Document:

<PAGE>

                                                                   EXHIBIT 10.39

                                    TERM NOTE

$18,800,000                                                          May 7, 2003

         FOR VALUE RECEIVED, GUILFORD PHARMACEUTICALS INC., a corporation
organized and existing under the laws of the State of Delaware (the "Borrower")
hereby promises to pay to the order of WACHOVIA BANK, NATIONAL ASSOCIATION, a
national banking association (together with any and all of its successors and
assigns and/or any other holder of this Note, "Lender"), without offset, in
immediately available funds in lawful money of the United States of America, the
principal sum of EIGHTEEN MILLION EIGHT HUNDRED THOUSAND DOLLARS ($18,800,000)
(or the unpaid balance of all principal advanced against this Note, if that
amount is less), together with interest on the unpaid principal balance of this
Note from day to day outstanding as hereinafter provided.

         1.       Payment Schedule and Maturity Date. The unpaid principal
balance of this Note shall be payable in monthly installments on the dates and
in the amount set forth in Schedule I attached hereto and made a part hereof and
shall be calculated so as to fully amortize the unpaid principal balance of the
Term Loan over a period of two hundred forty (240) months.. Accrued and unpaid
interest on this Note shall be due and payable monthly, commencing on June 1,
2003 and continuing on the first day of each succeeding month thereafter until
all principal and accrued interest owing on this Note shall have been fully paid
and satisfied. On May 1, 2008 (the "Maturity Date"), the final maturity of this
Note, the entire principal balance of this Note then unpaid and all accrued and
unpaid interest then unpaid shall be finally due and payable in full. The
Borrower has elected to authorize the Lender to effect payment of sums due under
this Note by means of debiting the Borrower's account number 2044003395624. This
authorization shall not affect the obligation of the Borrower to pay such sums
when due, without notice, if there are insufficient funds in such account to
make such payment in full on the due date thereof, or if the Lender fails or is
unable to debit the account for any reason.

         2.       Loan Agreement; Security. This Note is the "Term Note" as
defined in that certain Loan and Security Agreement dated as of the date hereof
by and between the Borrower and the Lender (as amended, restated, supplemented
or otherwise modified, the "Loan Agreement"). All capitalized terms used herein
but not specifically defined herein shall have the meanings given such terms in
the Loan Agreement. The security for this Note includes the collateral as more
particularly described in the Loan Agreement.

         3.       Interest Rate.

         (a)      The unpaid principal balance of this Note from day to day
outstanding which is not past due, shall bear interest at a fluctuating rate of
interest equal to the LIBOR-Based Rate. The LIBOR-Based Rate shall adjust and be
reset automatically as of the first day of each calendar month and shall remain
in effect for each such calendar month (each an "Interest Period"). The
LIBOR-Based Rate means the LIBOR Rate, plus fifty (50) basis points per annum.
The "LIBOR Rate" means, with respect to each Interest Period, the rate for U.S.
dollar deposits with a 1-month maturity as reported on Telerate page 3750 as of
11:00 a.m., London

<PAGE>

time, on the second London Business Day before such Interest Period (or if not
so reported, then as determined by the Lender) from another recognized source or
interbank quotation. "Telerate Page 3750" means the British Bankers Association
Libor Rates (determined as of 11:00 a.m. London time) that are published by
Bridge Information Systems, Inc. "Business Day" means a day on which commercial
banks are open for international business (including dealings in U.S. Dollar
deposits in London, England). Interest shall be computed for the actual number
of days which have elapsed, on the basis of a 360-day year.

         (b)      Any principal of, and to the extent permitted by applicable
law, any interest on this Note, and any other sum payable hereunder, which is
not paid when due shall bear interest, from the date due and payable until paid,
payable on demand, at a rate per annum equal to the LIBOR Rate, plus two hundred
fifty (250) basis points.

         4.       Prepayment. Subject to the provisions of this Section 4,
Borrower may prepay the principal balance of this Note, in full at any time or
in part from time to time, without fee, premium or penalty, provided that: (a)
Lender shall have actually received from Borrower prior written notice of (i)
Borrower's intent to prepay, (ii) the amount of principal which will be prepaid
(the "Prepaid Principal"), and (iii) the date on which the prepayment will be
made; (b) each prepayment shall be in the amount of $1,000 or a larger integral
multiple of $1,000 (unless the prepayment retires the outstanding balance of
this Note in full); and (c) each prepayment shall be in the amount of 100% of
the Prepaid Principal, plus accrued unpaid interest thereon to the date of
prepayment, plus any other sums which have become due to Lender under the Loan
Documents on or before the date of prepayment but have not been paid. In
addition, the Borrower agrees to indemnify and reimburse the Lender and to hold
the Lender harmless from any out-of-pocket loss, cost or expense which the
Lender may incur due to (a) a default by the Borrower in payment when due of any
required principal and/or interest payment, (b) the failure of the Borrower to
make any prepayment after the Borrower has given notice of such intention to
make such a prepayment, and/or (c) the making by the Borrower of a prepayment on
a day which is not the last day of an Interest Period, including, without
limitation, any such loss or expense arising from the reemployment of funds
obtained by the Lender to maintain all or any portion of the loan evidenced by
this Note or from fees payable to terminate the deposits from which such funds
were obtained.

