Two nonlinear Kerr oscillators mutually coupled by parametric pumping arestudied as a source of states entangled in photon numbers. Temporal evolutionof entanglement quantified by negativity shows the effects of sudden death andbirth of entanglement. Entanglement is preserved even in asymptotic statesunder certain conditions. The role of reservoirs at finite temperature inentanglement evolution is elucidated. Relation between generation of entangledstates and violation of Cauchy-Schwartz inequality for oscillator intensitiesis found.
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