<PAGE>
EXHIBIT 10.38


                                                                    CONFIDENTIAL
                             SUBSCRIPTION AGREEMENT
                             (European Subscribers)


TO:     LIFE MEDICAL SCIENCES, INC.

AND TO: CLUBB BIOCAPITAL LIMITED

RE:     SUBSCRIPTION FOR UNITS


1.       Subscription

         The undersigned (the "Purchaser")  hereby subscribes for on and subject
         to the  terms  and  conditions  set forth  herein,  from  Life  Medical
         Sciences,  Inc.  (the  "Corporation")  605,000  units  (the  "Purchased
         Units")  each  comprised  of one (1)  share  of  Series  C  Convertible
         Preferred  Stock,  par value  $0.01 per share,  of the  Corporation  (a
         "Preferred Share"); one warrant (a "Short Term Warrant") to purchase up
         to 10 shares of common stock of the Corporation ("Common Shares") at an
         exercise  price of $0.12 per Common  Share  (the  "Short  Term  Warrant
         Exercise Price"); and one warrant (a "Two Year Warrant") to purchase up
         to 10 Common Shares at an exercise price of $0.12 per Common Share (the
         "Two Year Warrant Exercise Price").  The Purchased Units are being sold
         to the Purchaser in consideration for $1.20 per Unit (the "Subscription
         Price"),  and as part of an offering (the "Offering") of up to $726,000
         of Units. The Short Term Warrants and Two Year Warrants,  together with
         the broker  warrants  referred to in Section 10 hereof,  are  sometimes
         referred to collectively as the "Warrants".  There is no minimum number
         of Units  being  offered,  and the  Corporation  reserves  the right to
         accept subscriptions as and when received.Clubb Biocapital Limited (the
         "Agent") is serving as a placement  agent for the Offering  pursuant to
         an  agency  agreement  to be  entered  into with the  Corporation  (the
         "Agency Agreement").

2.       Description of Units

         The Preferred Shares shall have the attributes  described in Appendix I
         hereto.  Each Short Term  Warrant  shall be  exercisable  to acquire 10
         Common  Shares at the Short Term  Warrant  Exercise  Price for a period
         commencing  on the date of issue and  expiring  on June 30,  2003.  The
         Short Term Warrants shall be issued in substantially  the form attached
         hereto as Appendix II. Each Two Year Warrant  shall be  exercisable  to
         acquire 10 Common Shares at the Two Year Warrant  Exercise  Price for a
         period  commencing on the date of issue. The Two Year Warrants shall be
         issued in substantially the form attached hereto as Appendix III.


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3.       Use of Proceeds

         The proceeds of the Offering  will be used by the  Corporation  to fund
         product development costs and for working capital and general corporate
         purposes including the settlement of certain trade liabilities.

4.       Documents to be provided by Purchaser

         The Purchaser  must complete,  sign and return two executed  copies of:
         (i) this Subscription Agreement, and (ii) the Investor Rights Agreement
         a copy of which is attached as Appendix IV hereto, and the Subscription
         Price must be paid in U.S.  dollars by wire  transfer to the  following
         account:

                  Bank of America NT & SA
                  New York, New York
                  CIBC Toronto Account No. 6550 8 26157
                  Swift Address:  BOFAUS3N
                  Chips Member ID: 015035
                  ABA No. 026009593

                  For Further Credit To:
                  Canadian Imperial Bank of Commerce
                  Main Branch, Commerce Court West
                  Toronto, Ontario M5L 1A2
                  Transit No. 00002
                  Beneficiary: Blake, Cassels & Graydon LLP
                  Account No. 02 44414
                  Reference: JACK - 65283/8

         or in such other manner as may be  specified  by the Agent.  At Closing
         (as  defined  below),  the  Subscription  Price will be released to the
         Corporation  by Blake,  Cassels & Graydon  LLP.  In either  case,  such
         deliveries   hereinafter   referred  to  as  the  "Purchaser's  Closing
         Deliveries."

5.       Closing and Delivery of Share and Warrant Certificates

         Delivery  and  sale  of the  Purchased  Units  will be  completed  (the
         "Closing")  at the offices of the  Corporation  (or such other place or
         places  as the  Corporation  and the Agent  may  agree)  at 10:00  a.m.
         (Eastern  Standard  Time)  (the  "Closing  Time")  on such  date as the
         Corporation and the Agent may agree (the "Closing  Date"),  expected to
         be no later than March 31, 2003.

         Certificates representing the Preferred Shares, Short Term Warrants and
         the Two Year Warrants  comprising the Purchased Units will be delivered
         at Closing against  delivery by the Purchaser of therequisite  funds by
         wire transfer. The Purchaser,  on its own behalf or on behalf of others
         for whom it is contracting  hereunder,  hereby appoints the Agent, with
         full power of  substitution,  as its true and lawful attorney and agent
         with the full  power

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                                       3


         and authority in its place and stead to swear, execute, file and record
         any  document  necessary to give effect to the delivery and sale of the
         Purchased  Units,  to terminate this  subscription on its behalf in the
         event  that  any  condition  precedent  to the  Offering  has not  been
         satisfied,  to execute a receipt for the Purchased  Units and all other
         documentation,  and to  modify  or waive  any  conditions  or grant any
         waivers on its behalf in connection with this transaction including any
         extension to the deadline date for Closing agreed with the Corporation.

6.       Certain Matters Relating to the Offering

         The Purchaser, on its own behalf (or on behalf of others for whom it is
         contracting hereunder) acknowledges and agrees that:

(a)      it (or  others  for  whom it is  contracting  hereunder)  has not  been
         provided  with a prospectus  or an offering  memorandum  or any similar
         document in connection with its purchase of Units;

(b)      its decision to execute this  Subscription  Agreement  and the Investor
         Rights  Agreement and to subscribe for the Purchased  Units (on its own
         behalf or on behalf of others for whom it is contracting hereunder) has
         not been based upon any verbal or written representations as to fact or
         otherwise made by or on behalf of the Agent or the Corporation and that
         the  Purchaser's  decision  (or the  decision  of  others  for whom the
         Purchaser is  contracting  hereunder)  is based  entirely upon publicly
         available information  concerning the Corporation (any such information
         having   been   delivered   to  the   Purchaser   without   independent
         investigation or verification by the Agent);

(c)      the  Agent  and  its  directors,   officers,   employees,   agents  and
         representatives  assume no  responsibility  or  liability of any nature
         whatsoever for the accuracy or adequacy of any such publicly  available
         information or as to whether all information concerning the Corporation
         required to be disclosed by it has been generally disclosed;

(d)      neither the  Preferred  Shares nor the Short Term  Warrants nor the Two
         Year Warrants comprising the Purchased Units have been registered under
         the U.S.  Securities  Act of 1933, as amended (the  "Securities  Act"),
         with the result that such Preferred Shares, Short Term Warrants and the
         Two  Year   Warrants  (and  the  Common  Shares  into  which  they  are
         convertible or  exercisable)  are  "restricted  securities"  within the
         meaning of Regulation S and Rule 144  promulgated  under the Securities
         Act and may not be  offered or sold  within the United  States or to or
         for the account or benefit of a U.S.  Person (as defined in Rule 902(o)
         of Regulation S promulgated  under the Securities  Act) except pursuant
         to registration under the Securities Act or an exemption therefrom;

(e)      the  Purchaser  (or  others  for  whom  the  Purchaser  is  contracting
         hereunder)  has been  advised to consult  its own legal  advisors  with
         respect to any  applicable  resale  restrictions  and the Purchaser (or
         others  for whom the  Purchaser  is  contracting  hereunder)  is solely
         responsible  (and neither the  Corporation  nor the Agent is in any way
         responsible) for compliance with applicable resale restrictions;


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                                       4


(f)      the Purchaser understands that each certificate  representing Preferred
         Shares,  Short  Term  Warrants  and Two Year  Warrants  comprising  the
         Purchased  Units,  and any securities  issued on conversion or exercise
         thereof or in exchange  therefor  shall bear a legend in  substantially
         the following form (in addition to any legend required under applicable
         state securities laws):

                  "THE  SECURITIES  REPRESENTED  HEREBY HAVE NOT BEEN REGISTERED
                  UNDER THE UNITED  STATES  SECURITIES  ACT OF 1933,  AS AMENDED
                  (THE  "1933  ACT")  AND  MAY  BE  OFFERED,  SOLD,  PLEDGED  OR
                  OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION ONLY
                  (A) TO THE  CORPORATION,  (B)  OUTSIDE  THE  UNITED  STATES IN
                  ACCORDANCE WITH RULE 903 OR 904 OF REGULATION S UNDER THE 1933
                  ACT  OR (C)  PURSUANT  TO AN  AVAILABLE  EXEMPTION  FROM  SUCH
                  REGISTRATION  REQUIREMENTS,  PROVIDED IN SUCH LATTER CASE THAT
                  THE HOLDER UPON  REQUEST  PRIOR TO SUCH SALE  FURNISHES TO THE
                  CORPORATION  AN OPINION OF COUNSEL OF  RECOGNIZED  STANDING TO
                  THAT EFFECT REASONABLY SATISFACTORY TO THE CORPORATION."

(g)      the  Purchaser  (or  others  for  whom  the  Purchaser  is  contracting
         hereunder)  (i) is not a  "distributor"  of  securities as that term is
         defined  in  Regulation  S  nor  a  dealer  in  securities,   and  (ii)
         acknowledges  that it has not engaged in any hedging  transactions with
         regard to the Purchased Units; and

(h)      during the first quarter of 2003,  the  Corporation  intends to acquire
         certain assets of Phairson Ltd., a company  organized under the laws of
         the United  Kingdom,  in exchange  for the  issuance  of  approximately
         6,900,000 Common Shares (the "Acquisition").

7.       Representations, Warranties and Covenants of the Corporation

         The Corporation  represents,  warrants and covenants to the Agent,  the
         Purchaser  (and  to  any  others  on  whose  behalf  the  Purchaser  is
         contracting  hereunder)  as of the date  hereof  and as of the  Closing
         Date, which representations, warranties and covenants shall survive any
         investigation  made by the Agent,  the  Purchaser  or such others for a
         period of two years after the Closing, that:

(a)      the  Corporation  is a validly  existing  corporation  in good standing
         under the laws of the jurisdiction in which it is incorporated, and the
         Corporation has no  subsidiaries;the  Corporation is duly qualified and
         authorized to do business in the jurisdiction(s) in which it carries on
         business  or to own  property  where  required  under  the  laws of the
         jurisdiction(s) in which any such property is located;


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(b)      the  Corporation  is current with all material  filings  required to be
         made  under the laws of any  jurisdiction  in which it  carries  on any
         material  business,  and the  Corporation  has all necessary  licenses,
         leases, permits, authorizations and other approvals necessary to permit
         it to conduct its  business as  currently  conducted,  except where the
         failure  to have any such  license,  lease,  permit,  authorization  or
         approval would not have a material  adverse  effect on the  Corporation
         and its business;

(c)      the audited  financial  statements of the Corporation as at and for the
         year ended December 31, 2001 present fairly, in all material  respects,
         the  financial  position of the  Corporation  as at that date,  and the
         results of its operations and the changes in its financial position for
         the 12-month  period then ended in accordance  with generally  accepted
         accounting  principles,  and the unaudited financial  statements of the
         Corporation  as at and for the nine  months  ended  September  30, 2002
         present fairly, in all material respects, the financial position of the
         Corporation  as at that date, and the results of its operations and the
         changes in its financial position for the nine-month period then ended;
         since September 30, 2002,  there has been no material adverse change in
         the  business,   affairs  or  financial  or  other   condition  of  the
         Corporation  or any of its  subsidiaries,  except as  disclosed  in the
         notes to the financial statements for the nine-month period then ended;

(d)      the  Corporation has all requisite power and authority to carry out its
         obligations under this Agreement,  the Investor Rights  Agreement,  the
         Preferred Shares, the Short Term Warrants and the Two Year Warrants;

(e)      this  Agreement  has  been,  and the  Investor  Rights  Agreement,  the
         Preferred  Shares,  the Short Term Warrants and the Two Year  Warrants,
         will be on the Closing Date, duly authorized, executed and delivered by
         the Corporation and constitute or on the Closing Date will  constitute,
         legal, valid and binding obligations of the Corporation  enforceable in
         accordance with their terms except that: (i) the enforcement  hereof or
         thereof may be limited by bankruptcy,  insolvency,  reorganization  and
         other laws affecting the  enforcement of creditors'  rights  generally,
         (ii) rights of indemnity  thereunder  may be limited  under  applicable
         law,  and  (iii)  equitable  remedies,   including  without  limitation
         specific  performance and injunctive relief, may be granted only in the
         discretion of a court of competent jurisdiction;

(f)      the Preferred Shares comprising part of the Units are or on the Closing
         Date will be duly and validly authorized and, when issued and delivered
         against payment therefor,  will be duly and validly issued,  fully paid
         and non-assessable shares in the capital stock of the Corporation;

(g)      the  Corporation  will  reserve a  sufficient  number of Common  Shares
         unissued as may be required to be issued  pursuant to the conversion of
         the  Preferred  Shares and the exercise of the Short Term  Warrants and
         the Two Year Warrants  comprising  the Purchased  Units and when issued
         and delivered upon such conversion or exercise, such Common Shares will
         be duly and validly issued as fully paid and  non-assessable  shares in
         the capital stock of the Corporation;


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                                       6


(h)      the  authorized  capital of the  Corporation  consists  of  100,000,000
         Common Shares and 5,000,000 shares of preferred  stock,  $.01 par value
         per share. Of the preferred stock,  500,000 shares have been designated
         as Series A Convertible  Preferred  Stock,  1,116,500  shares have been
         designated as Series B Convertible  Preferred Stock and, on or prior to
         the Closing  Date,  not more than 605,000  shares will be designated as
         Preferred  Shares. As of December 31, 2002, there are 16,759,316 Common
         Shares outstanding,  no shares of Series A Convertible  Preferred Stock
         outstanding,  1,112,500 shares of Series B Convertible  Preferred Stock
         outstanding and no Preferred Shares  outstanding  (other than Preferred
         Shares  issued  or to be  issued  in the  Offering.  In  addition,  the
         Corporation  has (i)  outstanding a  convertible  note held by Dimotech
         (the  "Convertible  Note") in the principal  amount of $40,000 which is
         convertible,  at the holder's option,  into Common Shares at a price of
         $1.00 per share or into any class of preferred shares at the price paid
         by  the  purchasers  thereof;  provided,  however,  that  if  any  such
         preferred  shares are  convertible  into Common  Shares (as is the case
         with the Preferred Shares),  the holder would be entitled to receive no
         more than the number of preferred  shares  which,  at the then existing
         conversion  rate,  would  convert  into  40,000  Common  Shares,   (ii)
         outstanding a convertible note held by Polymer  Technology  Group, Inc.
         ("PTG") (the "PTG Convertible Note") in the principal amount of $70,000
         which is convertible,  at the holder's option,  into Common Shares at a
         price of $1.00 per share and (iii)  available for issuance  pursuant to
         options which have been granted under its 1992 Stock Option Plan,  2000
         Stock  Option  Plan  and  2001  Stock  Option  Plan,  an  aggregate  of
         approximately  9,400,000  Common  Shares and  outstanding  warrants  to
         purchase an aggregate of approximately 12,300,000 Common Shares,