         5.       Late Charges. If Borrower shall fail to make any payment under
the terms of this Note within ten (10) days after the date the Lender gives
notice to the Borrower that such payment is due, Borrower shall pay to Lender on
demand a late charge equal to five percent (5%) of such payment. Such ten (10)
day period shall not be construed as in any way extending the due date of any
payment. The "late charge" is imposed for the purpose of defraying the expenses
of Lender incident to handling such delinquent payment. This charge shall be in
addition to, and not in lieu of, any other remedy Lender may have and is in
addition to any fees and charges of any agents or attorneys which Lender may
employ upon the occurrence of a Default (hereinafter defined) hereunder, whether
authorized herein or by law.

         6.       Certain Provisions Regarding Payments. All payments made on
this Note shall be applied, to the extent thereof, to late charges, to accrued
but unpaid interest, unpaid principal (with application being made first to the
balloon payment due on the Maturity Date and then to the

                                      - 2 -

<PAGE>

annual installments in the inverse order of their maturity), and any other sums
due and unpaid to Lender under the Loan Documents, in such manner and order as
Lender may elect in its sole discretion. Remittances in payment of any part of
the indebtedness other than in the required amount in immediately available U.S.
funds shall not, regardless of any receipt or credit issued therefor, constitute
payment until the required amount is actually received by Lender in immediately
available U.S. funds and shall be made without offset, demand, counterclaim,
deduction, or recoupment (each of which is hereby waived) and accepted subject
to the condition that any check or draft may be handled for collection in
accordance with the practice of the collecting bank or banks. Acceptance by the
holder hereof of any payment in an amount less than the amount then due on any
indebtedness shall be deemed an acceptance on account only, notwithstanding any
notation on or accompanying such partial payment to the contrary, and shall not
in any way excuse the existence of a Default.

         7.       Defaults.

                  (a)      It shall be a default ("Default") under this Note and
each of the other Loan Documents if (i) any principal, interest or other amount
of money due under this Note is not paid in full within ten (10) days of the
date the Lender gives the Borrower notice that such payment is past due,
regardless of how such amount may have become due or (ii) there shall occur any
Event of Default under the Loan Agreement. Upon the occurrence of a Default,
Lender shall have the rights to declare the unpaid principal balance and accrued
but unpaid interest on this Note, and all other amounts due hereunder and under
the other Loan Documents, at once due and payable (and upon such declaration,
the same shall be at once due and payable), to foreclose any liens and security
interests securing payment hereof and to exercise any of its other rights,
powers and remedies under this Note, under any other Financing Document, or at
law or in equity.

                  (b)      All of the rights, remedies, powers and privileges
(together, "Rights") of Lender provided for in this Note and in any other
Financing Document are cumulative of each other and of any and all other Rights
at law or in equity. The resort to any Right shall not prevent the concurrent or
subsequent employment of any other appropriate Right. No single or partial
exercise of any Right shall exhaust it, or preclude any other or further
exercise thereof, and every Right may be exercised at any time and from time to
time. No failure by Lender to exercise, nor delay in exercising any Right,
including but not limited to the right to accelerate the maturity of this Note,
shall be construed as a waiver of any Default or as a waiver of any Right.
Without limiting the generality of the foregoing provisions, the acceptance by
Lender from time to time of any payment under this Note which is past due or
which is less than the payment in full of all amounts due and payable at the
time of such payment, shall not (i) constitute a waiver of or impair or
extinguish the right of Lender to accelerate the maturity of this Note or to
exercise any other Right at the time or at any subsequent time, or nullify any
prior exercise of any such Right, or (ii) constitute a waiver of the requirement
of punctual payment and performance or a novation in any respect.

                  (c)      If any holder of this Note retains an attorney in
connection with any Default or at maturity or to collect, enforce or defend this
Note or any other Financing Document in any lawsuit or in any probate,
reorganization, bankruptcy, arbitration or other proceeding, then Borrower
agrees to pay to each such holder, in addition to principal, interest and any
other sums

                                      - 3 -

<PAGE>

owing to Lender hereunder and under the other Loan Documents, all costs and
expenses incurred by such holder in trying to collect this Note or in any such
suit or proceeding, including, without limitation, reasonable attorneys' fees
and expenses, investigation costs and all court costs, whether or not suit is
filed hereon, whether before or after the Maturity Date, or whether in
connection with bankruptcy, insolvency or appeal, or whether collection is made
against Borrower or any guarantor or endorser or any other person primarily or
secondarily liable hereunder.

