxes, fees or other charges
                  associated with the exportation or importation of Licensed
                  Products.

         1.7.7    No deductions shall be made for commissions paid to
                  individuals whether they be with independent sales agencies or
                  regularly employed by LICENSEE and on its payroll, or for the
                  cost of collections.

         1.7.8    Licensed Products shall be considered "sold" when billed out
                  or invoiced.

                                      -3-
<PAGE>

1.8      "New Thalidomide Agreement" shall mean that certain Agreement of even
         date herewith by and among CMCC, BIOVENTURE, CELGENE, and, for limited
         purposes thereof, LICENSEE.

1.9      "Non-Thalidomide Field" shall mean the use of any compound other than
         Thalidomide, alone or in combination, in humans or animals, including
         without limitation any and all diagnostic, prophylactic, therapeutic,
         and research and development uses.

1.10     "Thalidomide" shall mean a compound with the chemical structure
         described as 2-(2,6-Dioxo-3-piperidinyl)-1H-isoindole-1,3(2H)-dione, or
         as otherwise defined in the Merck Index, entry 9390, 12th ed., and
         pharmaceutically acceptable salts thereof.

                         ARTICLE II - GRANT OF LICENSE

2.1      CMCC hereby grants to LICENSEE an exclusive worldwide right and license
         in the Non-Thalidomide Field, subject to the provisions of Articles 2.3
         and 2.9 herein, to make, have made, use, lease, and sell the Licensed
         Products and to practice the Licensed Processes under the Patent
         Rights. CMCC shall retain a royalty-free, nonexclusive, irrevocable
         license to practice the Patent Rights for research purposes only.

2.2      LICENSEE agrees that it will use its best efforts to manufacture
         substantially in the United States the Licensed Products leased or sold
         in the United States.

2.3      The license granted in Article 2.1 is subject to a reserved
         nonexclusive right in CMCC to license the Patent Rights, including
         Licensed Products and Licensed Processes, to non-profit, non-commercial
         institutions for research purposes only. CMCC agrees to notify ENTREMED
         in writing of any such license grant. Subject only to this Article 2.3
         and Article 2.9 herein, CMCC hereby agrees that it shall not grant any
         other licenses, to make, have made, use, lease and/or sell Licensed
         Products or to utilize Licensed Processes during the period of time in
         which this Agreement is in effect.

2.4      LICENSEE shall have the right to enter into sublicensing agreements for
         the rights, privileges, and licenses granted hereunder. Such
         sublicenses will expire upon the expiration of LICENSEE's rights
         granted herein except as provided in Section 13.7.

2.5      LICENSEE agrees that any sublicense granted by it shall provide that
         the obligations to CMCC of Articles II, V, VII, VIII, IX, X, XII, XIII,
         and XV of this Agreement shall be binding upon the Sublicensee as if it
         were a party to this Agreement. LICENSEE further agrees to attach
         copies of such Articles to sublicense agreements. Further, LICENSEE
         hereby agrees that every

                                      -4-
<PAGE>

         sublicensing agreement to which it shall be a party and which shall
         relate to the rights, privileges and license granted hereunder shall
         contain a statement setting forth the event or date upon which
         LICENSEE'S exclusive rights, privileges and license hereunder shall
         terminate.

2.6      LICENSEE agrees to forward to CMCC a copy of any and all fully executed
         sublicense agreements, and further agrees to forward to CMCC annually a
         copy of such reports received by LICENSEE from its Sublicensees during
         the preceding twelve (12) month period under the sublicenses as shall
         be pertinent to a royalty accounting under said sublicense agreements.

2.7      LICENSEE shall not receive from Sublicensees anything of value in lieu
         of cash payments based upon payment obligations of any sublicense under
         this Agreement, without the express prior written permission of CMCC.

2.8      The license granted hereunder shall not be construed to confer any
         rights upon LICENSEE by implication, estoppel or otherwise as to any
         technology not specifically set forth in Appendix A hereof. Without
         limiting the generality of the foregoing, LICENSEE may not use the
         Patent Rights outside the Non-Thalidomide Field. Any use by LICENSEE of
         the Patent Rights outside the Non-Thalidomide Field shall constitute a
         breach of this Agreement and grounds for termination of this Agreement.

2.9      The license granted in Article 2.1 is subject to, and expressly limited
         by, any rights the United States government may have pursuant to Public
         Laws 96-517 and 98-620.