(i)      the  Corporation  is not,  and at the Closing  Date will not be: (i) in
         breach or violation of any of the terms or provisions of, or in default
         under,  this  Agreement,  any  other  Subscription  Agreement  for  the
         purchase of Units,  the Agency  Agreement,  the Preferred Shares or the
         Warrants,  any indenture,  mortgage,  deed of trust or loan  agreement,
         (except as disclosed in the Corporation's SEC filings), other agreement
         (written or oral) or  instrument  to which it is a party or by which it
         is bound or to which any of its  property or assets is  subject,  which
         breach or  violation  or the  consequences  thereof  would  result in a
         material adverse change to it or its business;  or (ii) in violation of
         the provisions of its articles, by-laws,  resolutions or any statute or
         any other rule or  regulation  of any court or  governmental  agency or
         body  having  jurisdiction  over  it or  any of  its  properties  which
         violation  or the  consequences  thereof  would  result  in a  material
         adverse change to it or its business;

(j)      the issue and sale of the  Purchased  Units and the issue of  Preferred
         Shares,  Short Term Warrants,  Two Year Warrants,  any Common Shares on
         the  conversion  of  Preferred  Shares or the  exercise  of Short  Term
         Warrants and Two Year Warrants, and the performance and consummation of
         the transactions  contemplated  herein will not conflict with or result
         in a breach  or  violation  of any of the  terms or  provisions  of, or
         constitute a default  under,  any indenture,  mortgage,  deed of trust,
         loan  agreement or other  agreement  (written or oral) or instrument to
         which the Corporation or any subsidiary is bound or to which any of the
         property or assets of the  Corporation  or any  subsidiary  is subject,
         which breach or violation or the consequences thereof would result in a
         material  adverse change to the Corporation and its business,  nor will
         any  such  action  conflict  with or  result  in any

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                                       7


         violation of the provisions of the articles,  by-laws or resolutions of
         the Corporation or any statute or any order,  rule or regulation of any
         court or  governmental  agency  or body  having  jurisdiction  over the
         Corporation or any subsidiary or any of its properties  which violation
         or the  consequences  thereof would result in a material adverse change
         to the Corporation or its business;

(k)      the  Corporation  has  established  on its  books  reserves  which  are
         adequate  for the payment of all taxes not yet due and  payable;  there
         are no liens or  other  liabilities  for  taxes  on the  assets  of the
         Corporation except for taxes not yet due; there are no audits of any of
         the tax returns of the Corporation which are known by the Corporation's
         management to be pending and there are no claims which have been or may
         be  asserted  relating  to any such tax returns  which,  if  determined
         adversely, would result in the assertion by any government or agency of
         any  deficiency  having a material  adverse  effect on the  properties,
         business or assets of the Corporation;

(l)      the Corporation has good and valid title to its properties,  leaseholds
         and assets, including without limitation the properties, leaseholds and
         assets reflected in the balance sheet as of September 30, 2002 referred
         to in clause  7(d)  above,  except  properties,  leaseholds  and assets
         disposed of since such date at fair market value in the ordinary course
         of business,  and has good title to all its leasehold estates,  in each
         case subject to no mortgage, pledge, lien, lease, encumbrance,  charge,
         rights of first refusal or options to purchase, whether or not relating
         to  extensions  of credit or the  borrowing  of  money,  other  than as
         disclosed  in such  balance  sheet  except as incurred in the  ordinary
         course of business since the date of such balance sheet,  and except in
         any event (i) for a security  interest  in the  Corporation's  tangible
         assets to secure  payment of the  Convertible  Note, and (ii) where the
         failure  to hold good title or the  existence  of a  mortgage,  pledge,
         lien, lease,  encumbrance,  charge, right of first refusal or option to
         purchase would not have a material adverse effect on the Corporation or
         its  business;  there exists no  condition  which  interferes  with the
         economic  value or use of such  properties  and assets and all tangible
         assets are in good working  condition  and repair  (subject to ordinary
         wear and tear) except where the existence of any such  condition  would
         not have a material adverse effect on the Corporation or its business;

(m)      the Corporation  owns, or has applied for registration of, all patents,
         trade-marks,  service marks, trade names, and copyrights  necessary for
         the  conduct of its  business,  except  where the  failure to so own or
         apply for registration  would not have a material adverse effect on the
         Corporation or its business; to the best of the knowledge,  information
         and belief of the Corporation,  none of the past or present  activities
         of  the  Corporation  or  the  products,  services  or  assets  of  the
         Corporation   infringe  or  constitute  an  unauthorized   use  of  any
         proprietary  rights of others, and the Corporation has not received any
         notice of infringement of, or conflict with,  asserted rights of others
         with respect to any patent,  trade-mark,  service mark,  trade name, or
         copyright that,  individually or in the aggregate, if the subject of an
         unfavourable  decision,  ruling, or finding, would result in a material
         adverse change to the Corporation or its business;

(n)      the Corporation has taken  reasonable  measures to protect and preserve
         the  confidentiality  of  all  trade  secrets  and  other  non-patented
         proprietary   information  of  the   Corporation,

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                                       8


         including without  limitation the procurement of proprietary  invention
         assignments  and  non-disclosure  and  non-competition  agreements from
         employees, consultants, subcontractors, customers and other persons who
         have access to such information;

(o)      the  Corporation has filed all necessary  federal,  state and municipal
         property, income and franchise tax returns and has paid all taxes shown
         as due thereon or otherwise owed by it to any taxing  authority  except
         those  contested in good faith and for which  appropriate  amounts have
         been  reserved  in  accordance  with  generally   accepted   accounting
         principles;  there is no tax deficiency  which has been, or to the best
         of the knowledge,  information and belief of the Corporation  might be,
         asserted  against the  Corporation  which would  materially  affect the
         business or operations of the Corporation; the Corporation has paid all
         applicable federal and state payroll and withholding taxes;

(p)      there is no collective bargaining or other union agreement to which the
         Corporation  is a party or by which it is bound,  or which is currently
         being  negotiated;  the  Corporation  does  not  sponsor,  maintain  or
         contribute  to  any  pension,  retirement,  profit  sharing,  incentive
         compensation,  bonus or other employee benefit plan,  including without
         limitation any employee benefit plan covered by Title 4 of the Employee
         Retirement Income Security Act of 1974 ("ERISA") or any "multi-employer
         plan" as defined in Section  4001(a)(3) of ERISA, or any other employee
         benefit plan; to the best of the knowledge,  information  and belief of
         the  Corporation,  (i) no employee of the  Corporation is a party to or
         bound by any  agreement,  contract  or  commitment,  or  subject to any
         restrictions,  particularly  but without  limitation in connection with
         any previous  employment  of any such  person,  which would result in a
         material  adverse change to the Corporation and its business,  and (ii)
         no  senior  officer  has  any  present  intention  of  terminating  his
         employment  with the  Corporation,  and the  Corporation has no present
         intention of terminating any such employment; and

(q)      there is no adverse claim, action,  proceeding or investigation pending
         or,  to the  knowledge,  information  and  belief  of the  Corporation,
         threatened,  which  questions  the validity of the issue or sale of the
         Units or the issue of any Preferred  Shares,  Short Term Warrants,  Two
         Year  Warrants  or any Common  Shares on  conversion  of the  Preferred
         Shares or exercise of the Short Term Warrants, Two Year Warrants or the
         validity  of any  action  taken or to be taken  by the  Corporation  in
         connection  with this  Agreement  or the Investor  Rights  Agreement or
         which would  result in any  material  adverse  change in the  financial
         condition,  results  of  operations,   business  or  prospects  of  the
         Corporation.

8.       Representations, Warranties and Covenants of the Purchaser

         The Purchaser hereby represents, warrants and covenants to and with the
         Agent  and  the  Corporation  (which  representations,  warranties  and
         covenants shall survive the Closing) that:

(a)      in the case of the subscription by the Purchaser for Units as principal
         for its own account and not for the  benefit of any other  person,  the
         Purchaser is purchasing  the  Purchased  Units as principal for its own
         account,  and not for the benefit of any other  person or company,  and
         this Subscription Agreement and the Investor Rights Agreement have been
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                                       9


         authorized,  executed and delivered by, and constitute legal, valid and
         binding agreements of the undersigned;

(b)      in the case of the subscription by the Purchaser for Units as agent for
         a disclosed principal, each beneficial purchaser of the Purchased Units
         for whom the Purchaser is acting is purchasing as principal for its own
         account and not for the benefit of any other  person and the  Purchaser
         is an agent with due and proper authority to execute this  Subscription
         Agreement, the Investor Rights Agreement and all other documentation in
         connection  with the purchase of the  Purchased  Units on behalf of the
         beneficial  purchaser and this Subscription  Agreement and the Investor
         Rights Agreement have been duly  authorized,  executed and delivered by
         or on behalf of, and constitute legal, valid and binding agreements of,
         the disclosed principal;

(c)      in the case of the purchase by the  Purchaser of Units as trustee or as
         agent for a principal  which is  undisclosed  or  identified by account
         number  only,  this  Subscription  Agreement  and the  Investor  Rights
         Agreement  have been duly  authorized,  executed and  delivered by, and
         constitute  legal,  valid and binding  agreements  of, the  undersigned
         acting in such capacity;

(d)      if the  Purchaser  is a  corporation,  the  Purchaser  is a  valid  and
         subsisting  corporation,  has  the  necessary  corporate  capacity  and
         authority to execute and deliver this  Subscription  Agreement  and the
         Investor Rights  Agreement and to observe and perform its covenants and
         obligations  hereunder  and  thereunder  and has  taken  all  necessary
         corporate  action  in  respect  thereof  or,  if  the  Purchaser  is  a
         partnership,  syndicate or other form of  unincorporated  organization,
         the Purchaser has the necessary legal capacity and authority to execute
         and  deliver  this  Subscription  Agreement  and  the  Investor  Rights
         Agreement  and to observe  and perform its  covenants  and  obligations
         hereunder and  thereunder  and has obtained all  necessary  approval in
         respect thereof and, in either case, upon execution by the Corporation,
         this   Subscription   Agreement  and  the  Investor  Rights   Agreement
         constitute  legal,   valid  and  binding  contracts  of  the  Purchaser
         enforceable  against the Purchaser in accordance with their  respective
         terms;

(e)      if the Purchaser is an  individual,  the Purchaser has attained the age
         of  majority  and is legally  competent  to execute  this  Subscription
         Agreement  and the Investor  Rights  Agreement  and to take all actions
         required pursuant hereto and thereto;

(f)      if required by applicable securities legislation,  policy or order of a
         securities  regulatory  authority or other  regulatory  authority,  the
         Purchaser  will  execute,   deliver,  file  and  otherwise  assist  the
         Corporation in filing such reports and other  documents with respect to
         the issue of the Purchased Units as may be reasonably required;

(g)      the  Purchaser,  whether  acting as  principal,  trustee  or agent,  is
         neither a U.S.  Person  (as  defined  in Rule  902(o) of  Regulation  S
         promulgated  under the  Securities  Act) nor  purchasing  the Purchased
         Units for the  account  of a U.S.  Person or for  resale in the  United
         States and the Purchaser  confirms  that the  Purchased  Units have not
         been  offered  to the  Purchaser  in the  United  States  and that this
         Subscription  Agreement  has not been  signed by the  Purchaser  in the
         United States;


<PAGE>
                                       10


(h)      the  purchase  of  the  Purchased  Units  by  the  Purchaser  does  not
         contravene  any  of  the  applicable  securities   legislation  in  the
         jurisdiction  in which the  Purchaser  is resident and does not trigger
         (i)  any  obligation  to  prepare  and  file a  prospectus  or  similar
         document,  or any other report with respect to such purchase,  and (ii)
         any  registration or other obligation on the part of the Corporation or
         the Agent;

(i)      the Purchaser has had access to the  Corporation's  public filings with
         the  Securities  and Exchange  Commission and has had an opportunity to
         ask questions of the Corporation's management;

(j)      the  Purchaser is capable of assessing  the  proposed  investment  as a
         result of the  Purchaser's  financial or investment  experience or as a
         result of advice  received  from a  registered  person  other  than the
         Corporation or an affiliate  thereof,  and is able to bear the economic
         loss of its investment.  The Purchaser  recognizes that its purchase of
         Purchased  Units  involves  a high  degree  of  risk in  that:  (i) the
         Corporation has incurred losses since inception; at September 30, 2002,
         the   Corporation   had  an   accumulated   deficit  of   approximately
         $38,217,000; and the Corporation requires substantial funds in addition
         to the proceeds of this  Offering to continue  its plan of  operations;
         (ii) an investment in the  Corporation is highly  speculative  and only
         investors  who can afford the loss of their  entire  investment  should
         consider  investing in the Corporation and the Purchased  Units;  (iii)
         the Purchaser may not be able to liquidate the Purchaser's  investment;
         and (iv)  transferability  of the  securities  comprising the Purchased
         Units is extremely limited.  Furthermore, the proceeds of this Offering
         are projected to last only a limited  period of time. The Purchaser has
         read the Risk Factors  section of the  Corporation's  Annual  Report on
         Form 10-K for the year ended December 31, 2001;

(k)      the  address of the  Purchaser  (or others  for whom the  Purchaser  is
         contracting  hereunder)  furnished by the Purchaser on the  Purchaser's
         signature  page  of  this  Subscription   Agreement  is  such  person's
         principal  residence if such person is an  individual  or its principal
         business address if it is a corporation or other entity; and

(l)      the  Purchaser  (or  others  for  whom  the  Purchaser  is  contracting
         hereunder)  agrees that it will not  disclose the terms of the Offering
         or any  information  it may have acquired from the  Corporation  in the
         course of executing this  Subscription  Agreement which the Corporation
         has identified as material non-public information, except to the extent
         (i) that such terms or other information becomes generally available to
         the public other than by disclosure  in violation of this  Subscription
         Agreement,   (ii)  that  such   information  was  properly  within  the
         Purchaser's  possession  prior to being  furnished by the  Corporation,
         (iii) that such  information  becomes  available to the  Purchaser on a
         non-confidential basis, such as through disclosure by third parties who
         have the right to  disclose  the  information,  and (iv)  compelled  by
         judicial process,  provided that in the event of compulsion by judicial
         process the  Purchaser  will inform the  Corporation  promptly upon its
         receipt of notice of judicial process compelling such disclosure.


<PAGE>
                                       11


9.       Reliance Upon Representations, Warranties and Covenants

         The Purchaser  acknowledges that the representations and warranties and
         covenants  contained in this  Subscription  Agreement are made with the
         intent that they may be relied upon by the Agent and by the Corporation
         to, among other things,  determine the  Purchaser's  eligibility or (if
         applicable) the eligibility of others on whose behalf it is contracting
         hereunder to subscribe for the Purchased Units.  The Purchaser  further
         agrees that by accepting the Purchased  Units,  the Purchaser  shall be
         representing  and  warranting  that the foregoing  representations  and
         warranties  are true as at the  Closing  Time  with the same  force and
         effect as if they had been made by the  Purchaser  at the Closing  Time
         and that they  shall  survive  the  purchase  by the  Purchaser  of the
         Purchased   Units  and  shall   continue   in  full  force  and  effect
         notwithstanding  any  subsequent  disposition  by it of  any  Preferred
         Shares,  Short  Term  Warrants  or Two  Year  Warrants  comprising  the
         Purchased Units.