         8.       WAIVER OF JURY TRIAL. BORROWER AND LENDER EACH WAIVES TRIAL BY
JURY IN ANY ACTION OR PROCEEDING TO WHICH BORROWER AND LENDER MAY BE PARTIES,
ARISING OUT OF, IN CONNECTION WITH OR IN ANY WAY PERTAINING TO, THIS NOTE, THE
LOAN AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS. IT IS AGREED AND UNDERSTOOD
THAT THIS WAIVER CONSTITUTES A WAIVER OF TRIAL BY JURY OF ALL CLAIMS AGAINST ALL
PARTIES TO SUCH ACTION OR PROCEEDINGS, INCLUDING CLAIMS AGAINST PARTIES WHO ARE
NOT PARTIES TO THIS NOTE. THIS WAIVER IS KNOWINGLY, WILLINGLY AND VOLUNTARILY
MADE BY BORROWER, AND BORROWER HEREBY REPRESENTS THAT NO REPRESENTATIONS OF FACT
OR OPINION HAVE BEEN MADE BY ANY INDIVIDUAL TO INDUCE THIS WAIVER OF TRIAL BY
JURY OR TO IN ANY WAY MODIFY OR NULLIFY ITS EFFECT. BORROWER FURTHER REPRESENTS
AND WARRANTS THAT IT HAS BEEN REPRESENTED IN THE SIGNING OF THIS NOTE AND IN THE
MAKING OF THIS WAIVER BY INDEPENDENT LEGAL COUNSEL, OR HAS HAD THE OPPORTUNITY
TO BE REPRESENTED BY INDEPENDENT LEGAL COUNSEL SELECTED OF ITS OWN FREE WILL,
AND THAT IT HAS HAD THE OPPORTUNITY TO DISCUSS THIS WAIVER WITH COUNSEL.

         9.       Confession of Judgment. Upon the occurrence of a Default,
Borrower hereby submits and waives all rights to object to nonexclusive personal
jurisdiction in the State of Maryland and authorizes any attorney designated by
Lender or any clerk of any court of record in Maryland or elsewhere to appear
for Borrower in any court of record and confess judgment against Borrower
without prior hearing in favor of Lender for, and in the amount of, the
outstanding principal balance, accrued and unpaid interest, outstanding fees and
late charges and all other costs of collection under this Note, all accrued and
unpaid interest thereon, all other amounts payable by Borrower to Lender under
the terms of this Note, and costs of suit and attorneys' fees of One Hundred
Thousand Dollars ($100,000). Notwithstanding any other provisions of this
Section, Lender acknowledges that attorneys' fees are stated to be One Hundred
Thousand Dollars ($100,000) solely for purposes of fixing a sum certain for
which judgment can be entered by confession; and Lender agrees that in enforcing
any judgment by confession, Lender shall not demand, solely with respect to
attorneys' fees incurred by Lender in connection with such indebtedness after
such judgment is rendered, any amounts in excess of the actual amount of
reasonable attorneys' fees charged or billed to Lender. Borrower hereby
releases, to the extent permitted by applicable law, all errors and all rights
of exemption, appeal, stay of execution, inquisition and other rights to which
Borrower may otherwise be entitled under the laws of the United States of
America or of any state or possession of the United States of America now in
force and which may hereafter be enacted. Borrower hereby consents to the
immediate execution

                                      - 4 -

<PAGE>

of such judgment. The authority and power to appear for and enter judgment
against Borrower shall not be exhausted by one or more exercises thereof or by
any imperfect exercise thereof and shall not be extinguished by any judgment
entered pursuant thereto. Such authority may be exercised on one or more
occasions or from time to time in the same or different jurisdictions as often
as Lender shall deem necessary and desirable, for all of which this Note shall
be sufficient warrant.

         10.      Service of Process. Borrower hereby consents to process being
served in any suit, action, or proceeding instituted in connection with this
Note by the mailing of a copy thereof by certified mail, postage prepaid, return
receipt requested, to Borrower. Borrower irrevocably agrees that such service
shall be deemed to be service of process upon Borrower in any such suit, action,
or proceeding. Nothing in this Note shall affect the right of Lender to serve
process in any manner otherwise permitted by law and nothing in this Note will
limit the right of Lender otherwise to bring proceedings against Borrower in the
courts of any jurisdiction or jurisdictions.