                          ARTICLE III - DUE DILIGENCE

3.1      LICENSEE shall use its best efforts to bring one or more Licensed
         Products or Licensed Processes to market through a thorough, vigorous
         and diligent program for exploitation of the Patent Rights. CMCC agrees
         that LICENSEE shall have complete control over all regulatory
         submissions of Licensed Products to the appropriate regulatory agencies
         worldwide. For each Licensed Product which LICENSEE intends to
         commercialize, LICENSEE shall provide CMCC with written notice of
         LICENSEE's interest in such commercialization (each such notice, a
         "Notice of Intent to Commercialize" and the date of each such notice, a
         "Product Notice Date"). LICENSEE shall provide CMCC with a Notice of
         Intent to Commercialize the first Licensed Product ("First Licensed
         Product") upon the Effective Date. Due diligence shall be demonstrated
         by LICENSEE or its Sublicensee attaining the following milestones for
         each Licensed Product:

         3.1.1    within * of the applicable Product Notice Date, the filing of
                  an IND (Investigational New Drug application) in the U.S. for
                  such Licensed Product;

                                      -5-
<PAGE>

         3.1.2    within * of the applicable Product Notice Date, the initiation
                  of Phase II trials of such Licensed Product;

         3.1.3    within * of the applicable Product Notice Date, the initiation
                  of Phase III trials of such Licensed Product; and

         3.1.4    within * of the applicable Product Notice Date, the submission
                  of an NDA (New Drug Application) or similar application to
                  gain regulatory approval for the marketing of such Licensed
                  Product.

3.2      LICENSEE acknowledges that the primary objective of CMCC with respect
         to the Licenses granted hereby is to promote the development and
         marketing of Licensed Products and Licensed Processes for the public
         good. To this end, CMCC shall have the right to terminate this
         Agreement pursuant to Section 13.4 if LICENSEE fails to attain any of
         the above milestones with respect to the First Licensed Product or if
         it suspends diligence in meeting any of the above milestones for more
         than three (3) months with respect to the First Licensed Product
         because of business circumstances such as lack of funds, merger
         acquisition, or the like ("Business Circumstances"). CMCC shall have
         the right to terminate this Agreement pursuant to Section 13.4 with
         respect to one or more Licensed Products except the First Licensed
         Product ("Other Licensed Product(s)"), if LICENSEE fails to attain any
         of the above milestones with respect to such Other Licensed Product(s)
         or if it suspends its diligence in meeting of any of the above
         milestones for more than three (3) months with respect to such Other
         Licensed Product(s) because of Business Circumstances. In the event of
         any such termination, LICENSEE shall grant to CMCC, to the extent not
         prohibited by the United States government or by prior contractual
         obligations to any third party, solely to the extent necessary to
         permit CMCC to exercise its rights under such terminated Patent Rights,
         immunity from suit for any causes of action LICENSEE may have arising
         out of or in connection with any intellectual property controlled by
         LICENSEE. However, if LICENSEE can demonstrate to the satisfaction of
         CMCC, at CMCC's sole discretion, that circumstances beyond LICENSEE's
         control precluded LICENSEE from fulfilling its diligence obligations
         with respect to the First Licensed Product or an Other Licensed
         Product, and that it is unlikely that any third party could overcome
         these circumstances better than LICENSEE, then CMCC shall not exercise
         its termination rights under this Section for one (1) year from the
         date on which CMCC gives notice of termination and, if LICENSEE
         reestablishes diligence towards it objectives during such one year
         period, any prior lack of diligence will be deemed cured with respect
         to the First Licensed Product or such Other Licensed Product(s), as
         applicable.

3.3      If (a) CMCC provides LICENSEE with written notice of research results
         that CMCC believes reasonably indicate that a compound covered under
         the Patent Rights has commercial potential but for which compound
         LICENSEE has not yet submitted to CMCC a Notice of Intent to
         Commercialize ("Compound Notice");