10.      Agent's Commission, Fees and Expenses

         The  Purchaser  understands  that on the Closing  Date,  the Agent will
         receive from the  Corporation  a  commission  equal to 10% of the gross
         proceeds  raised by the Agent  (payable at the election of the Agent in
         cash or Units (at the issue price  thereof) or a  combination  thereof)
         and broker  warrants (the "Broker  Warrants") to acquire that number of
         Common  Shares equal to 10% of the number of Purchased  Units issued in
         respect of proceeds raised by the Agent, as more particularly described
         and subject to the  exclusions  contained in the Agency  Agreement.  No
         other fee or  commission  is payable by the  Corporation  in connection
         with the sale of the Purchased  Units.  However,  the Corporation  will
         also pay on the Closing Date those  expenses of the Agent in connection
         with the  Offering  as are set out in the Agency  Agreement,  including
         reasonable legal fees and expenses of the Agent's counsel as stipulated
         in the Agency Agreement.

11.      Costs

         The  Purchaser  acknowledges  and  agrees  that all costs and  expenses
         incurred by the Purchaser  (including any fees and disbursements of any
         counsel  retained  by  the  Purchaser)  relating  to  the  sale  of the
         Purchased Units shall be borne by the Purchaser.

12.      Appointment of Agent

         The  Purchaser,  on its own  behalf  and (if  applicable)  on behalf of
         others for whom the Purchaser is contracting hereunder, hereby:

(a)      irrevocably  authorizes  the Agent to negotiate  and settle the form of
         any  agreement to be entered into in connection  with this  transaction
         and to waive on its own behalf and on behalf of the purchasers of Units
         in whole or in part, or extend the time for compliance with, any of the
         closing  conditions in such manner and on such terms and  conditions as
         the  Agent  may  determine,  acting  reasonably,  without  in  any  way
         affecting materially the Purchaser's  obligations or the obligations of
         such others hereunder; and


<PAGE>
                                       12


(b)      acknowledges  and agrees that the Agent and the  Corporation  may vary,
         amend,  alter  or  waive,  in  whole  or in  part,  one or  more of the
         conditions set forth in the Agency Agreement in such manner and on such
         terms and conditions as they may determine, acting reasonably,  without
         affecting  in any  way the  Purchaser's  or  such  others'  obligations
         hereunder.


13.      Governing Law

         This Subscription  Agreement shall be governed by the laws of the State
         of New York without reference to its rules as to conflicts of laws.

14.      Survival

         This  Subscription   Agreement,   including   without   limitation  the
         representations,  warranties  and  covenants  contained  herein,  shall
         survive and  continue in full force and effect and be binding  upon the
         Purchaser  for a period of two years  following  the  completion of the
         Offering of Units by the Corporation, notwithstanding the completion of
         the  subscription  for the Purchased  Units by the  Purchaser  pursuant
         hereto,  and  any  subsequent  disposition  by  the  Purchaser  of  any
         Preferred Shares,  Short Term Warrants or Two Year Warrants  comprising
         the Purchased Units.

15.      Assignment

         This  Subscription  Agreement is not  transferable or assignable by the
         parties hereto.

16.      Counterparts

         This Agreement may be exercised in counterparts, each of which shall be
         deemed to be an original and all of which shall  constitute one and the
         same document.  The Corporation and the Agent shall be entitled to rely
         upon  delivery by  facsimile of an executed  copy of this  Subscription
         Agreement and acceptance by the  Corporation  of such facsimile  copies
         will be  legally  effective  to  create a valid and  binding  agreement
         between the Purchaser and the  Corporation in accordance with the terms
         hereof.


<PAGE>
                                       13


17.      Subscription Particulars

The aggregate number of Units subscribed for is                          .
                                                -------------------------

The  Preferred  Shares,  Short Term  Warrants  and Two Year  Warrants  are to be
registered in the name of:


        ------------------------------------------------------------
                  (if space is insufficient, attach a list)

The certificates  representing the Preferred Shares, Short Term Warrants and Two
Year Warrants are to be delivered to:


        ------------------------------------------------------------

        ------------------------------------------------------------
         at its office at:


        ------------------------------------------------------------

        ------------------------------------------------------------
         Contact Name and Number:



If the  Purchaser  is  signing as agent for a  principal  and not as agent for a
fully managed account, the name and address of the beneficial purchaser is:


        ------------------------------------------------------------

        ------------------------------------------------------------
          (if space is insufficient, attach a list)

DATED at                      this             day of                    , 2003.
         --------------------      -----------        -------------------



                                  ------------------------------------------
                                  Name of Purchaser (please type or print)

                                  By:
                                      ----------------------------------------
                                      (Signature of Authorized Representative)


                                      ----------------------------------------
                                      (Name of Person Signing)

                                      ----------------------------------------
                                      Office or Title


----------------------------------------

----------------------------------------
Address of Purchaser

<PAGE>


                                   ACCEPTANCE



         This  Subscription  Agreement is hereby  accepted and agreed to by Life
Medical Sciences, Inc.


DATED at                      the             day of                    , 2003.
         --------------------     -----------        -------------------



                                        LIFE MEDICAL SCIENCES, INC.


                                        By:
                                           ------------------------------------
                                           Authorized Signing Officer

<PAGE>



                                   Appendix I
                                   ----------




                          CERTIFICATE OF DESIGNATIONS,

                            RIGHTS AND PREFERENCES OF

                      SERIES C CONVERTIBLE PREFERRED STOCK

                                       OF

                           LIFE MEDICAL SCIENCES, INC.

         Life   Medical   Sciences,    Inc.,   a   Delaware   corporation   (the
"Corporation"),  certifies  that pursuant to the authority  contained in Article
FOURTH  of  its  Restated  Certificate  of  Incorporation,  as  amended,  and in
accordance with the provisions of Section 151 of the General  Corporation Law of
the State of Delaware,  its Board of Directors  (the "Board of  Directors")  has
adopted  the  following  resolutions  creating  a  series  of the  Corporation's
Preferred  Stock,  par  value  $.01  per  share,  designated  as  the  Series  C
Convertible Preferred Stock:

         RESOLVED, that a series of the class of authorized Preferred Stock, par
value $.01 per share, of the Corporation be and hereby is created,  and that the
designation and amount thereof and the voting powers,  preferences and relative,
participating,  optional and other special  rights of the shares of such series,
and the qualifications, limitations and restrictions thereof are as follows:

         1.  Title  of  Series.  The  series  of the  Preferred  Stock  shall be
designated  as  the  Series  C  Convertible   Preferred  Stock  (the  "Series  C
Preferred").

         2.  Number of Shares in  Series;  Par Value.  The number of  authorized
shares of Series C Preferred shall be [not more than 605,000] shares,  par value
$.01 per share.

         3. Dividends.  Subject to Section 6(d)(vii) hereof,  the holders of the
Series C Preferred shall be entitled to receive  dividends only when, as, and if
declared by the Board of Directors.

         4. Liquidation Preference.

         (a) Preference. In the event of any liquidation, dissolution or winding
up of the Corporation (a "Liquidation Event"), whether voluntary or involuntary,
the holders of the Series C Preferred  shall be entitled to receive prior and in
preference  to any  distribution  of any of the assets or  surplus  funds of the
Corporation  to the holders of Common  Stock of the  Corporation,  and after any
distribution  of any assets or  surplus  funds of the  Corporation  representing
preferential amounts to the holders of shares of other series of preferred stock
ranking  senior to the Series C Preferred as to payment upon the occurrence of a
Liquidation Event ("Senior Securities"),  and pari passu with shares of Series B
Convertible   Preferred  Stock,


<PAGE>
                                     - 2 -


$.01 par  value per  share  (the  "Series  B  Preferred"),  and other  series of
preferred  stock  ranking on a parity with the Series C Preferred  as to payment
upon the  occurrence  of a  Liquidation  Event  (on the  basis  of the  relative
liquidation  amounts for each such  series),  an amount equal to $1.20 per share
plus a further amount equal to all declared but unpaid  dividends on such shares
for each share of Series C Preferred then held by them. All of the  preferential
amounts to be paid to the holders of the Series C Preferred under this Section 4
shall be paid before the payment or setting apart for payment of any amount for,
or the distribution of any assets or funds of the Corporation to, the holders of
the Common Stock or other series of preferred stock ranking junior to the Series
C Preferred as to payment in connection with such Liquidation Event.

         (b) Insufficient  Assets. If upon such Liquidation Event the assets and
funds of the Corporation are insufficient to provide for the payment of the full
aforesaid preferential amount to the holders of the Series B Preferred, Series C
Preferred  and all other  shares of other  series of  preferred  stock on parity
therewith  as to payment  upon the  occurrence  of a  Liquidation  Event,  then,
subject to distribution or setting aside for distribution of assets or funds for
the payment of preferential amounts in respect of Senior Securities,  the entire
assets and funds of the Corporation  legally available for distribution shall be
distributed  ratably among such holders in  proportion to the full  preferential
amount each such holder is otherwise entitled to receive.

         (c) No Participation. After the payment or the setting apart of payment
of the full  preferential  amounts to the  holders  of the  Series C  Preferred,
holders of Series C Preferred  shall have no claim to the  remaining  assets and
funds of the Corporation.

         (d) Deemed  Liquidation.  For purposes of this Section 4, unless waived
by the holders of not less than two-thirds of the outstanding shares of Series C
Preferred  and other  series of  preferred  stock  ranking on a parity  with the
Series C Preferred as to payment upon the occurrence of a Liquidation Event, (i)
any acquisition of the Corporation by means of merger or other form of corporate
reorganization in which outstanding  shares of the Corporation are exchanged for
securities  or other  consideration  issued,  or  caused  to be  issued,  by the
acquiring  corporation  or its  subsidiary  (other  than a mere  reincorporation
transaction),  unless the Corporation's stockholders of record immediately prior
to such  acquisition (by virtue of securities  issued as  consideration  for the
Corporation's  acquisition)  hold  at  least  50% of  the  voting  power  of the
surviving or acquiring entity or (ii) a sale of all or substantially  all of the
assets of the  Corporation,  shall be treated as a  Liquidation  Event and shall
entitle  the  holders of Series C  Preferred  to receive at the  closing of such
merger,  reorganization or sale, in cash, securities or other properties (valued
as provided in subsection 4(e) below),  amounts as specified in subsections (a),
(b) and (c) above;  provided,  however,  that the  Acquisition  (as such term is
defined in the  Subscription  Agreement of approximate date herewith between the
Corporation  and  the  purchasers  of  Series  C  Preferred  (the  "Subscription
Agreement")) shall not be a Liquidation Event;

         (e)  Noncash  Distributions.  If any  of the  assets  or  funds  of the
Corporation are to be distributed other than in cash under this Section 4 or for
any purpose,  then the Board of Directors  shall promptly  engage an independent
appraiser to determine the value of the assets to be  distributed to the holders
of the  Series  C  Preferred.  The  Corporation  shall,  upon  receipt  of  such
appraiser's  valuation,  give prompt  written notice to each holder of shares of
the Series C

<PAGE>
                                     - 3 -


Preferred  of  the  appraiser's   valuation.   Notwithstanding  the  above,  any
securities to be distributed to the stockholders shall be valued as follows:

            (i) if traded on a  securities  exchange  or  interdealer  quotation
system, the value shall be deemed to be the average of the closing prices of the
securities  on such  exchange  over the 30-day  period ending three (3) business
days prior to the closing;

            (ii) if actively traded over-the-counter,  the value shall be deemed
to be the average of the closing bid prices over the 30-day  period ending three
(3) business days prior to the closing; and

            (iii) if there is no active  public  market,  the value shall be the
fair market value thereof, as determined in good faith by the Board of Directors
of the Corporation.

       5. Voting Rights.

         (a) General.  Except as set forth  herein or as  otherwise  required by
law, a holder of Series C  Preferred  shall be  entitled to that number of votes
per  share  of  Series  C  Preferred  equal  to  the  number  of  shares  of the
Corporation's  common stock (the "Common Stock") into which such share of Series
C Preferred  would be converted if the conversion  took place on the record date
for determination of the stockholders entitled to vote on such matters or, if no
such record date is  established,  on the date such vote is taken or any written
consent of  stockholders  is  solicited  (irrespective  of whether  the Series C
Preferred is then in fact, convertible,  or whether there then exists sufficient
authorized and unissued shares of Common Stock to permit such conversion),  such
votes to be counted  together with all other shares of stock of the  Corporation
having  general  voting power and not counted  separately as a class.  Except as
otherwise  provided  in this  Certificate  of  Incorporation  or as  required by
applicable  law,  the  holders of shares of Series C  Preferred  shall have full
voting rights and powers equal to the voting rights and powers of the holders of
shares of Common  Stock,  and shall be entitled  to notice of any  stockholders'
meeting in accordance with the Bylaws of the Corporation and applicable law, and
shall vote,  together  with the holders of shares of Common Stock (and any other
class or series of stock  entitled to vote together as one class with the Common
Stock),  with  respect to any  question  upon which  holders of shares of Common
Stock have the right to vote, as a single class, including,  but not limited to,
actions amending the Certificate of Incorporation of the Corporation to increase
the number of authorized shares of Common Stock.

       6. Conversion. The Series C Preferred shall be subject to conversion as
follows (the "Conversion Rights"):

         (a) Automatic Conversion.  Upon the occurrence of the first anniversary
of the Original Issue Date (as defined in Section  6(d)(i)(2)  below) each share
of Series C Preferred shall automatically convert into such number of fully paid
and  nonassessable  shares  of  Common  Stock  (the  "Conversion  Rate")  as  is
determined by dividing  $1.20 by the Series C Conversion  Price,  as hereinafter
provided, in effect at the time of the conversion.  The price at which shares of
Common Stock shall be deliverable upon conversion of the Series C Preferred (the
"Series C Conversion  Price") shall  initially be $0.12 per share.  Such initial
Series C  Conversion  Price  shall  be  subject  to  adjustment  as  hereinafter
provided.


<PAGE>
                                     - 4 -


         (b) Mechanics of Conversion. No fractional shares of Common Stock shall
be issued upon  conversion  of Series C Preferred,  provided that whether or not
fractional  shares result from a conversion  shall be determined on the basis of
the total  number of shares  of  Series C  Preferred  the  holder is at the time
converting  into Common Stock and the number of shares of Common Stock  issuable
upon such aggregate  conversion.  In lieu of any fractional  shares to which the
holder would otherwise be entitled,  the  Corporation  shall round the number of
shares of Common  Stock  issuable to such holder to the  nearest  whole  number.
Before  any  holder  of  Series C  Preferred  shall be  entitled  to  receive  a
certificate  representing  shares of Common Stock upon  conversion,  such holder
shall surrender the certificate or certificates  representing the related shares
of Series C Preferred, duly endorsed, at the office of the Corporation or of any
transfer  agent for the Series C Preferred and shall give written  notice to the
Corporation  stating the name or names in which the  certificate or certificates
for shares of Common Stock are to be issued.  The Corporation  shall, as soon as
practicable  thereafter,  issue and  deliver  at such  office to such  holder of
Series C Preferred or its nominee or nominees, a certificate or certificates for
the number of shares of Common  Stock to which such holder  shall be entitled as
aforesaid.  If the conversion is in connection with an underwritten  offering of
securities  pursuant to the Securities Act, the conversion may, at the option of
any holder tendering shares of Series C Preferred for conversion, be conditioned
upon the closing with the  underwriters  of the sale of  securities  pursuant to
such  offering,  in which event the holder  entitled to receive the Common Stock
upon  conversion of the Series C Preferred shall not be deemed to have converted
such Series C Preferred until  immediately  prior to the closing of such sale of
securities.