         11.      Successors and Assigns. The terms of this Note and of the
other Loan Documents shall bind and inure to the benefit of the successors and
assigns of the parties. Lender may, at any time, sell, transfer, or assign this
Note and the other Loan Documents, and any or all servicing rights with respect
thereto, or grant participations therein or issue mortgage pass-through
certificates or other securities evidencing a beneficial interest in a rated or
unrated public offering or private placement. Lender agrees to give Borrower
prompt written notice of any sale, transfer or assignment of this Note and/or
the other Loan Documents by the Lender.

         12.      General Provisions. Time is of the essence with respect to
Borrower's obligations under this Note. Borrower and all sureties, endorsers,
guarantors and any other party now or hereafter liable for the payment of this
Note in whole or in part, hereby severally (a) waive demand, presentment for
payment, notice of dishonor and of nonpayment, protest, notice of protest,
notice of intent to accelerate, notice of acceleration and all other notices
(except any notices which are specifically required by this Note or any other
Financing Document), filing of suit and diligence in collecting this Note or
enforcing any of the security herefor; (b) agree to any substitution,
subordination, exchange or release of any such security or the release of any
party primarily or secondarily liable hereon; (c) agree that Lender shall not be
required first to institute suit or exhaust its remedies hereon against Borrower
or others liable or to become liable hereon or to perfect or enforce its rights
against them or any security herefor; (d) consent to any extensions or
postponements of time of payment of this Note for any period or periods of time
and to any partial payments, before or after maturity, and to any other
indulgences with respect hereto, without notice thereof to any of them; and (e)
submit (and waive all rights to object) to non-exclusive personal jurisdiction
of any state or federal court sitting in the State of Maryland, and venue in the
city or county in which payment is to be made as specified in Section 1 of this
Note, for the enforcement of any and all obligations under this Note and the
Loan Documents; (f) waive the benefit of all homestead and similar exemptions as
to this Note; (g) agree that their liability under this Note shall not be
affected or impaired by any determination that any security interest or lien
taken by Lender to secure this Note is invalid or unperfected; and (h) hereby
subordinate any and all rights against Borrower and any of the security for the
payment of this Note, whether by subrogation, agreement or otherwise, until this
Note is paid in full. A determination that any provision of this Note is
unenforceable or invalid shall not affect the enforceability or validity of any
other provision and

                                      - 5 -

<PAGE>

the determination that the application of any provision of this Note to any
person or circumstance is illegal or unenforceable shall not affect the
enforceability or validity of such provision as it may apply to other persons or
circumstances. This Note may not be amended except in a writing specifically
intended for such purpose and executed by the party against whom enforcement of
the amendment is sought. Lender is hereby authorized to disseminate any
information it now has or hereafter obtains pertaining to the Term Loan,
including, without limitation, any security for this Note and credit or other
information on Borrower, any of its principals and any guarantor of this Note,
to any actual or prospective assignee or participant with respect to the Term
Loan, to any of Lender's affiliates, and to any other parties as necessary or
appropriate in Lender's reasonable judgment, as further provided in the Loan
Agreement. Captions and headings in this Note are for convenience only and shall
be disregarded in construing it. THIS NOTE, AND ITS VALIDITY, ENFORCEMENT AND
INTERPRETATION, SHALL BE GOVERNED BY MARYLAND LAW (WITHOUT REGARD TO ANY
CONFLICT OF LAWS PRINCIPLES) AND APPLICABLE UNITED STATES FEDERAL LAW.

         13.      Notices. Any notice, request, or demand to or upon Borrower or
Lender shall be deemed to have been properly given or made when delivered in
accordance with the Loan Agreement.

         THE LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES
AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT
ORAL AGREEMENTS OF THE PARTIES.

         IN WITNESS WHEREOF, Borrower has duly executed this Note under seal as
of the date first above written.

WITNESS:                             GUILFORD PHARMACEUTICALS INC.

/s/ Asher M. Rubin                   By: /s/ Andrew R. Jordan             (Seal)
---------------------------             ----------------------------------
                                        Name: Andrew R. Jordan
                                        Title: Executive Vice President, Finance
                                               and Administration, Chief
                                               Financial Officer and Treasurer

                                      - 6 -

<PAGE>

                             SCHEDULE A TO TERM NOTE

The Note will be paid in the principal amounts plus accrued interest on the
dates as shown below:

<TABLE>
<CAPTION>
                                              REMAINING PRINCIPAL
                                                  OUTSTANDING
                   PRINCIPAL PAYMENT    (FOLLOWING SCHEDULED PRINCIPAL
PAYMENT DUE DATE          DUE                      PAYMENT)
----------------   -----------------    ------------------------------
<S>                <C>                  <C>
  May 07, 2003              0.00                 18,800,000.00
  Jun 02, 2003         78,333.33                 18,721,666.67
  Jul 01, 2003         78,333.33                 18,643,333.34
  Aug 01, 2003         78,333.33                 18,565,000.01
  Sep 02, 2003         78,333.33                 18,486,666.68
  Oct 01, 2003         78,333.33                 18,408,333.35
  Nov 03, 2003         78,333.33                 18,330,000.02
  Dec 01, 2003         78,333.33                 18,251,666.69
  Jan 02, 2004         78,333.33                 18,173,333.36
  Feb 02, 2004         78,333.33                 18,095,000.03
  Mar 01, 2004         78,333.33                 18,016,666.70
  Apr 01, 2004         78,333.33                 17,938,333.37
  May 03, 2004         78,333.33                 17,860,000.04
  Jun 01, 2004         78,333.33                 17,781,666.71
  Jul 01, 2004         78,333.33                 17,703,333.38
  Aug 02, 2004         78,333.33                 17,625,000.05
  Sep 01, 2004         78,333.33                 17,546,666.72
  Oct 01, 2004         78,333.33                 17,468,333.39
  Nov 01, 2004         78,333.33                 17,390,000.06
  Dec 01, 2004         78,333.33                 17,311,666.73
  Jan 03, 2005         78,333.33                 17,233,333.40
  Feb 01, 2005         78,333.33                 17,155,000.07
  Mar 01, 2005         78,333.33                 17,076,666.74
  Apr 01, 2005         78,333.33                 16,998,333.41
  May 02, 2005         78,333.33                 16,920,000.08
  Jun 01, 2005         78,333.33                 16,841,666.75
  Jul 01, 2005         78,333.33                 16,763,333.42
  Aug 01, 2005         78,333.33                 16,685,000.09
</TABLE>

                                      - 7 -

<PAGE>

<TABLE>
<CAPTION>
                                              REMAINING PRINCIPAL
                                                  OUTSTANDING
                   PRINCIPAL PAYMENT     (FOLLOWING SCHEDULED PRINCIPAL
PAYMENT DUE DATE          DUE                       PAYMENT)
----------------   -----------------     ------------------------------
<S>                <C>                   <C>
  Sep 01, 2005         78,333.33                 16,606,666.76
  Oct 03, 2005         78,333.33                 16,528,333.43
  Nov 01, 2005         78,333.33                 16,450,000.10
  Dec 01, 2005         78,333.33                 16,371,666.77
  Jan 03, 2006         78,333.33                 16,293,333.44
  Feb 01, 2006         78,333.33                 16,215,000.11
  Mar 01, 2006         78,333.33                 16,136,666.78
  Apr 03, 2006         78,333.33                 16,058,333.45
  May 01, 2006         78,333.33                 15,980,000.12
  Jun 01, 2006         78,333.33                 15,901,666.79
  Jul 03, 2006         78,333.33                 15,823,333.46
  Aug 01, 2006         78,333.33                 15,745,000.13
  Sep 01, 2006         78,333.33                 15,666,666.80
  Oct 02, 2006         78,333.33                 15,588,333.47
  Nov 01, 2006         78,333.33                 15,510,000.14
  Dec 01, 2006         78,333.33                 15,431,666.81
  Jan 02, 2007         78,333.33                 15,353,333.48
  Feb 01, 2007         78,333.33                 15,275,000.15
  Mar 01, 2007         78,333.33                 15,196,666.82
  Apr 02, 2007         78,333.33                 15,118,333.49
  May 01, 2007         78,333.33                 15,040,000.16
  Jun 01, 2007         78,333.33                 14,961,666.83
  Jul 02, 2007         78,333.33                 14,883,333.50
  Aug 01, 2007         78,333.33                 14,805,000.17
  Sep 04, 2007         78,333.33                 14,726,666.84
  Oct 01, 2007         78,333.33                 14,648,333.51
  Nov 01, 2007         78,333.33                 14,570,000.18
  Dec 03, 2007         78,333.33                 14,491,666.85
  Jan 02, 2008         78,333.33                 14,413,333.52
  Feb 01, 2008         78,333.33                 14,335,000.19
</TABLE>

                                      - 8 -

<PAGE>

<TABLE>
<CAPTION>
                                              REMAINING PRINCIPAL
                                                 OUTSTANDING
                   PRINCIPAL PAYMENT     (FOLLOWING SCHEDULED PRINCIPAL
PAYMENT DUE DATE          DUE                       PAYMENT)
----------------   -----------------     ------------------------------
<S>                <C>                   <C>
  Mar 03, 2008           78,333.33               14,256,666.86
  Apr 01, 2008           78,333.33               14,178,333.53
  May 01, 2008       14,178,333.53                        0.00
</TABLE>

                                      - 9 -<PAGE>
                              EMPLOYMENT AGREEMENT

     THIS EMPLOYMENT AGREEMENT ("Agreement") is made this 30th day of April,
2003 (the Effective Date) by and between ENTREMED, INC., a Delaware corporation
having its principal office at 9640 Medical Center Drive, Rockville, MD 20850
(the "Company") and Mr. Neil J. Campbell, an individual residing at 25242 Conrad
Court, Damascus MD 20872 ("Mr. Campbell").