                                      -6-
<PAGE>

         or (b) CMCC provides written notice to LICENSEE of a third party having
         approached CMCC seeking a right to commercialize any compound covered
         under the Patent Rights for which LICENSEE has not yet submitted to
         CMCC a Notice of Intent to Commercialize ("Sublicensee Notice"), then
         LICENSEE must within ninety (90) days after receipt of such notice
         either submit to CMCC a Notice of Intent to Commercialize with respect
         to such compound and comply with the obligations of Sections 3.1 and
         3.2, or identify and enter into a sublicensing arrangement with a
         sublicensee to commercialize such compound. If LICENSEE does not submit
         a Notice of Intent to Commercialize to CMCC or fails to identify and
         enter into a sublicensing arrangement with such a sublicensee candidate
         as required above, CMCC shall have the right to terminate this
         Agreement pursuant to Section 13.4 with respect to such compound. In
         the event of such termination, LICENSEE shall grant to CMCC, to the
         extent not prohibited by the United States government or by prior
         contractual obligations to any third party, solely to the extent
         necessary to permit CMCC to exercise its rights under such terminated
         Patent Rights, immunity from suit for any causes of action LICENSEE may
         have arising out of or in connection with any intellectual property
         controlled by LICENSEE.

                      ARTICLE IV - PAYMENTS AND ROYALTIES

4.1      For the rights, privileges and license granted hereunder, LICENSEE
         shall pay to CMCC in the manner hereinafter provided to the end of the
         term of the Patent Rights or until this Agreement shall be terminated
         as hereinafter provided, whether the milestones are achieved under the
         sponsorship of CMCC, LICENSEE or a Sublicensee, the following milestone
         payments totaling $1,500,000 (one million and five hundred thousand
         dollars) for each Licensed Product:

         4.1.1    $* (* dollars) due * the applicable Product Notice Date for
                  such Licensed Product;

         4.1.2    $* (* dollars) due *submission of the first Phase I/II IND
                  (Investigational New Drug application) for any indication for
                  such Licensed Product;

         4.1.3    $* (* dollars) due * completion of a Phase II clinical trials
                  for any indication for such Licensed Product; and

         4.1.4    $* (* dollars) due * submission of a PLA (Product License
                  Application) or an NDA (New Drug Application) for any
                  indication for such Licensed Product.

4.2      LICENSEE shall pay to CMCC a royalty based on the Net Sales with
         respect to the Licensed Products or Licensed Processes used, leased or
         sold by LICENSEE, which said royalty shall be *% (* percent), or such
         lower rate as may be agreed upon in writing by the parties, of such Net
         Sales.

                                      -7-
<PAGE>

4.3      Where sublicenses have been granted, or strategic partnerships entered
         into, LICENSEE shall pay to CMCC *% (* percent) of any and all
         sublicensing payments, or such lower percentage as may be agreed upon
         in writing by the parties. Sublicensing payments are defined as any and
         all payments made to LICENSEE by the Sublicensee or strategic partner
         except for payments to support research and development conducted by
         LICENSEE, for purchases of equity, for payments for goods and services
         or for royalties based on the Net Sales with respect to the Licensed
         Product or Licensed Process. LICENSEE shall pay to CMCC *% of the
         royalty income paid to LICENSEE up to $* of cumulative Net Sales with
         respect to the Licensed Product or Licensed Process. After $* of
         cumulative Net Sales, LICENSEE shall pay to CMCC *% of royalty income
         to LICENSEE from the Sublicensee with a minimum payment of *% of Net
         Sales for sales of the Licensed Product made or the practice of the
         Licensed Process by the Sublicensee. If the royalty rate paid by the
         Sublicensee is reduced because of third party, non-infringing sales of
         a Thalidomide analog, the minimum payment of at least *% of Net Sales
         of the Licensed Product will be reduced proportional to the reduction
         of the royalty rate paid to LICENSEE by the Sublicensee. Milestone
         payments from LICENSEE to CMCC shall be credited against CMCC's share
         of milestone payments made to LICENSEE by Sublicensee.

4.4      [Intentionally Omitted.]

4.5      No multiple royalties shall be payable because any Licensed Product,
         its manufacture, use, lease or sale, are or shall be covered by more
         than one of the Patent Rights licensed under this Agreement.

4.6      Royalty payments shall be paid in United States dollars in Boston,
         Massachusetts, or at such other place as CMCC may reasonably designate
         consistent with the laws and regulations controlling in any foreign
         country. If any currency conversion shall be required in connection
         with the payment of royalties hereunder, such conversion shall be made
         by using the exchange rate prevailing at the Fleet Bank of Boston on
         the last business day of the calendar quarterly reporting period to
         which such royalty payments relate.