         (c)  Reservation of Stock  Issuable Upon  Conversion.  The  Corporation
shall use its best efforts at all times to reserve and keep available out of its
authorized  but  unissued  shares of Common  Stock,  solely  for the  purpose of
effecting the conversion of the shares of the Series C Preferred, such number of
its shares of Common  Stock as shall from time to time be  sufficient  to effect
the conversion of all  outstanding  shares of the Series C Preferred;  and if at
any time the number of authorized but unissued  shares of Common Stock shall not
be sufficient to effect the  conversion  of all  then-outstanding  shares of the
Series C Preferred,  in addition to such other remedies as shall be available to
the holders of Series C  Preferred,  the  Corporation  will take such  corporate
action as may, in the  opinion of its  counsel,  be  necessary  to increase  its
authorized but unissued shares of Common Stock to such number of shares as shall
be sufficient for such purposes.

         (d) Adjustments to Conversion Price.

            (i) Special  Definitions.  The following  definitions shall apply to
this Certificate of Designations:

               (1) "Options" shall mean rights, options or warrants to subscribe
for,  purchase or otherwise  acquire  either Common Stock,  Series A Convertible
Preferred  Stock,  $.01 par value of the  Corporation  ("Series  A  Preferred"),
Series B Preferred, Series C Preferred or Convertible Securities.

               (2) "Original  Issue Date" means the first date on which Series C
Preferred was issued.


<PAGE>
                                     - 5 -


               (3)  "Convertible   Securities"   shall  mean  any  evidences  of
indebtedness, shares or other securities directly or indirectly convertible into
or exchangeable for Common Stock.

               (4) "Additional  Shares of Common Stock" shall mean all shares of
Common Stock issued (or, pursuant to subsection 6(d)(iii),  deemed to be issued)
by the Corporation after the Original Issue Date, other than

                 (A) shares of Common Stock issued or issuable  upon  conversion
of the Series A Preferred, Series B Preferred or Series C Preferred;

                 (B) shares of Common  Stock issued or issuable as a dividend or
distribution  on Series A Preferred,  Series B Preferred,  Series C Preferred or
any event for which  adjustment  is made  pursuant  to  subsection  6(d)(vi)  or
6(d)(vii) hereof;

                 (C) shares of Common Stock  issued or issuable  pursuant to the
valid  exercise  of  all  Options  and  Convertible  Securities  (including  the
Warrants,  as defined in the Subscription  Agreement) which are either currently
outstanding or are to be issued upon closing of the Offering, as well as Options
to purchase not more than an additional  aggregate of 1,000,000 shares of common
stock which may from time to time be granted by the Corporation; and

                 (D) shares of Common Stock (or other securities)  issued in the
Acquisition,  or  upon  conversion  or  exercise  of  securities  issued  in the
Acquisition.

            (ii) No Adjustment of Conversion  Price. No adjustment of the Series
C  Conversion  Price  shall be made in an amount  less than one cent per  share,
provided  that any  adjustments  which are not  required to be made by reason of
this  sentence  shall be carried  forward and shall be taken into account in any
subsequent adjustment to the Series C Conversion Price.

            (iii)  Deemed Issue of  Additional  Shares of Common  Stock.  In the
event the  Corporation at any time or from time to time after the Original Issue
Date shall issue any  Options or  Convertible  Securities  or shall fix a record
date for the  determination  of holders of any class of  securities  entitled to
receive any such Options or Convertible  Securities,  then the maximum number of
shares (as set forth in the instrument  relating  thereto  without regard to any
provisions  contained  therein for a subsequent  adjustment  of such number that
would  result in an  adjustment  pursuant  to clause (2) below) of Common  Stock
issuable  upon the  exercise  of such  Options  or,  in the case of  Convertible
Securities and Options therefor,  the conversion or exchange of such Convertible
Securities, shall be deemed to be Additional Shares of Common Stock issued as of
the time of such issue or, in case such a record date shall have been fixed,  as
of the close of business on such record date,  provided that in any such case in
which Additional Shares of Common Stock are deemed to be issued:

               (1) no further  adjustment in the Series C Conversion Price shall
be made upon the subsequent issue of Convertible  Securities or shares of Common
Stock upon the  exercise  of such  Options or  conversion  or  exchange  of such
Convertible  Securities,  or upon the receipt of payment for any such conversion
or exchange;


<PAGE>
                                     - 6 -


               (2) if such  Options or  Convertible  Securities  by their  terms
provide, with the passage of time or otherwise,  for any increase or decrease in
the  consideration  payable to the  Corporation,  or increase or decrease in the
number of shares of Common Stock  issuable,  upon the  exercise,  conversion  or
exchange thereof, the Series C Conversion Price computed upon the original issue
thereof (or upon the occurrence of a record date with respect thereto),  and any
subsequent adjustments based thereon,  shall, upon any such increase or decrease
becoming  effective,  be recomputed to reflect such increase or decrease insofar
as it affects such Options or the rights of  conversion  or exchange  under such
Convertible Securities;

               (3) upon the  expiration  of any such  Options  or any  rights of
conversion or exchange under such  Convertible  Securities  which shall not have
been exercised,  the Series C Conversion  Price computed upon the original issue
thereof (or upon the occurrence of a record date with respect thereto),  and any
subsequent adjustments based thereon, shall, upon such expiration, be recomputed
as if:

                 (A) in the case of Convertible Securities or Options for Common
Stock,  the only Additional  Shares of Common Stock issued were shares of Common
Stock,  if any,  actually  issued  upon  the  exercise  of such  Options  or the
conversion  or exchange of such  Convertible  Securities  and the  consideration
received therefor was the consideration actually received by the Corporation for
the issue of all such Options, whether or not exercised,  plus the consideration
actually received by the Corporation upon such exercise, or for the issue of all
such  Convertible  Securities  whether or not converted or  exchanged,  plus the
additional consideration, if any, actually received by the Corporation upon such
conversion or exchange, and

                 (B) in the case of Options for Convertible Securities, only the
Convertible  Securities,  if any, actually issued upon the exercise thereof were
issued at the time of issue of such Options,  and the consideration  received by
the  Corporation  for the Additional  Shares of Common Stock deemed to have been
then issued was the  consideration  actually received by the Corporation for the
issue of all such  Options,  whether or not  exercised,  plus the  consideration
deemed  to  have  been  received  by  the  Corporation  upon  the  issue  of the
Convertible  Securities  with  respect  to  which  such  Options  were  actually
exercised;

               (4) no  readjustment  pursuant  to clause (2) or (3) above  shall
have the effect of increasing  the Series C Conversion  Price to an amount which
exceeds  the  lower  of (A)  the  Series  C  Conversion  Price  on the  original
adjustment  date, or (B) the Series C Conversion  Price that would have resulted
from any  issuance of  Additional  Shares of Common  Stock  between the original
adjustment date and such readjustment date.

            (iv)  Adjustment of Series C Conversion  Price of Series C Preferred
Upon Issuance of Additional  Shares of Common Stock. In the event that after the
Original  Issue Date the  Corporation  shall issue  Additional  Shares of Common
Stock (including  Additional Shares of Common Stock deemed to be issued pursuant
to subsection  6(d)(iii)) without consideration or for a consideration per share
less than the Series C Conversion Price in effect on the date of and immediately
prior to such issue,  then and in such event,  such  Series C  Conversion  Price
shall be reduced,  concurrently  with such issue, to a price (subject to Section
6(d)(ii),  calculated to the nearest cent) determined by multiplying such Series
C Conversion Price by a

<PAGE>
                                     - 7 -


fraction,  the  numerator of which shall be the number of shares of Common Stock
outstanding  immediately prior to such issue plus the number of shares of Common
Stock  which the  aggregate  consideration  received  or deemed  received by the
Corporation for the total number of Additional  Shares of Common Stock so issued
or deemed  issued  would  purchase at such Series C  Conversion  Price;  and the
denominator  of which shall be the number of shares of Common Stock  outstanding
immediately  prior to such issue plus the  number of such  Additional  Shares of
Common Stock so issued or deemed  issued;  and provided  further  that,  for the
purposes of this  subsection  (iv),  all shares of Common  Stock  issuable  upon
conversion  of  outstanding  Series  C  Preferred  and  outstanding  Convertible
Securities or exercise of outstanding  Options shall be deemed to be outstanding
(whether or not conversion or exercise is then permitted), and immediately after
any Additional  Shares of Common Stock are deemed issued  pursuant to subsection
6(d)(iii),  such  Additional  Shares  of  Common  Stock  shall be  deemed  to be
outstanding.

            (v)  Determination  of  Consideration.  For purposes of this Section
6(d),  the  consideration  received  by the  Corporation  for the  issue  of any
Additional Shares of Common Stock shall be computed as follows:

               (1) Cash and  Property:  Except as  provided in clause (2) below,
such consideration shall:

                 (A)  insofar  as it  consists  of  cash,  be  computed  as  the
aggregate  amount of cash  received by the  Corporation,  before  deducting  any
discounts,  commissions  or other  expenses  allowed,  paid or  incurred  by the
Corporation  for any  underwriting  or otherwise in connection with the issuance
and sale thereof,  and excluding amounts paid or payable for accrued interest or
accrued dividends;

                 (B)  insofar as it consists  of  property  other than cash,  be
computed  at the  fair  market  value  thereof  at the  time of such  issue,  as
determined in good faith by the Board of Directors;  provided,  however, that no
value shall be attributed to any services performed by any employee,  officer or
director of the Corporation; and


                 (C) in the event  Additional  Shares of Common Stock are issued
together with other shares or securities or other assets of the  Corporation for
consideration  which covers both,  be the  proportion of such  consideration  so
received with respect to such  Additional  Shares of Common  Stock,  computed as
provided in clauses (A) and (B) above,  as determined in good faith by the Board
of Directors.

               (2) Options and Convertible  Securities.  The  consideration  per
share received by the Corporation  for Additional  Shares of Common Stock deemed
to have been  issued  pursuant  to Section  6(d)(iii),  relating  to Options and
Convertible Securities, shall initially be determined by dividing:

                 (A) the total  amount,  if any,  received or  receivable by the
Corporation  as  consideration  for the  issue of such  Options  or  Convertible
Securities,  plus the minimum  aggregate amount of additional  consideration (as
set forth in the instruments  relating thereto,  without regard to any provision
contained therein for a subsequent adjustment of such

<PAGE>
                                     - 8 -


consideration)  payable to the Corporation  upon the exercise of such Options or
the  conversion or exchange of such  Convertible  Securities,  or in the case of
Options for Convertible Securities, the exercise of such Options for Convertible
Securities and the conversion or exchange of such Convertible Securities by

                 (B) the maximum  number of shares of Common Stock (as set forth
in the instruments  relating thereto,  without regard to any provision contained
therein for a subsequent  adjustment of such number)  issuable upon the exercise
of such Options or the conversion or exchange of such Convertible Securities.

            (vi) Adjustments for Stock Dividends, Subdivisions,  Combinations or
Consolidations  of Common Stock. In the event the  outstanding  shares of Common
Stock shall be subdivided (by stock dividend, stock split, or otherwise), into a
greater number of shares of Common Stock,  the Series C Conversion Price then in
effect  shall,  concurrently  with the  effectiveness  of such  subdivision,  be
proportionately  decreased.  In the event the outstanding shares of Common Stock
shall be combined or  consolidated,  by  reclassification  or otherwise,  into a
lesser number of shares of Common Stock,  the Series C Conversion  Price then in
effect  shall,  concurrently  with  the  effectiveness  of such  combination  or
consolidation, be proportionately increased.

            (vii)  Adjustments  for  Other  Distributions.   In  the  event  the
Corporation  at any time or from time to time makes,  or fixes a record date for
the  determination  of  holders  of  Common  Stock  entitled  to  receive,   any
distribution  (other  than  a  distribution   described  in  Section  6(d)(vi)),
including a  distribution  in cash,  the holders of Series C Preferred  shall be
entitled  to a  proportionate  share of any such  distribution  as though  their
shares of Series C Preferred were converted into Common Stock on the record date
fixed for the  determination  of holders of shares of Common  Stock  entitled to
receive such distribution.

            (viii) Adjustments for Reclassification,  Exchange and Substitution.
If the Common Stock issuable upon  conversion of the Series C Preferred shall be
changed  into the same or a  different  number of  shares of any other  class or
classes of stock or other securities or property of the Corporation,  whether by
capital reorganization,  reclassification or otherwise (other than a subdivision
or combination of shares provided for in Section 6(d)(vi), or a transaction that
would  constitute a deemed  liquidation of the Corporation  under Section 4(d)),
then and in each  such  event  provision  shall be made so that  each  holder of
shares of Series C Preferred  shall  thereafter  be  entitled  to receive,  upon
conversion  of the  Series C  Preferred,  the number of shares of stock or other
securities or property of the  Corporation  or otherwise,  receivable  upon such
reorganization,  reclassification or other transaction by a holder of the number
of shares of Common  Stock into which such  shares of Series C  Preferred  would
have been  converted  if  converted  immediately  prior to such  reorganization,
reclassification or other transaction.  In any such case, appropriate adjustment
shall  be made in the  application  of the  provisions  of this  Section  6 with
respect to the rights of the holders of shares of Series C  Preferred  after the
reorganization,  reclassification  or  other  transaction  to the end  that  the
provisions of this Section 6 (including adjustments of the Conversion Price then
in effect and the number of shares  purchasable  upon conversion of the Series C
Preferred) shall be applicable  after that event as nearly  equivalent as may be
practicable.


<PAGE>
                                     - 9 -


            (ix) No Impairment. Without the prior written consent of the holders
of a majority of the Series C Preferred,  the Corporation will not, by amendment
of its Certificate of Incorporation or through any  reorganization,  transfer of
assets, consolidation,  merger, dissolution,  issue or sale of securities or any
other voluntary action,  avoid or seek to avoid the observance or performance of
any of the terms to be observed or performed  hereunder by the  Corporation  but
will at all times in good faith assist in the carrying out of all the provisions
of  Section  6 and in the  taking  of all such  action  as may be  necessary  or
appropriate  in order to protect  the  conversion  rights of the  holders of the
Series C Preferred against impairment.

            (x)  Certificate  as to  Adjustments.  Upon the  occurrence  of each
adjustment or readjustment of the Series C Conversion  Price pursuant to Section
6, the  Corporation  at its expense shall  promptly  compute such  adjustment or
readjustment  in accordance  with the terms hereof and furnish to each holder of
Series C Preferred a certificate  setting forth such  adjustment or readjustment
and showing in detail the facts upon which such  adjustment or  readjustment  is
based. The Corporation shall, upon the written request at any time of any holder
of Series C  Preferred,  furnish or cause to be  furnished to such holder a like
certificate setting forth (A) such adjustments and readjustments, (B) the Series
C Conversion Price at the time in effect, and (C) the number of shares of Common
Stock and the  amount,  if any,  of other  property  which at the time  would be
received upon the conversion of Series C Preferred.

         3.  Redemption.  The  Series  C  Preferred  are not  redeemable  by the
Corporation,  nor may the holders of Series C Preferred  require the Corporation
to redeem such shares.