     WHEREAS, Mr. Campbell has previously entered into a Change of Control
Agreement with the Company dated August 1, 2002 (See Exhibit 1); and

     WHEREAS, Mr. Campbell and the Company mutually agree that this Employment
Agreement will replace the Change of Control Agreement dated August 1, 2002
(Exhibit 1 attached); therefore

     FOR AND IN CONSIDERATION of the mutual premises, agreements and covenants
contained herein, the parties hereto, intending to be legally bound, do hereby
agrees as follows:

1. Employment Position and Duties

     The Company hereby agrees to employ Mr. Campbell to act as, and to exercise
all of the powers and functions of, its during the Term hereof (as set forth in
paragraph 4 herein) and to perform such acts and duties and to generally furnish
such services to the Company and its subsidiaries (if any) as is customary for a
senior management person with a similar position in like companies; and he shall
have such specific powers, duties and serve as President and Chief Operating
Officer or such other executive positions as determined by the Board of
Directors and responsibilities commensurate with those executive positions as
the Board of Directors of the Company (the "Board") shall from time to time
reasonably prescribe, provided that such duties are consistent with Mr.
Campbell's senior management position. Mr. Campbell hereby agrees to accept such
employment and shall perform and discharge faithfully, diligently, and to the
best of his abilities such duties and responsibilities and shall devote
sufficient working time and efforts to the business and affairs of the Company
and its subsidiaries; provided however, that, to the extent consistent with the
needs of the Company, Mr. Campbell shall be entitled to expend a reasonable
amount of time on civic, public, industry, and philanthropic activities and on
the management of his own investments and assets. This Employment Agreement
replaces and nullifies the Change of Control Agreement between Mr. Campbell and
the Company dated August 1, 2002.

2. Place of Employment

     During his employment hereunder, Mr. Campbell's principle place of
employment shall be located at the Company's corporate headquarters, wherever
located as designated from time to time by the Board; provided however, that
notwithstanding the foregoing Mr. Campbell shall be required to conduct his
duties and responsibilities hereunder (except for routine and customary business
travel) primarily from the executive offices located in Rockville, Maryland.

3. Compensation

     (a) Base Salary. The Company shall pay to Mr. Campbell an annual base
salary ("Base Salary") of three hundred thousand dollars ($300,000) effective
January 1, 2003, payable in accordance with the Company's customary payroll
policy for its executives, and subject to applicable tax and payroll deductions.

     (b) Base Salary Adjustments. Mr. Campbell's Base Salary shall be reviewed
annually by the Company's Board of Directors which may make such upward
adjustments as within its discretion deems appropriate.

     (c) Six Months Salary Payment. Mr. Campbell will be paid six months "Base
Salary" based on the salary in effect on December 31, 2002. This payment will be
made over a period of nine (9) months beginning on January 1, 2003 so long as
Mr. Campbell during this period does not voluntarily leave employment at the
Company. If Mr. Campbell is terminated without cause, Mr. Campbell will receive
the entire six months salary payment as outlined herein. The payments will be
made semi-monthly subject to appropriate withholdings. The total payment under
this provision will be one hundred and thirty-two thousand five hundred dollars
($132,500). Payments that were to be made from January 1, 2003 to the Effective
Date of this agreement will be paid as soon as practical after execution of this
agreement in a lump sum payment.

                                       1
<PAGE>
     (d)  Incentive Compensation. Mr. Campbell's Incentive Compensation, if any,
shall be determined annually by the Company's Board of Directors.

     (e)  Vesting of Options. All unvested options granted to Mr. Campbell prior
to the January 1, 2003 will vest upon execution of this agreement either
pursuant to the terms of this Agreement or the terms of the grants under which
such stock options were granted.

     (f)  Certain Other Benefits. During the Term of this Agreement, Mr.
Campbell shall be entitled to equally participate in any and all employee
benefit plans and arrangements which are available to senior executive officers
of the Company, including without limitation, group medical and life insurance
plans.

4. Term

     The term of Mr. Campbell's employment with the Company shall be for a
one-year period commencing January 1, 2003, and continuing through December 31,
2003 (the "Initial Term"); provided, however, that this Agreement may be renewed
by mutual agreement in writing for successive one-year periods (each a
"Successor Term"; and together with the Initial Term, generally referred to "The
Term").

5. Stock Options

     Periodic stock and incentive stock option grants to Mr. Campbell if any,
shall be determined by the Board of Directors.