                        ARTICLE V - REPORTS AND RECORDS

5.1      LICENSEE shall keep full, true and accurate books of account containing
         all particulars that may be necessary for the purpose of showing the
         amounts payable to CMCC hereunder. Said books of account shall be kept
         at LICENSEE's principal place of business or the principal place of
         business of the appropriate division of LICENSEE to which this
         Agreement relates. Said books and the supporting data shall be open at
         all reasonable times for five (5) years following the end of the
         calendar year to which they pertain, to the inspection of CMCC or its
         agents for the purpose of verifying LICENSEE's royalty statement or

                                      -8-
<PAGE>

         compliance in other respects with this Agreement. CMCC can request
         auditing of said books and supporting data no more than once each
         calendar year.

5.2      LICENSEE, within thirty (30) days after March 31, June 30, September 30
         and December 31, of each year, shall deliver to CMCC true and accurate
         reports, giving such particulars of the business conducted by LICENSEE
         and its Sublicensees during the preceding three-month period under this
         Agreement as shall be pertinent to a royalty accounting hereunder.
         These shall include at least the following:

         5.2.1    Number of Licensed Products manufactured and sold.

         5.2.2    Total billings for Licensed Products sold and Licensed
                  Processes practiced.

         5.2.3    Accounting for all Licensed Products used or sold and Licensed
                  Processes practiced.

         5.2.4    Deductions applicable as provided in Section 1.7.

         5.2.5    Total royalties due.

         5.2.6    Names and addresses of all Sublicensees of LICENSEE.

5.3      With each such report submitted, LICENSEE shall pay to CMCC the
         royalties due and payable under this Agreement. If no royalties shall
         be due, LICENSEE shall so report. On or before the ninetieth (90th) day
         following the close of LICENSEE's fiscal year, LICENSEE shall provide
         CMCC with LICENSEE's certified financial statements for the preceding
         fiscal-year including at a minimum, a Balance Sheet and an Operating
         Statement.

5.4      The royalty payments set forth in this Agreement shall, if overdue,
         bear interest until payment at a per annum rate of two percent (2%)
         above the prime rate in effect at the Fleet Bank of Boston on the due
         date. The payment of such interest shall not foreclose CMCC from
         exercising any other rights it may have as a consequence of the
         lateness of any payment.

                        ARTICLE VI - PATENT PROSECUTION

         The rights and obligations of the parties with respect to the
         prosecution of the Patent Rights during the term of this Agreement
         shall be governed by the applicable provisions of Section 7 of the New
         Thalidomide Agreement, and such provisions of Section 7 shall survive
         and remain in effect during the term of this Agreement with respect to
         the parties' rights to the Patent Rights after a termination of the New
         Thalidomide Agreement prior to termination or expiration of this
         Agreement.

                                      -9-
<PAGE>

                           ARTICLE VII - INFRINGEMENT

         The rights and obligations of the parties with respect to infringement
         of the Patent Rights during the term of this Agreement shall be
         governed by the applicable provisions of Section 7 of the New
         Thalidomide Agreement, and such provisions of Section 7 shall survive
         and remain in effect during the term of this Agreement with respect to
         the parties' rights to the Patent Rights after a termination of the New
         Thalidomide Agreement prior to termination or expiration of this
         Agreement.

        ARTICLE VIII - INDEMNIFICATION, PRODUCT LIABILITY AND INSURANCE

8.1      Indemnification

         8.1.1    LICENSEE shall indemnify, defend and hold harmless CMCC and
                  its trustees, officers, medical and professional staff,
                  employees, and agents and their respective successors, heirs
                  and assigns (the "Indemnitees"), against any liability,
                  damage, loss or expense (including reasonable attorney's fees
                  and expenses of litigation) incurred by or imposed upon the
                  Indemnitees or any one of them in connection with any claims,
                  suits, actions, demands or judgments arising out of any theory
                  of product liability (including, but not limited to, actions
                  in the form of tort, warranty, or strict liability) concerning
                  any product, process or service made, used or sold pursuant to
                  any right or license granted under this Agreement.

         8.1.2    LICENSEE's indemnification under Section 8.1.1 shall not apply
                  to any liability, damage, loss or expense to the extent that
                  it is directly attributable to the negligent activities,
                  reckless misconduct or intentional misconduct of the
                  Indemnitees.