         4.  Notices of Record  Date.  In the event that the  Corporation  shall
propose at any time:

            (a) to declare any dividend or  distribution  upon its Common Stock,
whether in cash, property,  stock or other securities,  whether or not a regular
cash dividend and whether or not out of earnings or earned surplus;

            (b) to offer for  subscription  pro rata to the holders of any class
or series of its stock any additional  shares of stock of any class or series or
other rights;

            (c) to effect any reclassification or recapitalization of its Common
Stock outstanding involving a change in the Common Stock; or

            (d) to merge or consolidate with or into any other  corporation,  or
sell, lease or convey all or substantially  all its property or business,  or to
liquidate, dissolve or wind up, then, in connection with each such event, unless
waived in writing by the  holders of a  majority  of the  outstanding  shares of
Series C Preferred,  the  Corporation  shall send to the holders of the Series C
Preferred:

               (i) at least 20 days' prior written notice of the date on which a
record shall be taken for such dividend,  distribution  or  subscription  rights
(and  specifying the date on which the holders of Common Stock shall be entitled
thereto) or for determining rights to vote in respect of the matters referred to
in (c) and (d) above; and


<PAGE>
                                     - 10 -


               (ii) in the case of the matters referred to in (c) and (d) above,
at least 20 days'  prior  written  notice of the date when the same  shall  take
place (and  specifying  the date on which the  holders of Common  Stock shall be
entitled  to  exchange  their  Common  Stock for  securities  or other  property
deliverable  upon the  occurrence of such event)  provided,  that no such notice
shall  be  required  in  connection  with the  Acquisition  (as  defined  in the
Subscription Agreement); provided, further, that notice shall be provided in the
same manner as any notice  actually  provided to the holders of Common  Stock in
connection with the Acquisition.

            Each such written  notice shall be delivered  personally or given by
first  class mail,  postage  prepaid,  addressed  to the holders of the Series C
Preferred  at the  address  for each  such  holder as shown on the books of this
Corporation.

         5. Protective  Provisions.  In addition to any other rights provided by
law, the Corporation  shall not, without first obtaining the affirmative vote or
written consent of the holders of at least a majority of the outstanding  shares
of Series C Preferred,  voting  together as a single class,  amend or repeal any
provision of the Corporation's  Certificate of Incorporation or Bylaws in such a
manner as to adversely affect the rights of the holders of Series C Preferred.

         IN WITNESS WHEREOF,  said Corporation has caused this Certificate to be
signed by Robert Hickey, the Chairman,  President and Chief Executive Officer of
the  Corporation.  The  signature  below shall  constitute  the  affirmation  or
acknowledgement,  under  penalties of perjury,  that the facts herein stated are
true.


Dated:                     , 2003 LIFE MEDICAL SCIENCES, INC.
      ---------------------


                                  --------------------------------------------
                                  By: Robert Hickey
                                      Chairman, President and Chief Executive
                                      Officer

<PAGE>


                                  Appendix III


                                                 Warrant No:
                                                             --------------

THIS WARRANT AND THE SHARES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE NOT BEEN
REGISTERED  UNDER THE UNITED  STATES  SECURITIES  ACT OF 1933,  AS AMENDED  (THE
"ACT"),  STATE SECURITIES LAWS IN THE UNITED STATES OR THE SECURITIES LAW OF ANY
OTHER  COUNTRY  AND MAY  NOT BE  SOLD,  TRANSFERRED,  PLEDGED,  HYPOTHECATED  OR
OTHERWISE  DISPOSED  OF UNLESS (A) SUCH  TRANSACTION  OCCURS  OUTSIDE THE UNITED
STATES IN A  TRANSACTION  MEETING THE  REQUIREMENTS  OF RULE 904 OF REGULATION S
UNDER  THE  ACT (OR  SUCH  SUCCESSOR  RULE OR  REGULATION  THEN IN  EFFECT),  IF
APPLICABLE,  AND IN COMPLIANCE WITH APPLICABLE  STATE  SECURITIES LAWS, (B) THIS
WARRANT AND THE SHARES  ISSUABLE  UPON  EXERCISE OF THIS WARRANT ARE  REGISTERED
UNDER THE ACT OR (C) SUCH  TRANSACTION  CONSTITUTES A TRANSACTION THAT OTHERWISE
DOES NOT REQUIRE  REGISTRATION  UNDER THE ACT OR ANY APPLICABLE STATE SECURITIES
LAWS, AND THE HOLDER PRIOR TO SUCH  TRANSACTION HAS FURNISHED TO THE CORPORATION
AN  OPINION  OF  COUNSEL  OF  RECOGNIZED  STANDING  TO  THAT  EFFECT  REASONABLY
SATISFACTORY TO THE CORPORATION,  SUBJECT IN EACH CASE TO ANY APPLICABLE  UNITED
STATES FEDERAL OR STATE OR FOREIGN SECURITIES LAW RESTRICTIONS APPLICABLE TO THE
RESALE OF THIS WARRANT AND THE SHARES ISSUABLE UPON EXERCISE OF THIS WARRANT.

THIS  WARRANT  MAY NOT BE  EXERCISED  BY OR ON  BEHALF OF A U.S.  PERSON  AND NO
SECURITIES  MAY BE DELIVERED IN THE UNITED  STATES UPON EXERCISE OF THIS WARRANT
UNLESS  THE  EXERCISE  IS  REGISTERED  UNDER THE ACT OR AN  EXEMPTION  FROM SUCH
REGISTRATION IS AVAILABLE.  ANY PERSON  EXERCISING THIS WARRANT WILL BE REQUIRED
TO PROVIDE (1) WRITTEN  CERTIFICATION  THAT IT IS NOT A U.S.  PERSON  WITHIN THE
MEANING OF REGULATION S OF THE ACT AND THAT THIS WARRANT IS NOT BEING  EXERCISED
WITHIN THE UNITED  STATES OR ON BEHALF OF, OR FOR THE  ACCOUNT OR BENEFIT  OF, A
U.S.  PERSON OR A PERSON IN THE  UNITED  STATES,  OR (2) A  WRITTEN  OPINION  OF
COUNSEL OF  RECOGNIZED  STANDING TO THE EFFECT THAT THIS  WARRANT AND THE SHARES
ISSUABLE  UPON EXERCISE OF THIS WARRANT HAVE BEEN  REGISTERED  UNDER THE ACT AND
UNDER ANY APPLICABLE U.S. STATE SECURITIES LAWS OR ARE EXEMPT FROM  REGISTRATION
THEREUNDER. HEDGING TRANSACTIONS INVOLVING THESE SECURITIES MAY NOT BE CONDUCTED
UNLESS IN COMPLIANCE WITH THE SECURITIES ACT.



                        WARRANT TO PURCHASE COMMON STOCK

                        _________ Shares of Common Stock


                           LIFE MEDICAL SCIENCES, INC.


         THIS CERTIFIES THAT, for good and valuable  consideration,  the receipt
of which is  hereby  acknowledged,  (the  "Warrantholder")  with an  address  at
____________________________________,  is the registered  holder of this Warrant
and is entitled to subscribe for and purchase from Life Medical Sciences,  Inc.,
a Delaware corporation (herein called the "Corporation"),  at any time after the
date hereof and before the later of 5:00 p.m.  (Eastern Standard Time) on , 2005
referred  to  hereafter  as  the  "Time  of  Expiry"),  up  to  fully  paid  and
non-assessable shares of Common Stock, par value

<PAGE>
                                       2


$.001 per share (the "Shares"), of the Corporation at an exercise price of $0.12
per Share,  subject to adjustment as provided below  (collectively the "Exercise
Price").

         This  Warrant is  subject  to the  provisions  of the  Investor  Rights
Agreement dated , 2003 among the Corporation and certain Warrantholders, as well
as to a subscription  agreement entered into with the original  warrantholder in
connection with the offering  referred to in Section 1 below (the  "Subscription
Agreement"), and the following provisions, terms and conditions:

1.       Designation

         This  warrant  certificate  is one of a series of warrant  certificates
(collectively, the "Warrants") issued pursuant to an offering by the Corporation
of up to  605,000  units,  each  unit  consisting  of  one  share  of  Series  C
Convertible  Preferred Stock, $.01 par value per share, of the Corporation,  one
Warrant to purchase  ten (10)  Shares and one short term  Warrant  scheduled  to
expire June 30, 2003 to purchase  ten (10) Shares at an exercise  price of $0.12
per Share.

2.       Exercise of Warrants

         (a)      Election to  Purchase.  This  Warrant may be  exercised by the
                  Warrantholder  prior to the Time of Expiry in whole or in part
                  and in accordance with the provisions hereof by delivery of an
                  Election to Purchase in a form  substantially the same as that
                  attached hereto as Annex "A", properly completed and executed,
                  together  with this Warrant and payment of the Exercise  Price
                  multiplied  by the number of Shares  specified in the Election
                  to Purchase to the Corporation at P.O. Box 219, Little Silver,
                  New Jersey 07739, U.S.A., Attention: Robert P. Hickey, or such
                  other   address  as  may  be   notified   in  writing  by  the
                  Corporation.   Payment  shall  be  made  in  U.S.  dollars  by
                  certified or bank cashier's cheque payable to the order of the
                  Corporation.

         (b)      Exercise.  The Corporation shall,  promptly following the date
                  it receives a duly executed Election to Purchase, this Warrant
                  and  payment  of the  Exercise  Price for the number of Shares
                  specified in the Election to Purchase (the  "Exercise  Date"),
                  issue or cause to be issued that number of Shares specified in
                  the  Election  to  Purchase  as fully paid and  non-assessable
                  Shares.   Such  duly  executed   Election  to  Purchase  shall
                  constitute   the   Warrantholder's   acknowledgement   of  and
                  undertaking  to comply to the reasonable  satisfaction  of the
                  Corporation and its counsel,  with all applicable laws, rules,
                  regulations  and policies of every stock  exchange  upon which
                  the Shares of the  Corporation may from time to time be listed
                  or traded, and any other applicable governmental or regulatory
                  authorities.

         (c)      Share  Certificates.  As  promptly  as  practicable  after the
                  Exercise  Date (and in any event not later  than 10 days after
                  the  Exercise  Date),  the  Corporation   shall  send  to  the
                  Warrantholder,  registered  in  such  name  or  names  as  the
                  Warrantholder  may  direct  or if no such  direction  has been
                  given,  in the name of the  Warrantholder,  a  certificate  or
                  certificates  for  the  number  of  Shares  specified  in  the
                  Election to Purchase.  To the extent  permitted  by law,  such
                  exercise shall be deemed to have been effected as of the close
                  of business on


<PAGE>
                                       3


                  the  Exercise  Date,  and  at  such  time  the  rights  of the
                  Warrantholder with respect to the number of the Warrants which
                  have been  exercised  as such shall  cease,  and the person or
                  persons in whose name or names any certificate or certificates
                  for Shares shall then be issuable upon such exercise  shall be
                  deemed to have  become  the holder or holders of record of the
                  Shares represented thereby.

         (d)      Fractional  Shares.  No fractional Shares shall be issued upon
                  exercise of this Warrant and no payments or  adjustment  shall
                  be made upon any exercise on account of any cash  dividends on
                  the  Shares  issued  upon  such  exercise.  If any  fractional
                  interest in a Share would,  except for the  provisions  of the
                  first sentence of this  subsection  2(d), be deliverable  upon
                  the  exercise  of this  Warrant,  the  number  of Shares to be
                  issued to the Warrantholder  upon the exercise of this Warrant
                  shall be rounded to the nearest whole number.

         (e)      Subscription for Less than Entitlement.  The Warrantholder may
                  from  time to time  subscribe  for and  purchase  a number  of
                  Shares  less than the  aggregate  number  which the  holder is
                  entitled to purchase pursuant to this Warrant. In the event of
                  a  purchase  of a number  of Shares  less  than the  aggregate
                  number which may be purchased  pursuant to this  Warrant,  the
                  holder thereof shall be entitled to receive, without charge, a
                  new  Warrant  certificate  in  respect  of the  balance of the
                  Shares subject to this Warrant which were not purchased by the
                  Warrantholder.

         (f)      Corporate Changes.  If the Corporation shall be a party to any
                  reorganization,   merger,   dissolution  or  sale  of  all  or
                  substantially  all of its assets (the "Event"),  (other than a
                  reorganization  or  merger  in which  the  Corporation  is the
                  surviving  entity) then the securities  purchasable  hereunder
                  shall be the  securities  (the "Event  Securities")  which the
                  Warrantholder  would have received or been entitled to receive
                  in such Event if such  Warrantholder  had fully exercised this
                  Warrant  prior to the  record  date (or if there was no record
                  date, then prior to the effective date) of such Event, and the
                  Exercise  Price shall be adjusted to be the amount  determined
                  by multiplying the Exercise Price in effect  immediately prior
                  to the Event by the number of Shares as to which this  Warrant
                  was unexercised  immediately  prior to the Event, and dividing
                  the  product  thereof  by  the  number  of  Event  Securities;
                  provided  however,  that the Event  shall not be carried  into
                  effect  unless all  necessary  steps have been taken to ensure
                  that any  surviving  entity  is  subject  to the terms of this
                  Warrant as adjusted.

                  Notwithstanding  anything  to the  contrary  contained  in the
                  immediately preceding paragraph, in the event of a transaction
                  contemplated  by such  paragraph  in which  the  surviving  or
                  purchasing  corporation demands that all outstanding  Warrants
                  be extinguished  prior to the closing date of the contemplated
                  transaction,  the  Corporation  shall give prior  notice  (the
                  "Merger  Notice") thereof to the Holders advising them of such
                  transaction. The Holders shall have ten days after the date of
                  the Merger Notice to elect to (i) exercise the Warrants in the
                  manner provided herein,  or (ii) receive from the surviving or
                  purchasing corporation the same consideration  receivable by a
                  holder of the number of shares of Common  Stock for which this
                  Warrant might have been

<PAGE>
                                       4


                  exercised  immediately  prior to such  consolidation,  merger,
                  sale, or purchase reduced by such amount of the  consideration
                  as  has a  market  value  equal  to  the  Exercise  Price,  as
                  determined  by the board of  directors of the  Corporation  in
                  accordance with the terms of the Warrants. If any Holder fails
                  to timely notify the  Corporation of its election,  the Holder
                  shall be deemed for all  purposes  to have  elected the option
                  set forth in (ii) above.  Any amounts  receivable  by a Holder
                  who has  elected  the option set forth in (ii) above  shall be
                  payable at the same time as amounts payable to stockholders in
                  connection with any such transaction.

         (g)      Subdivision or Consolidation of Shares

                  (i)      In the  event the  Corporation  shall  subdivide  its
                           outstanding  Shares into a greater  number of Shares,
                           the  Exercise  Price in effect  immediately  prior to
                           such subdivision  shall be  proportionately  reduced,
                           and conversely,  in the event the outstanding  Shares
                           of  the  Corporation  shall  be  consolidated  into a
                           smaller  number  of  Shares,  the  Exercise  Price in
                           effect immediately prior to such consolidation  shall
                           be proportionately increased.

                  (ii)     Upon  each   adjustment  of  the  Exercise  Price  as
                           provided herein,  the Warrantholder  shall thereafter
                           be  entitled  to  acquire,   at  the  Exercise  Price
                           resulting from such adjustment,  the number of Shares
                           (calculated to the nearest tenth of a Share) obtained
                           by   multiplying   the   Exercise   Price  in  effect
                           immediately prior to such adjustment by the number of
                           Shares  which may be acquired  hereunder  immediately
                           prior to such  adjustment  and  dividing  the product
                           thereof by the  Exercise  Price  resulting  from such
                           adjustment.