6. Unauthorized Disclosure

     While employed by the Company and for five years thereafter, Mr. Campbell
shall not, without the written consent of the Company, disclose to any person,
other than person to whom disclosure is reasonably necessary or appropriate in
connection with the performance by Mr. Campbell of his duties as an executive
officer of the Company, any material confidential information obtained by Mr.
Campbell while in the employ of the Company with respect to the businesses of
the Company or any of its subsidiaries, including but not limited to,
operations, pricing, contractual or personnel matters, products, discoveries,
improvements, trade secrets, license agreements, marketing information,
suppliers, dealers, customers, or methods of distribution, or any other
confidential information the disclosure of which Mr. Campbell knows, or in the
exercise of reasonable care should know will be damaging to the Company;
provided, however, that confidential information shall not include any
information known generally to the public (other than as a result of
unauthorized disclosure by Mr. Campbell) or any information so otherwise
considered by the Company to be confidential.

7. Indemnification of Mr. Campbell

     The Company shall indemnify Mr. Campbell if Mr. Campbell is made a party,
or threatened to be made a party, to any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative, or
investigative, because Mr. Campbell is or was an officer or director or the
Company or any of its subsidiaries, affiliates, or successors, against expenses
(including reasonable attorneys fees and disbursements), judgments, fines and
amounts paid in settlement actually and reasonably incurred by him in connection
with such action, suit or proceeding to the fullest extent and in the manner set
forth in a permitted by the General Corporation Law of the State of Delaware and
any other applicable law in effect from time to time and reimburse such costs as
incurred, but in any event no later than 30 days from date of presentment of
such costs to the Company. Such presentment may be, at the option of Mr.
Campbell, in the form of an invoice directly from Mr. Campbell's attorney or
such other provider as may be reasonably selected by the Company, and in this
event, the Company agrees to reimburse said provider directly, as opposed to
having Mr. Campbell pay the invoice and then seek reimbursement from the
Company.

8. Termination

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

                                       2
<PAGE>
elapsed during the fiscal year through the end of the month in which Mr.
Campbell died and denominator of which shall be twelve.

     (b) Termination Upon Disability or Incapacity. In the event Mr. Campbell
has been disabled for a period of one hundred eighty (180) days the Company may
terminate Mr. Campbell's employment hereunder at the end of any calendar month
thereafter by giving written notice of termination to Mr. Campbell in the event
that Mr. Campbell's incapacity due to physical or mental illness prevents the
proper performance of the duties of President and Chief Operating Officer of
other executive position determined by the Board of Directors as set forth
herein or established pursuant hereto for a substantial portion of any
six-month period of Mr. Campbell's Term of employment hereunder. Any questions
as to the existence or extent of illness or incapacity of Mr. Campbell, upon
which the Company and Mr. Campbell cannot agree, shall be determined by a
qualified independent physician selected by the Company and approved by Mr.
Campbell (or, if Mr. Campbell is unable to give such approval, by any adult
member of the immediate family or the duly appointed guardian of Mr. Campbell).
The determination of such physician certified in writing to the Company and to
Mr. Campbell shall be final and conclusive for all purposes of this Agreement.
In the event of any such termination pursuant to this subparagraph 8(b), Mr.
Campbell shall be entitled to receive his Base Salary through the last day of
the six months in which this Agreement is terminated.

     If in respect of the fiscal year in which Mr. Campbell's employment
terminates pursuant to this subparagraph 8(b) he would otherwise have been
entitled to receive incentive compensation under paragraph 3(d) by reason of
the operations of the Company during such fiscal year, Mr. Campbell shall be
entitled to receive a pro rata portion of such incentive compensation
determined by multiplying the dollar amount of the incentive compensation by a
fraction, the numerator of which shall be the number of complete calendar
months that elapsed during the fiscal year through the end of the month in
which Mr. Campbell's employment terminated pursuant to this subparagraph 8(b)
and the denominator of which shall be twelve.