         8.1.3    LICENSEE agrees, at its own expense, to provide attorneys
                  reasonably acceptable to CMCC to defend against any actions
                  brought or filed against any party indemnified hereunder with
                  respect to the subject of indemnity contained herein, whether
                  or not such actions are rightfully brought.

         8.1.4    This Section 8.1 shall survive expiration or termination of
                  this Agreement.

8.2      Insurance

         8.2.1    Beginning at the time as any such product, process or service
                  is being commercially distributed or sold (other than for the
                  purpose of obtaining regulatory approvals) by LICENSEE or by a
                  Sublicensee or agent of LICENSEE, LICENSEE shall, at its sole
                  cost and expense, procure and maintain comprehensive general
                  liability insurance in amounts not less than $2,000,000 per
                  incident and $2,000,000 annual aggregate and naming

                                      -10-
<PAGE>

                  the Indemnitees as additional insureds. Such comprehensive
                  general liability insurance shall provide (i) product
                  liability coverage and (ii) broad form contractual liability
                  coverage for LICENSEE's indemnification under Section 8.1. If
                  LICENSEE elects to self-insure all or part of the limits
                  described above (including deductibles or retentions which are
                  in excess of $250,000 annual aggregate) such self-insurance
                  program must be acceptable to the CMCC and the Risk Management
                  Foundation of the Harvard Medical Institutions, Inc. The
                  minimum amount of insurance coverage required under this
                  Section 8.2 shall not be construed to create a limit of
                  LICENSEE's liability with respect to its indemnification under
                  Section 8.1.

         8.2.2    LICENSEE shall provide CMCC with written evidence of such
                  insurance upon request of CMCC. LICENSEE shall provide CMCC
                  with written notice at lease fifteen (15) days prior to the
                  cancellation, non-renewal or material change in such
                  insurance; if LICENSEE does not obtain replacement insurance
                  providing comparable coverage within such fifteen (15) day
                  period, CMCC shall have the right to terminate this Agreement
                  effective at the end of such fifteen (15) day period without
                  notice of any additional waiting periods.

         8.2.3    LICENSEE shall maintain such comprehensive general liability
                  insurance during (i) the period that any such product, process
                  or service is being commercially distributed or sold (other
                  than for the purpose of obtaining regulatory approvals) by
                  LICENSEE or by a Sublicensee or agent of LICENSEE and (ii) a
                  reasonable period after the period referred to above, which in
                  no event shall be less than fifteen (15) years.

         8.2.4    This Section 8.2 shall survive expiration or termination of
                  this Agreement.

                          ARTICLE IX - EXPORT CONTROLS

It is understood that CMCC is subject to United States laws and regulations
controlling the export of technical data, computer software, laboratory
prototypes and other commodities (including the Arms Export Control Act, as
amended and the Export Administration Act of 1979) and that its obligations
hereunder are contingent on compliance with applicable United States export laws
and regulations. The transfer of certain technical data and commodities may
require a license from the cognizant agency of the United States Government
and/or written assurances by LICENSEE that LICENSEE shall not export data or
commodities to certain foreign countries without prior approval of such agency.
CMCC neither represents that a license shall not be required nor that, if
required, it shall be issued.

                                      -11-
<PAGE>

                          ARTICLE X - NON-USE OF NAMES

LICENSEE shall not use the names of the Children's Medical Center Corporation
nor of any of its employees, nor any adaptation thereof, in any advertising,
promotional or sales literature without prior written consent obtained from CMCC
in each case except that LICENSEE may state that it is licensed by CMCC under
one or more of the patents and/or applications comprising the Patent Rights, and
LICENSEE may comply with disclosure requirements of all applicable laws relating
to its business, including United States and state security laws.

                            ARTICLE XI - ASSIGNMENT

Subject to the restrictions set forth herein, this Agreement, and each and every
provision hereof, shall be binding upon and shall inure to the benefit of the
parties, their respective successors, successors-in-title, heirs and assigns,
and each and every successor-in-interest to any party, whether such successor
acquires such interest by way of gift, inheritance, purchase, foreclosure, or by
any other method, shall hold such interest subject to all the terms and
provisions of this Agreement; provided however that LICENSEE shall not assign or
transfer the whole or any part of this Agreement or its rights hereunder without
the express written agreement of CMCC which agreement shall not be unreasonably
withheld except that LICENSEE may assign this Agreement in connection with the
transfer or sale of all or substantially all of its assets or business or its
merger or consolidation with another organization.