         (h)      Change  or  Reclassification  of  Shares.  In  the  event  the
                  Corporation shall change or reclassify its outstanding  Shares
                  into a different  class of  securities,  this Warrant shall be
                  adjusted as follows so as to apply to the  successor  class of
                  securities:

                  (i)      the  number  and  kind  of  the  successor  class  of
                           securities which the Warrantholder  shall be entitled
                           to acquire shall be the aggregate  number and kind of
                           securities  which, if this Warrant had been exercised
                           immediately prior to such change or reclassification,
                           the Warrantholder would have been entitled to receive
                           by reason of such change or reclassification; and

                  (ii)     the Exercise Price shall be determined by multiplying
                           the Exercise Price in effect immediately prior to the
                           change or reclassification by the number of Shares as
                           to which this  Warrant  was  unexercised  immediately
                           prior to the change or reclassification, and dividing
                           the  product  thereof by the number of the  successor
                           class of securities  determined in paragraph  2(h)(i)
                           hereof.

         (i)      Distribution  to  Shareholders.  If and  whenever  at any time
                  prior to the Time of Expiry the Corporation shall fix a record
                  date or if a date is  otherwise


<PAGE>
                                       5


                  established  (any such date being  hereinafter  referred to in
                  this subsection 2(i) as the "record date") for the issuance of
                  rights,  options or warrants to all or  substantially  all the
                  holders of the outstanding Shares of the Corporation entitling
                  them,  for a period  expiring not more than 45 days after such
                  record  date,  to  subscribe  for or  purchase  Shares  of the
                  Corporation or securities convertible into or exchangeable for
                  Shares at a price  per share or, as the case may be,  having a
                  conversion  or  exchange  price per share less than 95% of the
                  Fair  Market  Value (as  hereinafter  defined)  on such record
                  date, the Exercise Price shall be adjusted  immediately  after
                  such record  date so that it shall equal the price  determined
                  by  multiplying  the  Exercise  Price in effect on such record
                  date by a fraction,  of which the numerator shall be the total
                  number of Shares outstanding on such record date plus a number
                  equal to the number arrived at by dividing the aggregate price
                  of  the  total  number  of  additional   Shares   offered  for
                  subscription or purchase or, as the case may be, the aggregate
                  conversion   or   exchange   price  of  the   convertible   or
                  exchangeable  securities  so offered by the Fair Market Value,
                  and of which  the  denominator  shall be the  total  number of
                  Shares  outstanding  on such record date plus the total number
                  of additional Shares so offered (or into which the convertible
                  or  exchangeable  securities  so offered  are  convertible  or
                  exchangeable);  Shares owned by or held for the account of the
                  Corporation  or any  subsidiary  of the  Corporation  shall be
                  deemed  not to be  outstanding  for the  purpose  of any  such
                  computation;   such  adjustment  shall  be  made  successively
                  whenever  such a record date is fixed;  to the extent that any
                  rights or  warrants  are not so  issued or any such  rights or
                  warrants are not exercised  prior to the  expiration  thereof,
                  the Exercise  Price shall then be  readjusted  to the Exercise
                  Price  which  would then be in effect if such  record date had
                  not been fixed or to the Exercise Price which would then be in
                  effect  based  upon the  number  of Shares  or  conversion  or
                  exchange  rights  contained  in  convertible  or  exchangeable
                  securities actually issued upon the exercise of such rights or
                  warrants, as the case may be.

         (j)      Additional  Subscriptions.  If at  any  time  the  Corporation
                  grants  to its  shareholders  the right to  subscribe  for and
                  purchase pro rata  additional  securities  of the  Corporation
                  (other than securities  described in subsection (2)(i) hereof)
                  or of any  other  corporation  or  entity,  there  shall be no
                  adjustments  made to the number of Shares or other  securities
                  subject  to  this  Warrant  or  to  the   Exercise   Price  in
                  consequence thereof and this Warrant shall remain unaffected.

         (k)      Carry Over of Adjustments. No adjustment of the Exercise Price
                  shall be made if the amount of such  adjustment  shall be less
                  than 1% of the Exercise Price in effect  immediately  prior to
                  the event  giving rise to the  adjustment,  provided  however,
                  that in such  case any  adjustment  that  would  otherwise  be
                  required then to be made shall be carried forward and shall be
                  made at the time of and  together  with  the  next  subsequent
                  adjustment  which,  together  with any  adjustment  so carried
                  forward,  shall amount to at least 1% of the Exercise Price in
                  effect prior to such adjustment.

         (l)      Notice of  Adjustment.  Upon any  adjustment  of the number of
                  Shares and upon any adjustment of the Exercise Price, then and
                  in each such case the  Corporation  shall give written  notice
                  thereof to the  Warrantholder,  which

<PAGE>
                                       6


                  notice shall state the Exercise Price and the number of Shares
                  or other  securities  into which each  Warrant is  exercisable
                  resulting  from  such  adjustment,  and  shall  set  forth  in
                  reasonable detail the method of calculation and the facts upon
                  which  such  calculation  is  based.  Upon  the  request  of a
                  Warrantholder  there  shall  be  transmitted  promptly  to all
                  Warrantholders a statement prepared by the firm of independent
                  certified public  accountants  retained to audit the financial
                  statements  of the  Corporation  to the effect  that such firm
                  concurs in the Corporation's calculation of the change.

         (m)      Other Notices. If at any time:

                  (i)      the  Corporation  shall declare any dividend upon its
                           Shares;

                  (ii)     the Corporation shall offer for subscription pro rata
                           to the holders of its Shares any additional shares of
                           any class or other rights;

                  (iii)    there   shall  be  any  capital   reorganization   or
                           reclassification   of  the   capital   stock  of  the
                           Corporation, or consolidation, amalgamation or merger
                           of  the   Corporation   with,   or  sale  of  all  or
                           substantially   all  of  its   assets   to,   another
                           corporation (other than the Acquisition as defined in
                           the Subscription Agreement); or

                  (iv)     there   shall   be   a   voluntary   or   involuntary
                           dissolution,   liquidation   or   winding-up  of  the
                           Corporation,

                  then, in any one or more of such cases, the Corporation  shall
                  give to the  Warrantholder (A) at least 20 days' prior written
                  notice  of the date on which a record  shall be taken for such
                  dividend,   distribution   or   subscription   rights  or  for
                  determining   rights   to  vote  in   respect   of  any   such
                  reorganization,   reclassification,   consolidation,   merger,
                  amalgamation, sale, dissolution, liquidation or winding-up and
                  (B) in the case of any such reorganization,  reclassification,
                  consolidation,   merger,  sale,  dissolution,  liquidation  or
                  winding-up, at least 20 days' prior written notice of the date
                  when the same shall take place. Such notice in accordance with
                  the foregoing clause shall also specify (A) in the case of any
                  such dividend,  distribution or subscription  rights, the date
                  on which the holders of Shares shall be entitled thereto,  and
                  (B) in the case of any transaction  described in the foregoing
                  clauses  (iii) and  (iv),  the date on which  the  holders  of
                  Shares  are  to be  entitled  to  exchange  their  Shares  for
                  securities   or   other   property   deliverable   upon   such
                  reorganization,   reclassification,   consolidation,   merger,
                  amalgamation, sale, dissolution, liquidation or winding-up, as
                  the case may be.


         (n)      Shares to be Reserved.  The Corporation will at all times keep
                  available and reserve out of its authorized Shares, solely for
                  the purpose of issue upon the exercise of this  Warrant,  such
                  number of Shares as shall then be issuable  upon the  exercise
                  of these Warrants.  The Corporation  covenants and agrees that
                  all Shares which shall be so issuable will, upon issuance,  be
                  duly authorized and issued, fully paid and non-assessable. The
                  Corporation  will take all such action as may be  necessary to
                  assure that all such Shares may be so issued

<PAGE>
                                       7


                  without violation of any applicable  requirements of any stock
                  exchange  upon  which  the  Shares of the  Corporation  may be
                  listed or in respect of which the  Shares  are  qualified  for
                  unlisted  trading  privileges.  The Corporation  will take all
                  such  action  as is within  its power to assure  that all such
                  Shares may be so issued  without  violation of any  applicable
                  law.

         (o)      Issue Tax.  The issuance of  certificates  for Shares upon the
                  exercise of these Warrants shall be made without charge to the
                  Warrantholder   for  any  issuance  tax  in  respect  thereto,
                  provided that the Corporation shall not be required to pay any
                  tax which may be payable in respect of any  transfer  involved
                  in the  issuance  and  delivery of any  certificate  in a name
                  other than that of the Warrantholder.

         (p)      Fair  Market  Value.  For  the  purposes  of  any  computation
                  hereunder, unless otherwise specified, the "Fair Market Value"
                  at any date  shall be: (i) if the Shares are listed on a stock
                  exchange  or  quoted  on  a  similar  securities  market,  the
                  weighted  average  sale price per share for the Shares for any
                  20  consecutive  trading days  (selected  by the  Corporation)
                  commencing  not more than 25 trading  days before such date on
                  the principal stock exchange or similar securities market upon
                  which the Shares are listed or quoted,  as the case may be; or
                  (ii) if the  computation  is being made in  connection  with a
                  public offering of Shares,  the gross  distribution  price per
                  Share under the  offering;  or (iii) in all other  cases,  the
                  Fair  Market  Value  shall  be  determined  by  the  Board  of
                  Directors  in  good  faith,  which   determination   shall  be
                  conclusive.   The   weighted   average  sale  price  shall  be
                  determined by dividing the aggregate  sale price of all Shares
                  sold  on the  said  exchange  or  market  during  the  said 20
                  consecutive  trading  days by the  total  number  of Shares so
                  sold.

         (q)      The Shares  issued  upon  exercise  of the  Warrants  shall be
                  subject  to a stop  transfer  order  and  the  certificate  or
                  certificates  evidencing  such Shares shall bear the following
                  legend:

                  THE SECURITIES  REPRESENTED BY THIS  CERTIFICATE HAVE NOT BEEN
                  REGISTERED UNDER THE UNITED STATES  SECURITIES ACT OF 1933, AS
                  AMENDED  (THE  "ACT"),  STATE  SECURITIES  LAWS IN THE  UNITED
                  STATES OR THE SECURITIES  LAWS OF ANY OTHER  COUNTRY,  AND MAY
                  NOT BE SOLD, TRANSFERRED,  PLEDGED,  HYPOTHECATED OR OTHERWISE
                  DISPOSED  OF UNLESS (A) SUCH  TRANSACTION  OCCURS  OUTSIDE THE
                  UNITED STATES IN A  TRANSACTION  MEETING THE  REQUIREMENTS  OF
                  RULE 904 OF REGULATION S UNDER THE ACT (OR SUCH SUCCESSOR RULE
                  OR  REGULATION  THEN  IN  EFFECT),   IF  APPLICABLE,   AND  IN
                  COMPLIANCE  WITH  APPLICABLE  STATE  SECURITIES  LAWS, (B) THE
                  SECURITIES  REPRESENTED  BY THIS  CERTIFICATE  ARE  REGISTERED
                  UNDER  THE  ACT  OR  (C)  SUCH   TRANSACTION   CONSTITUTES   A
                  TRANSACTION THAT OTHERWISE DOES NOT REQUIRE REGISTRATION UNDER
                  THE  ACT OR ANY  APPLICABLE  STATE  SECURITIES  LAWS,  AND THE
                  HOLDER  PRIOR  TO  SUCH   TRANSACTION  HAS  FURNISHED  TO  THE
                  CORPORATION  AN OPINION OF COUNSEL OF  RECOGNIZED  STANDING TO
                  THAT  EFFECT  REASONABLY   SATISFACTORY  TO  THE  CORPORATION,
                  SUBJECT IN EACH CASE TO ANY APPLICABLE  UNITED STATES FEDERAL,
                  STATE OR FOREIGN SECURITIES LAW RESTRICTIONS APPLICABLE TO THE
                  RESALE OF THIS WARRANT AND THE SHARES  ISSUABLE  UPON EXERCISE
                  OF THIS WARRANT.


<PAGE>
                                       8


3.       Transfer

         Subject to compliance by the  Warrantholder  with any applicable resale
restrictions,  the Corporation  acknowledges and agrees that this Warrant may be
assigned or transferred by the Warrantholder at the  Warrantholder's  option. It
is the  sole  responsibility  of the  Warrantholder  to  ensure  that  all  such
restrictions have been observed.  Upon any permitted assignment or transfer, the
Warrantholder shall furnish the Corporation with such information  regarding the
transferee as the Corporation may reasonably require to register this Warrant in
the name of the  transferee.  The  Corporation  shall be  obliged  to  refuse to
register any proposed  transfer of this Warrant or underlying Shares unless made
in accordance  with the  provisions  of  Regulation S, pursuant to  registration
under the Securities Act or pursuant to an exemption from registration.

4.       Replacement

         Upon receipt of evidence  satisfactory  to the Corporation of the loss,
theft,  destruction  or  mutilation  of this  Warrant  and, if  requested by the
Corporation,   upon  delivery  of  a  bond  of  indemnity  satisfactory  to  the
Corporation (or, in the case of mutilation, upon surrender of this Warrant), the
Corporation will issue to the  Warrantholder a replacement  Warrant  (containing
the same terms and conditions as this Warrant).

5.       Expiry Date

         This Warrant shall expire and all rights to purchase  Shares  hereunder
shall  cease and  become  null and void at 5:00  p.m.  (Eastern  Standard  Time)
__________, 2005.

6.       Amendment

         Neither  this  Warrant  nor any term  hereof  may be  changed,  waived,
discharged or terminated  except by an instrument in writing signed by the party
against which  enforcement  of the change,  waiver,  discharge or termination is
sought,  or by the  affirmative  consent  in  writing  of  holders  of at  least
two-thirds of the then outstanding Warrants.

7.       Governing Law

         The laws of the State of New York and  applicable  federal  laws of the
United States shall govern this Warrant.

8.       Successors

         This  Warrant  shall enure to the benefit of and shall be binding  upon
the Warrantholder and the Corporation and their respective successors.

         IN WITNESS WHEREOF the Corporation has caused this Warrant to be signed
by its duly authorised officers and its corporate seal hereto affixed.

         DATED                     .
              --------------------


                                      LIFE MEDICAL SCIENCES, INC.



                                      By:
                                          -------------------------------


<PAGE>



                       Annex "A" to Share Purchase Warrant

                              Election to Purchase

         The undersigned Warrantholder hereby irrevocably elects to exercise the
Warrant  issued by Life Medical  Sciences,  Inc.  dated , 2003 for the number of
common shares (or other property or securities  subject  thereto)  ("Shares") as
set forth below:

         (a)      Number of Shares to be Acquired:      ___________________

         (b)      Exercise Price per Share:             $__________________

         (c)      Aggregate Purchase Price
                  [(a) multiplied by (b)]               $__________________

and  hereby  tenders a  certified  or  cashier's  cheque or bank  draft for such
aggregate  purchase  price,  and  directs  such  Shares to be  registered  and a
certificate therefor to be issued as directed below.


     DATED this                          day of                    ,       .
                ------------------------        -------------------  ------


Witness                                              Signature


Direction as to Registration
----------------------------

Name of Registered Holder:
                                 ---------------------------------------
Address of Registered Holder:
                                 ---------------------------------------

                                 ---------------------------------------

<PAGE>

                                    Annex "B"



TO:  LIFE MEDICAL SCIENCES, INC.



         FOR VALUE RECEIVED, the undersigned hereby sells, transfers and assigns
unto the within warrant  (herein called the "Warrant").  The undersigned  hereby
irrevocably  instructs you to transfer the Warrant on your books of registration
and to issue in  substitution  therefor a new warrant  exercisable  for the same
number of shares or other securities or property as the Warrant.