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

     (d) Termination without Cause. The Company shall have the right to
terminate Mr. Campbell's employment under this Agreement at any time, without
cause, by giving Mr. Campbell not less than sixty (60) days prior written notice
of such termination. The Company shall pay to Mr. Campbell full compensation for
12 months from the date of termination payable on a semi-monthly basis. By
acceptance of the first monthly payment hereunder, and in consideration of the
receipt of such compensation under this Agreement, Mr. Campbell agrees to
release and forever discharge the Company its subsidiaries and affiliates,
successors, predecessors officers, directors, employees and agents and employee
benefit plans from all claims, demands, causes of action arising out of facts or
occurrences prior to the date of Mr. Campbell's termination, whether known or
unknown, and the parties hereto contemplate that this release shall be construed
broadly. Upon termination, the Company shall have no other financial obligations
to Mr. Campbell under any compensation or benefit plan, program or policy, and
Mr. Campbell's participation in the Company compensation and benefit plans,
programs and policies shall cease as of the date of Mr. Campbell's termination,
except that Mr. Campbell shall have such right to continued group health plan
coverage as is provided under COBRA. The Company will make Mr. Campbell's COBRA
premium payments for the earlier of, 12 months after the termination date or the
date Mr. Campbell begins employment with a new employer. Notwithstanding the
foregoing, if in respect of the fiscal year in which Mr. Campbell's employment
terminates pursuant to this subparagraph (d) he would otherwise have been
entitled to receive incentive compensation under paragraph 3(d) by reason of the
operations of the Company during such fiscal year. Mr. Campbell shall be
entitled to receive a pro rata portion of such incentive compensation determined
by multiplying the dollar amount of the incentive compensation by a fraction,
the numerator of which shall be the number of complete calendar months that
elapsed during the fiscal year through the end of the month in which Mr.
Campbell's employment terminated pursuant to this subparagraph (d) and the
denominator of which shall be twelve.

                                       3
<PAGE>
     (e) Non-competition. For a period of twelve months after termination for
any reason of Mr. Campbell's active employment with the Company, Mr. Campbell
agrees not to, as an individual, principal, agent, employee, consultant or
otherwise, directly or indirectly in the United States render any services to
any firm or company or any division or subsidiary of any firm or company whose
primary activity is the research, development or commercialization of specific
product compounds and/or analogs or derivatives of those product compounds that
are currently being researched, developed and/or commercialized by the Company.
Moreover, for a period of twelve (12) months after the termination of Mr.
Campbell's employment with the Company, Mr. Campbell agrees not to take any
action, without the prior written consent of the Company, to assist Mr.
Campbell's successor employer or any other entity in recruiting or hiring any
other employee who had worked for the Company during any of the time period
when Mr. Campbell worked for the Company. This includes (1) identifying to such
successor employer or its agents or such other entity, the person or persons
who have special knowledge concerning the Company's inventions, processes,
methods or confidential affairs; or (2) commenting to Mr. Campbell's successor
employer or its agents or such other entity about the quantity of work, quality
of work, special knowledge or personal characteristics of any person who is
still employed by the Company. Mr. Campbell also agrees that he will not
provide such information to a prospective employer during interviews preceding
possible employment.

9. Reimbursement of Legal Fees

     The Company agrees to reimburse Mr. Campbell for reasonable attorneys fees
incurred if Mr. Campbell or the Company sues on this Agreement and the Company
is not the prevailing party.

10. Application for Insurance

     The Company at its option has the right to obtain a "key-man" life
insurance policy, at the Company's expense, with the Company being the sole
beneficiary of such policy. Mr. Campbell hereby agrees to undergo the necessary
physical examinations and disclose any pertinent disclaimers and information to
obtain said policy.

11. Miscellaneous

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

     (b) Governing Law. This Agreement shall be governed as to its validity,
interpretation and effect by the laws of the State of Maryland.

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

     (d) Entire Agreement; Amendments. This Agreement constitutes the entire
Agreement and understanding of the Company and Mr. Campbell with respect to the
terms of Mr. Campbell's employment with the Company and supersedes all prior
discussions, understandings and agreements with respect thereto except to those
agreements relating to the assignment of patents and inventions to which Mr.
Campbell acknowledges signing a Combined Non-disclosure and Patent Employee
Agreement (a copy of which is attached hereto as Exhibit 2) which will remain
in effect.

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

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

                                       4
<PAGE>
     (g) Notice. Any notice or communication required or permitted under this
Agreement shall be made in writing and shall be delivered by hand, or mailed by
registered or certified mail, return receipt requested, first class postage
prepaid, addressed as follows:

If to Mr. Campbell:
25242 Conrad Court
Damascus, MD 20872

If to the Company:
EntreMed, Inc.
9640 Medical Center Drive
Rockville, Maryland 20850
Attn.: Chief Financial Officer

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

IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the date
first above

/s/ Neil J. Campbell
----------------------
Neil J. Campbell

ENTREMED, INC.

By:
    ---------------------------
    Michael Tarnow
    Chairman, EntreMed Board of Directors

                                       5
<PAGE>

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

If to Mr. Campbell:
25242 Conrad Court
Damascus, MD 20872

If to the Company:
EntreMed, Inc.
9640 Medical Center Drive
Rockville, Maryland 20850
Attn.: Chief Financial Officer

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

IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the date
first above

/s/ Neil J. Campbell
------------------------------------------
Neil J. Campbell

ENTREMED, INC.

By: /s/ Michael Tarnow
    ---------------------------------------
    Michael Tarnow
    Chairman, EntreMed Board of Directors

                                       6

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