                           ARTICLE XII - ARBITRATION

12.1     Any and all claims, disputes or controversies arising under, out of, or
         in connection with this Agreement, which have not been resolved by good
         faith negotiations between the parties, shall be resolved by final and
         binding arbitration in Boston, Massachusetts, under patent arbitration
         rules of the American Arbitration Association then obtaining. The
         arbitrators shall have no power to add to, subtract from or modify any
         of the terms or conditions of this Agreement. Any award rendered in
         such arbitration may be enforced by either party in either the courts
         of the Commonwealth of Massachusetts or in the United States District
         Court for the District of Massachusetts, to whose jurisdiction for such
         purposes CMCC and LICENSEE each hereby irrevocably consents and
         submits.

12.2     Notwithstanding the foregoing, nothing in this Article shall be
         construed (i) to waive any rights or timely performance of any
         obligations existing under this Agreement or (ii) to apply to the
         provisions of Section 7.3 (Infringement Actions) (other than the fourth
         sentence of Section 7.3(a)) or Section 7.4 (Declaratory Judgment
         Actions) of the New Thalidomide Agreement.

                                      -12-
<PAGE>

                      ARTICLE XIII - TERM AND TERMINATION

13.1     Unless earlier terminated as hereinafter provided, this Agreement shall
         remain in full force and effect for the life of the last to expire
         patent issued under the Patent Rights.

13.2     Pursuant to Section 8.2.2, or if LICENSEE shall cease to carry on its
         business, this Agreement shall terminate upon notice by CMCC.

13.3     Should LICENSEE fail to pay CMCC royalties due and payable hereunder,
         CMCC shall have the right to terminate this Agreement on sixty (60)
         days' notice, unless LICENSEE shall pay CMCC within the sixty (60) day
         period, all such royalties and interest due and payable. Upon the
         expiration of the sixty (60) day period, if LICENSEE shall not have
         paid all such royalties and interest due and payable, the rights,
         privileges and license granted hereunder shall terminate.

13.4     Upon any material breach or default of this Agreement by LICENSEE,
         other than those occurrences set out in Sections 13.2 and 13.3, which
         shall always take precedence in that order over any material breach or
         default referred to in this Section 13.4, CMCC shall have the right to
         terminate this Agreement (or, in the case of a breach with respect to
         Other Licensed Products and/or compounds as set forth in Sections 3.2
         and 3.3, respectively, terminate the Agreement with respect to such
         Other Licensed Products and/or compounds) and the rights, privileges
         and license granted hereunder by ninety (90) days' notice to LICENSEE.
         Such termination shall become effective unless LICENSEE shall have
         cured any such breach or default prior to the expiration of the ninety
         (90) day period.

13.5     LICENSEE shall have the right to terminate this Agreement at any time
         on six (6) months' notice to CMCC, and upon payment of all amounts due
         CMCC through the effective date of termination.

13.6     Upon termination of this Agreement for any reason, nothing herein shall
         be construed to release either party from any obligation that matured
         prior to the effective date of such termination. LICENSEE and any
         Sublicensee thereof may, however, after the effective date of such
         termination, sell all Licensed Products, and complete Licensed Products
         in the process of manufacture at the time of such termination and sell
         the same, provided that LICENSEE shall pay to CMCC the royalties
         thereon as required by Article IV of this Agreement and shall submit
         the reports required by Article V hereof on the sales of Licensed
         Products.

13.7     CMCC agrees that if LICENSEE has provided to CMCC notice that LICENSEE
         has granted a sublicense to a Sublicensee under this Agreement, then in
         the event CMCC terminates this Agreement for any reason, CMCC shall
         provide to such Sublicensee no less than thirty (30) days prior to the
         effective date of said termination, written notice of said termination
         at the address specified by LICENSEE to CMCC in LICENSEE's notice to
         CMCC under Article XIV.