           DATED the                  day of                    ,       .
                     ----------------        -------------------  ------




Signature of Transferor is hereby guaranteed:



                                        ----------------------------------


Note: The signature to this Warrant  transfer must  correspond  with the name as
set forth on the face of the Warrant in every particular  without  alteration or
enlargement or any change whatsoever,  and must be guaranteed by a bank or other
financial institution acceptable to the Corporation.



<PAGE>


                                   Appendix II

                                                      Warrant No:
                                                                 ---------------

THIS WARRANT AND THE SHARES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE NOT BEEN
REGISTERED  UNDER THE UNITED  STATES  SECURITIES  ACT OF 1933,  AS AMENDED  (THE
"ACT"),  STATE SECURITIES LAWS IN THE UNITED STATES OR THE SECURITIES LAW OF ANY
OTHER  COUNTRY  AND MAY  NOT BE  SOLD,  TRANSFERRED,  PLEDGED,  HYPOTHECATED  OR
OTHERWISE  DISPOSED  OF UNLESS (A) SUCH  TRANSACTION  OCCURS  OUTSIDE THE UNITED
STATES IN A  TRANSACTION  MEETING THE  REQUIREMENTS  OF RULE 904 OF REGULATION S
UNDER  THE  ACT (OR  SUCH  SUCCESSOR  RULE OR  REGULATION  THEN IN  EFFECT),  IF
APPLICABLE,  AND IN COMPLIANCE WITH APPLICABLE  STATE  SECURITIES LAWS, (B) THIS
WARRANT AND THE SHARES  ISSUABLE  UPON  EXERCISE OF THIS WARRANT ARE  REGISTERED
UNDER THE ACT OR (C) SUCH  TRANSACTION  CONSTITUTES A TRANSACTION THAT OTHERWISE
DOES NOT REQUIRE  REGISTRATION  UNDER THE ACT OR ANY APPLICABLE STATE SECURITIES
LAWS, AND THE HOLDER PRIOR TO SUCH  TRANSACTION HAS FURNISHED TO THE CORPORATION
AN  OPINION  OF  COUNSEL  OF  RECOGNIZED  STANDING  TO  THAT  EFFECT  REASONABLY
SATISFACTORY TO THE CORPORATION,  SUBJECT IN EACH CASE TO ANY APPLICABLE  UNITED
STATES FEDERAL OR STATE OR FOREIGN SECURITIES LAW RESTRICTIONS APPLICABLE TO THE
RESALE OF THIS WARRANT AND THE SHARES ISSUABLE UPON EXERCISE OF THIS WARRANT.

THIS  WARRANT  MAY NOT BE  EXERCISED  BY OR ON  BEHALF OF A U.S.  PERSON  AND NO
SECURITIES  MAY BE DELIVERED IN THE UNITED  STATES UPON EXERCISE OF THIS WARRANT
UNLESS  THE  EXERCISE  IS  REGISTERED  UNDER THE ACT OR AN  EXEMPTION  FROM SUCH
REGISTRATION IS AVAILABLE.  ANY PERSON  EXERCISING THIS WARRANT WILL BE REQUIRED
TO PROVIDE (1) WRITTEN  CERTIFICATION  THAT IT IS NOT A U.S.  PERSON  WITHIN THE
MEANING OF REGULATION S OF THE ACT AND THAT THIS WARRANT IS NOT BEING  EXERCISED
WITHIN THE UNITED  STATES OR ON BEHALF OF, OR FOR THE  ACCOUNT OR BENEFIT  OF, A
U.S.  PERSON OR A PERSON IN THE  UNITED  STATES,  OR (2) A  WRITTEN  OPINION  OF
COUNSEL OF  RECOGNIZED  STANDING TO THE EFFECT THAT THIS  WARRANT AND THE SHARES
ISSUABLE  UPON EXERCISE OF THIS WARRANT HAVE BEEN  REGISTERED  UNDER THE ACT AND
UNDER ANY APPLICABLE U.S. STATE SECURITIES LAWS OR ARE EXEMPT FROM  REGISTRATION
THEREUNDER. HEDGING TRANSACTIONS INVOLVING THESE SECURITIES MAY NOT BE CONDUCTED
UNLESS IN COMPLIANCE WITH THE SECURITIES ACT.



                        WARRANT TO PURCHASE COMMON STOCK

                      ______________ Shares of Common Stock


                           LIFE MEDICAL SCIENCES, INC.

                             _____________ , 2003

                                       to

                                  June 30, 2003



         THIS CERTIFIES THAT, for good and valuable  consideration,  the receipt
of which is hereby acknowledged,  _______________ (the  "Warrantholder") with an
address at  _____________________,  is the registered holder of this Warrant and
is entitled to subscribe  for and purchase from Life Medical  Sciences,  Inc., a
Delaware  corporation (herein called the  "Corporation"),  at any time after the
date hereof and before 5:00 p.m.  (Eastern  Standard Time) on June 30, 2003 (the
"Time of Expiry"),  up to ______________ fully paid and non-assessable shares of
common  stock par value  $.001 per  share of the  Corporation  ("Shares")  at an
exercise  price of $0.12 per Share,  subject to  adjustment  as  provided  below
(collectively the "Exercise  Price").  This Warrant is subject to the provisions
of the Investor Rights Agreement dated as of __________________,  2003 among the
Corporation and certain  Warrantholders  as well as to a subscription  agreement
entered into with the original  Warrantholder  in  connection  with the offering
referred to in Section 1 below (the "Subscription Agreement"), and the following
provisions, terms and conditions:

1.       Designation

         This  warrant  certificate  is one of a series of warrant  certificates
(collectively,  the "Warrants")  issued to Warrantholders  for value received by
the  Corporation  in  connection  with an offering by the  Corporation  of up to
605,000  units,  each  unit  consisting  of one  share of  Series C  Convertible
Preferred  Stock,  $.01 par value per share,  of the  Corporation,  one two year
warrant to purchase ten (10) Shares at an exercise  price of $0.12 per share and
one Warrant to purchase ten (10) Shares.

2.       Exercise of Warrants

         (a)      Election to  Purchase.  This  Warrant may be  exercised by the
                  Warrantholder  prior to the Time of Expiry in whole or in part
                  and in accordance with the provisions hereof by delivery of an
                  Election to Purchase in a form  substantially the same as that
                  attached hereto as Annex "A", properly completed and executed,
                  together  with this Warrant and payment of the Exercise  Price
                  multiplied  by the number of Shares  specified in the Election
                  to Purchase to the Corporation at P.O. Box 219, Little Silver,
                  New Jersey 07739, U.S.A., Attention: Robert P. Hickey, or such
                  other   address  as  may  be   notified   in  writing  by  the
                  Corporation.   Payment  shall  be  made  in  U.S.  dollars  by
                  certified or bank cashier's cheque payable to the order of the
                  Corporation.

         (b)      Exercise.  The Corporation shall,  promptly following the date
                  it receives a duly executed Election to Purchase, this Warrant
                  and  payment  of the  Exercise  Price for the number of Shares
                  specified in the Election to Purchase (the  "Exercise  Date"),
                  issue or cause to be issued that number of Shares specified in
                  the  Election  to  Purchase  as fully paid and  non-assessable
                  Shares.   Such  duly  executed   Election  to  Purchase  shall
                  constitute   the   Warrantholder's   acknowledgement   of  and
                  undertaking  to comply to the reasonable  satisfaction  of the
                  Corporation and its counsel,  with all applicable laws, rules,
                  regulations  and policies of every stock  exchange  upon which
                  the Shares of the  Corporation may from time to time be listed
                  or traded, and any other applicable governmental or regulatory
                  authorities.

         (c)      Share  Certificates.  As  promptly  as  practicable  after the
                  Exercise  Date (and in any event not later  than 10 days after
                  the  Exercise  Date),  the  Corporation   shall  send  to  the
                  Warrantholder,  registered  in  such  name  or  names  as  the
<PAGE>
                                       3



                  Warrantholder  may  direct  or if no such  direction  has been
                  given,  in the name of the  Warrantholder,  a  certificate  or
                  certificates  for  the  number  of  Shares  specified  in  the
                  Election to Purchase.  To the extent  permitted  by law,  such
                  exercise shall be deemed to have been effected as of the close
                  of business on the Exercise  Date, and at such time the rights
                  of  the  Warrantholder  with  respect  to  the  number  of the
                  Warrants  which have been  exercised as such shall cease,  and
                  the person or  persons in whose name or names any  certificate
                  or  certificates  for Shares shall then be issuable  upon such
                  exercise  shall be deemed to have become the holder or holders
                  of record of the Shares represented thereby.

         (d)      Fractional  Shares.  No fractional Shares shall be issued upon
                  exercise of this Warrant and no payments or  adjustment  shall
                  be made upon any exercise on account of any cash  dividends on
                  the  Shares  issued  upon  such  exercise.  If any  fractional
                  interest in a Share would,  except for the  provisions  of the
                  first sentence of this  subsection  2(d), be deliverable  upon
                  the  exercise  of this  Warrant,  the  number  of Shares to be
                  issued to the Warrantholder  upon the exercise of this Warrant
                  shall be rounded to the nearest whole number.

         (e)      Subscription for Less than Entitlement.  The Warrantholder may
                  from  time to time  subscribe  for and  purchase  a number  of
                  Shares  less than the  aggregate  number  which the  holder is
                  entitled to purchase pursuant to this Warrant. In the event of
                  a  purchase  of a number  of Shares  less  than the  aggregate
                  number which may be purchased  pursuant to this  Warrant,  the
                  holder thereof shall be entitled to receive, without charge, a
                  new  Warrant  certificate  in  respect  of the  balance of the
                  Shares subject to this Warrant which were not purchased by the
                  Warrantholder.


         (f)      Corporate Changes.  If the Corporation shall be a party to any
                  reorganization,   merger,   dissolution  or  sale  of  all  or
                  substantially  all of its assets (the "Event"),  (other than a
                  reorganization  or  merger  in which  the  Corporation  is the
                  surviving  entity) then the securities  purchasable  hereunder
                  shall be the  securities  (the "Event  Securities")  which the
                  Warrantholder  would have received or been entitled to receive
                  in such Event if such  Warrantholder  had fully exercised this
                  Warrant  prior to the  record  date (or if there was no record
                  date, then prior to the effective date) of such Event, and the
                  Exercise  Price shall be adjusted to be the amount  determined
                  by multiplying the Exercise Price in effect  immediately prior
                  to the Event by the number of Shares as to which this  Warrant
                  was unexercised  immediately  prior to the Event, and dividing
                  the  product  thereof  by  the  number  of  Event  Securities;
                  provided  however,  that the Event  shall not be carried  into
                  effect  unless all  necessary  steps have been taken to ensure
                  that any  surviving  entity  is  subject  to the terms of this
                  Warrant as adjusted.

                  Notwithstanding anything to the contrary contained in the
                  immediately preceding paragraph, in the event of a transaction
                  contemplated by such paragraph in which the surviving or
                  purchasing corporation demands that all outstanding Warrants
                  be extinguished prior to the closing date of the contemplated
                  transaction, the Corporation shall give prior notice (the
                  "Merger Notice") thereof to the Holders advising them of such
                  transaction. The


<PAGE>
                                       4


                  Holders  shall  have ten  days  after  the date of the  Merger
                  Notice to elect to (i)  exercise  the  Warrants  in the manner
                  provided  herein,  or  (ii)  receive  from  the  surviving  or
                  purchasing corporation the same consideration  receivable by a
                  holder of the number of shares of Common  Stock for which this
                  Warrant might have been  exercised  immediately  prior to such
                  consolidation,  merger,  sale,  or  purchase  reduced  by such
                  amount of the consideration as has a market value equal to the
                  Exercise Price, as determined by the board of directors of the
                  Corporation in accordance  with the terms of the Warrants.  If
                  any  Holder  fails to timely  notify  the  Corporation  of its
                  election,  the Holder shall be deemed for all purposes to have
                  elected  the  option  set  forth in (ii)  above.  Any  amounts
                  receivable by a Holder who has elected the option set forth in
                  (ii)  above  shall  be  payable  at the same  time as  amounts
                  payable  to   stockholders   in   connection   with  any  such
                  transaction.

         (g)      Subdivision or Consolidation of Shares

                  (i)      In the  event the  Corporation  shall  subdivide  its
                           outstanding  Shares into a greater  number of Shares,
                           the  Exercise  Price in effect  immediately  prior to
                           such subdivision  shall be  proportionately  reduced,
                           and conversely,  in the event the outstanding  Shares
                           of  the  Corporation  shall  be  consolidated  into a
                           smaller  number  of  Shares,  the  Exercise  Price in
                           effect immediately prior to such consolidation  shall
                           be proportionately increased.

                  (ii)     Upon  each   adjustment  of  the  Exercise  Price  as
                           provided herein,  the Warrantholder  shall thereafter
                           be  entitled  to  acquire,   at  the  Exercise  Price
                           resulting from such adjustment,  the number of Shares
                           (calculated to the nearest tenth of a Share) obtained
                           by   multiplying   the   Exercise   Price  in  effect
                           immediately prior to such adjustment by the number of
                           Shares  which may be acquired  hereunder  immediately
                           prior to such  adjustment  and  dividing  the product
                           thereof by the  Exercise  Price  resulting  from such
                           adjustment.

         (h)      Change  or  Reclassification  of  Shares.  In  the  event  the
                  Corporation shall change or reclassify its outstanding  Shares
                  into a different  class of  securities,  this Warrant shall be
                  adjusted as follows so as to apply to the  successor  class of
                  securities:

                  (i)      the  number  and  kind  of  the  successor  class  of
                           securities which the Warrantholder  shall be entitled
                           to acquire shall be the aggregate  number and kind of
                           securities  which, if this Warrant had been exercised
                           immediately prior to such change or reclassification,
                           the Warrantholder would have been entitled to receive
                           by reason of such change or reclassification; and

                  (ii)     the Exercise Price shall be determined by multiplying
                           the Exercise Price in effect immediately prior to the
                           change or reclassification by the number of Shares as
                           to which this  Warrant  was  unexercised  immediately
                           prior to the change or reclassification, and dividing
<PAGE>
                                       5


                           the  product  thereof by the number of the  successor
                           class of securities  determined in paragraph  2(h)(i)
                           hereof.

         (i)      Distribution  to  Shareholders.  If and  whenever  at any time
                  prior to the Time of Expiry the Corporation shall fix a record
                  date or if a date is  otherwise  established  (any  such  date
                  being  hereinafter  referred to in this subsection 2(i) as the
                  "record date") for the issuance of rights, options or warrants
                  to all or  substantially  all the  holders of the  outstanding
                  Shares  of  the  Corporation  entitling  them,  for  a  period
                  expiring  not more than 45 days after  such  record  date,  to
                  subscribe  for  or  purchase  Shares  of  the  Corporation  or
                  securities  convertible  into or exchangeable  for Shares at a
                  price per share or, as the case may be, having a conversion or
                  exchange  price  per share  less  than 95% of the Fair  Market
                  Value  (as  hereinafter  defined)  on such  record  date,  the
                  Exercise Price shall be adjusted immediately after such record
                  date  so  that  it  shall  equal  the  price   determined   by
                  multiplying  the Exercise  Price in effect on such record date
                  by a  fraction,  of which  the  numerator  shall be the  total
                  number of Shares outstanding on such record date plus a number
                  equal to the number arrived at by dividing the aggregate price
                  of  the  total  number  of  additional   Shares   offered  for
                  subscription or purchase or, as the case may be, the aggregate
                  conversion   or   exchange   price  of  the   convertible   or
                  exchangeable  securities  so offered by the Fair Market Value,
                  and of which  the  denominator  shall be the  total  number of
                  Shares  outstanding  on such record date plus the total number
                  of additional Shares so offered (or into which the convertible
                  or  exchangeable  securities  so offered  are  convertible  or
                  exchangeable);  Shares owned by or held for the account of the
                  Corporation  or any  subsidiary  of the  Corporation  shall be
                  deemed  not to be  outstanding  for the  purpose  of any  such
                  computation;   such  adjustment  shall  be  made  successively
                  whenever  such a record date is fixed;  to the extent that any
                  rights or  warrants  are not so  issued or any such  rights or
                  warrants are not exercised  prior to the  expiration  thereof,
                  the Exercise  Price shall then be  readjusted  to the Exercise
                  Price  which  would then be in effect if such  record date had
                  not been fixed or to the Exercise Price which would then be in
                  effect  based  upon the  number  of Shares  or  conversion  or
                  exchange  rights  contained  in  convertible  or  exchangeable
                  securities actually issued upon the exercise of such rights or
                  warrants, as the case may be.