                                      -13-
<PAGE>

         CMCC agrees that upon the Sublicensee's notice as described below and
         provided the Sublicensee is not in breach of its sublicense, CMCC shall
         grant to such Sublicensee license rights and terms equivalent to the
         sublicense rights and terms which the sublicense shall have granted to
         said Sublicensee; provided that the Sublicensee shall remain a
         Sublicensee under this Agreement for a period of at least sixty (60)
         days following receipt of notice from CMCC. Sublicensees shall during
         said sixty (60) day period provide to CMCC notice wherein the
         Sublicensee: (i) reaffirms the terms and conditions of this Agreement
         as it relates to the rights the Sublicensee has been granted under the
         sublicense; (ii) agrees to abide by all of the terms and conditions of
         this Agreement applicable to Sublicensees and to discharge directly all
         pertinent obligations of LICENSEE which LICENSEE is obligated hereunder
         to discharge, excluding any financial obligations; and (iii)
         acknowledges that CMCC shall have no obligations to the Sublicensee
         other than its obligations set forth in this Agreement with regard to
         LICENSEE.

13.8     The following provisions shall survive the expiration or termination of
         this Agreement: Article I, Sections 5.1 and 5.4, Articles VIII, X and
         XII, Sections 13.6, 13.7, 13.8 and 13.9, and Articles XIV and XV.

13.9     Termination shall be in addition to, and shall not prejudice, any of
         the parties' remedies at law or in equity.

           ARTICLE XIV - PAYMENTS, NOTICES, AND OTHER COMMUNICATIONS

Any payment, notice or other communication pursuant to this Agreement shall be
sufficiently made or given on the date of the mailing if sent to a party by
certified first class mail, postage prepaid, addressed to it at its address
below or as it shall designate by written notice given to the other party:

In the case of CMCC:
Chief Intellectual Property Officer
Intellectual Property Office
CHILDREN'S HOSPITAL BOSTON
300 Longwood Avenue
Boston, MA 02115
Fax: (617) 232-7485

With a copy to:
Hale and Dorr LLP
60 State Street
Boston, MA 02109
Attn: Steven D. Singer, Esq.
Fax: (617) 526-5000

                                      -14-
<PAGE>

In the case of LICENSEE:
Chief Executive Officer
ENTREMED, INC.
9640 Medical Center Drive, Suite 200
Rockville, MD 20850
Fax: (302) 217-9594

With a copy to:
Kilpatrick Stockton LLP
37th Floor
191 Peachtree Street
Atlanta, GA 30303
Attn: James Dean Johnson, Ph.D.
Fax: 404-949-2499

                     ARTICLE XV - MISCELLANEOUS PROVISIONS

15.1     This Agreement shall be construed, governed, interpreted and applied in
         accordance with the laws of the Commonwealth of Massachusetts, U.S.A.
         excluding its conflicts of laws provisions, except that questions
         affecting the construction and effect of any patent shall be determined
         by the law of the country in which the patent was granted.

15.2     The parties hereto acknowledge that this Agreement, the CMCC Consent
         and the applicable provisions of Section 7 of the New Thalidomide
         Agreement set forth the entire Agreement and understanding of the
         parties hereto as to the subject matter hereof, and shall not be
         subject to any change or modification except by the execution of a
         written instrument subscribed to by the parties hereto.

15.3     The provisions of this Agreement are severable, and in the event that
         any provisions of this Agreement shall be determined to be invalid or
         unenforceable under any controlling body of law, such invalidity or
         unenforceability shall not in any way affect the validity or
         enforceability of the remaining provisions hereof.

15.4     LICENSEE agrees to mark the Licensed Products sold in the United States
         with all applicable United States patent numbers. All Licensed Products
         shipped to or sold in other countries shall be marked in such a manner
         as to conform with the patent laws and practice of the country of
         manufacture or sale.

15.5     The failure of either party to assert a right hereunder or to insist
         upon compliance with any term or condition of this Agreement shall not
         constitute a waiver of that

                                      -15-
<PAGE>

         right or excuse a similar subsequent failure to perform any such term
         or condition by the other party.

                  [REMAINDER OF PAGE LEFT INTENTIONALLY BLANK]

                                      -16-
<PAGE>

IN WITNESS WHEREOF, the parties have hereunto set their hands and seals and duly
executed this Agreement the day and year set forth below.

CHILDREN'S MEDICAL CENTER CORPORATION

By       /s/ Stuart J. Novick
         --------------------------------------------
Name         Stuart J. Novick
         --------------------------------------------
Title        S.R. V.P. / General Counsel
         --------------------------------------------
Date
         --------------------------------------------

ENTREMED, INC.

By       /s/ John W. Holaday
         --------------------------------------------
Name         John W. Holaday
         --------------------------------------------
Title        CHM & CEO
         --------------------------------------------
Date         July 28, 2001
         --------------------------------------------

                                      -17-

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