         (j)      Additional  Subscriptions.  If at  any  time  the  Corporation
                  grants  to its  shareholders  the right to  subscribe  for and
                  purchase pro rata  additional  securities  of the  Corporation
                  (other than securities  described in subsection (2)(i) hereof)
                  or of any  other  corporation  or  entity,  there  shall be no
                  adjustments  made to the number of Shares or other  securities
                  subject  to  this  Warrant  or  to  the   Exercise   Price  in
                  consequence thereof and this Warrant shall remain unaffected.

         (k)      Carry Over of Adjustments. No adjustment of the Exercise Price
                  shall be made if the amount of such  adjustment  shall be less
                  than 1% of the Exercise Price in effect  immediately  prior to
                  the event  giving rise to the  adjustment,  provided  however,
                  that in such  case any  adjustment  that  would  otherwise  be
                  required then to be made shall be carried forward and shall be
                  made at the time of and  together  with

<PAGE>
                                       6


                  the  next  subsequent  adjustment  which,  together  with  any
                  adjustment so carried forward,  shall amount to at least 1% of
                  the Exercise Price in effect prior to such adjustment.

         (l)      Notice of  Adjustment.  Upon any  adjustment  of the number of
                  Shares and upon any adjustment of the Exercise Price, then and
                  in each such case the  Corporation  shall give written  notice
                  thereof to the  Warrantholder,  which  notice  shall state the
                  Exercise  Price and the  number of Shares or other  securities
                  into which each  Warrant is  exercisable  resulting  from such
                  adjustment,  and  shall  set forth in  reasonable  detail  the
                  method  of   calculation   and  the  facts   upon  which  such
                  calculation  is based.  Upon the  request  of a  Warrantholder
                  there shall be transmitted  promptly to all  Warrantholders  a
                  statement prepared by the firm of independent certified public
                  accountants  retained to audit the financial statements of the
                  Corporation  to the  effect  that  such  firm  concurs  in the
                  Corporation's calculation of the change.

         (m)      Other Notices. If at any time:

                  (i)      the  Corporation  shall declare any dividend upon its
                           Shares;

                  (ii)     the Corporation shall offer for subscription pro rata
                           to the holders of its Shares any additional shares of
                           any class or other rights;

                  (iii)    there   shall  be  any  capital   reorganization   or
                           reclassification   of  the   capital   stock  of  the
                           Corporation, or consolidation, amalgamation or merger
                           of  the   Corporation   with,   or  sale  of  all  or
                           substantially   all  of  its   assets   to,   another
                           corporation (other than the Acquisition as defined in
                           the Subscription Agreement); or

                  (iv)     there   shall   be   a   voluntary   or   involuntary
                           dissolution,   liquidation   or   winding-up  of  the
                           Corporation,

                  then, in any one or more of such cases, the Corporation shall
                  give to the Warrantholder (A) at least 20 days' prior written
                  notice of the date on which a record shall be taken for such
                  dividend, distribution or subscription rights or for
                  determining rights to vote in respect of any such
                  reorganization, reclassification, consolidation, merger,
                  amalgamation, sale, dissolution, liquidation or winding-up and
                  (B) in the case of any such reorganization, reclassification,
                  consolidation, merger, sale, dissolution, liquidation or
                  winding-up, at least 20 days' prior written notice of the date
                  when the same shall take place. Such notice in accordance with
                  the foregoing clause shall also specify (A) in the case of any
                  such dividend, distribution or subscription rights, the date
                  on which the holders of Shares shall be entitled thereto, and
                  (B) in the case of any transaction described in the foregoing
                  clauses (iii) and (iv), the date on which the holders of
                  Shares are to be entitled to exchange their Shares for
                  securities or other property deliverable upon such
                  reorganization, reclassification, consolidation, merger,
                  amalgamation, sale, dissolution, liquidation or winding-up, as
                  the case may be.



<PAGE>
                                       7


         (n)      Shares to be Reserved.  The Corporation will at all times keep
                  available and reserve out of its authorized Shares, solely for
                  the purpose of issue upon the exercise of this  Warrant,  such
                  number of Shares as shall then be issuable  upon the  exercise
                  of this Warrant. The Corporation covenants and agrees that all
                  Shares which shall be so issuable will, upon issuance, be duly
                  authorized  and  issued,  fully paid and  non-assessable.  The
                  Corporation  will take all such action as may be  necessary to
                  assure that all such Shares may be so issued without violation
                  of any  applicable  requirements  of any stock  exchange  upon
                  which  the  Shares  of the  Corporation  may be  listed  or in
                  respect of which the Shares are qualified for unlisted trading
                  privileges.  The  Corporation  will take all such action as is
                  within  its power to  assure  that all such  Shares  may be so
                  issued without violation of any applicable law.

         (o)      Issue Tax.  The issuance of  certificates  for Shares upon the
                  exercise of this Warrant  shall be made without  charge to the
                  Warrantholder   for  any  issuance  tax  in  respect  thereto,
                  provided that the Corporation shall not be required to pay any
                  tax which may be payable in respect of any  transfer  involved
                  in the  issuance  and  delivery of any  certificate  in a name
                  other than that of the Warrantholder.

         (p)      Fair  Market  Value.  For  the  purposes  of  any  computation
                  hereunder, unless otherwise specified, the "Fair Market Value"
                  at any date  shall be: (i) if the Shares are listed on a stock
                  exchange  or  quoted  on  a  similar  securities  market,  the
                  weighted  average  sale price per share for the Shares for any
                  20  consecutive  trading days  (selected  by the  Corporation)
                  commencing  not more than 25 trading  days before such date on
                  the principal stock exchange or similar securities market upon
                  which the Shares are listed or quoted,  as the case may be; or
                  (ii) if the  computation  is being made in  connection  with a
                  public offering of Shares,  the gross offering price per Share
                  under  the  offering;  or (iii) in all other  cases,  the Fair
                  Market Value shall be  determined by the Board of Directors in
                  good  faith,  which  determination  shall be  conclusive.  The
                  weighted  average sale price shall be  determined  by dividing
                  the  aggregate  sale  price  of all  Shares  sold on the  said
                  exchange or market during the said 20 consecutive trading days
                  by the total number of Shares so sold.

         (q)      The  Shares  issued  upon  exercise  of the  Warrant  shall be
                  subject  to a stop  transfer  order  and  the  certificate  or
                  certificates  evidencing  such Shares shall bear the following
                  legend:

                  THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
                  REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS
                  AMENDED (THE "ACT"), STATE SECURITIES LAWS IN THE UNITED
                  STATES OR THE SECURITIES LAWS OF ANY OTHER COUNTRY, AND MAY
                  NOT BE SOLD, TRANSFERRED, PLEDGED, HYPOTHECATED OR OTHERWISE
                  DISPOSED OF UNLESS (A) SUCH TRANSACTION OCCURS OUTSIDE THE
                  UNITED STATES IN A TRANSACTION MEETING THE REQUIREMENTS OF
                  RULE 904 OF REGULATION S UNDER THE ACT (OR SUCH SUCCESSOR RULE
                  OR REGULATION THEN IN EFFECT), IF APPLICABLE, AND IN
                  COMPLIANCE WITH APPLICABLE STATE SECURITIES LAWS, (B) THE
                  SECURITIES REPRESENTED BY THIS CERTIFICATE ARE REGISTERED
                  UNDER THE ACT OR (C) SUCH TRANSACTION CONSTITUTES A
                  TRANSACTION THAT OTHERWISE DOES NOT REQUIRE REGISTRATION UNDER
                  THE ACT OR ANY APPLICABLE STATE SECURITIES LAWS, AND THE
                  HOLDER PRIOR TO SUCH TRANSACTION HAS FURNISHED TO THE
                  CORPORATION AN

<PAGE>
                                       8


                  OPINION OF  COUNSEL  OF  RECOGNIZED  STANDING  TO THAT  EFFECT
                  REASONABLY  SATISFACTORY TO THE  CORPORATION,  SUBJECT IN EACH
                  CASE TO ANY APPLICABLE UNITED STATES FEDERAL, STATE OR FOREIGN
                  SECURITIES LAW  RESTRICTIONS  APPLICABLE TO THE RESALE OF THIS
                  WARRANT AND THE SHARES ISSUABLE UPON EXERCISE OF THIS WARRANT.

3.       Transfer

         Subject to compliance by the  Warrantholder  with any applicable resale
restrictions,  the Corporation  acknowledges and agrees that this Warrant may be
assigned or transferred by the Warrantholder at the  Warrantholder's  option. It
is the  sole  responsibility  of the  Warrantholder  to  ensure  that  all  such
restrictions have been observed.  Upon any permitted assignment or transfer, the
Warrantholder shall furnish the Corporation with such information  regarding the
transferee as the Corporation may reasonably require to register this Warrant in
the name of the  transferee.  The  Corporation  shall be  obliged  to  refuse to
register any proposed  transfer of this Warrant or underlying Shares unless made
in accordance  with the  provisions  of  Regulation S, pursuant to  registration
under  the   Securities   Act  or  pursuant  to  an  available   exemption  from
registration.

4.       Replacement

         Upon receipt of evidence  satisfactory  to the Corporation of the loss,
theft,  destruction  or  mutilation  of this  Warrant  and, if  requested by the
Corporation,   upon  delivery  of  a  bond  of  indemnity  satisfactory  to  the
Corporation (or, in the case of mutilation, upon surrender of this Warrant), the
Corporation will issue to the  Warrantholder a replacement  Warrant  (containing
the same terms and conditions as this Warrant).

5.       Expiry Date

         This Warrant shall expire and all rights to purchase  Shares  hereunder
shall cease and become  null and void at 5:00 p.m.  (Eastern  Standard  Time) on
June 30, 2003.

6.       Amendment

         Neither  this  Warrant  nor any term  hereof  may be  changed,  waived,
discharged or terminated  except by an instrument in writing signed by the party
against which  enforcement  of the change,  waiver,  discharge or termination is
sought,  or by the  affirmative  consent  in  writing  of  holders  of at  least
two-thirds of the then outstanding Warrants.


7.       Governing Law

         The laws of the State of New York and  applicable  federal  laws of the
United States shall govern this Warrant.


<PAGE>
                                       9


8.       Successors

         This  Warrant  shall enure to the benefit of and shall be binding  upon
the Warrantholder and the Corporation and their respective successors.

         IN WITNESS WHEREOF the Corporation has caused this Warrant to be signed
by its duly authorised officers and its corporate seal hereto affixed.

                  DATED the                 day of                     , 2003.
                            ----------------         ------------------


                                      LIFE MEDICAL SCIENCES, INC.



                                      By:
                                         --------------------------------


<PAGE>

                       Annex "A" to Share Purchase Warrant

                              Election to Purchase

         The undersigned Warrantholder hereby irrevocably elects to exercise the
Warrant  issued by Life Medical  Sciences,  Inc.  dated , 2003 for the number of
common shares (or other property or securities  subject  thereto)  ("Shares") as
set forth below:

         (a)      Number of Shares to be Acquired:   ____________________

         (b)      Exercise Price per Share:         $____________________

         (c)      Aggregate Purchase Price          $____________________
                  [(a) multiplied by (b)]

and hereby tenders a certified or cashier's cheque or bank draft for such
aggregate purchase price, and directs such Shares to be registered and a
certificate therefor to be issued as directed below.


     DATED this                          day of                    ,       .
               ------------------------        -------------------  ------



----------------------------                    ----------------------------
Witness                                         Signature


Direction as to Registration

Name of Registered Holder:
                             ---------------------------------------------------
Address of Registered Holder:
                             ---------------------------------------------------

                             ---------------------------------------------------

<PAGE>



                                    Annex "B"



TO:  LIFE MEDICAL SCIENCES, INC.



         FOR VALUE RECEIVED, the undersigned hereby sells, transfers and assigns
unto the within warrant  (herein called the "Warrant").  The undersigned  hereby
irrevocably  instructs you to transfer the Warrant on your books of registration
and to issue in  substitution  therefor a new warrant  exercisable  for the same
number of shares or other securities or property as the Warrant.



              DATED the                  day of                    ,       .
                        ----------------        -------------------  ------


Signature of Transferor is hereby guaranteed:


                                                -------------------------------
                                                (Signature of Transferor)


Note: The signature to this Warrant  transfer must  correspond  with the name as
set forth on the face of the Warrant in every particular  without  alteration or
enlargement or any change whatsoever,  and must be guaranteed by a bank or other
financial institution acceptable to the Corporation.

<PAGE>


                                   Appendix IV



                           LIFE MEDICAL SCIENCES, INC.
                            INVESTOR RIGHTS AGREEMENT



This Investor Rights Agreement (the  "Agreement") is made and entered into as of
January , 2003 by and among Life Medical Sciences,  Inc., a Delaware corporation
(the  "Corporation") and the investors listed on the signature pages hereto (the
"Investors").

                                    RECITALS

WHEREAS  the  Corporation  desires  the  Investors  to  purchase  Units  of  the
Corporation   ("Units"),   each  Unit   consisting  of  (i)  one  share  of  the
Corporation's Series C Convertible  Preferred Stock ("Series C Preferred"),  par
value of $0.01 per share,  (ii) one warrant to purchase up to ten (10) shares of
Common  Stock at an exercise  price of $0.12 per share  exercisable  at any time
until  the  second  anniversary  of the  original  issuance  date (a  "Two  Year
Warrant"),  and (iii) one  warrant to  purchase  up to ten (10) shares of Common
Stock at an exercise price of $0.12 per share exercisable at any time until June
30, 2003 (a "Short Term Warrant), at a purchase price of $1.20 per Unit; and

WHEREAS  the  purchase  of the  Units is in  connection  with an  offering  (the
"Offering") by the  Corporation to the Investors of up to 605,000 Units pursuant
to a subscription agreement dated ______ , 2003 (the "Subscription  Agreement");
and

WHEREAS  as an  inducement  for the  Investors  to enter  into the  Subscription
Agreement,  the  Corporation  desires  to enter  into  this  Agreement  with the
Investors.

NOW THEREFOR in consideration of the mutual covenants set forth herein and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto, intending to be legally bound, hereby agree as
follows:



1.       REGISTRATION RIGHTS.

         1.1      Definitions.

         (a)  "As-Converted  Basis" means  assuming the  conversion  into Common
Stock or exercise  for Common  Stock of all  securities  directly or  indirectly
convertible into, or exercisable for, Common Stock.

         (b) "Common  Stock" means the  Corporation's  Common  Stock,  par value
$0.001 per share.


<PAGE>
                                      -2-



         (c) "Exchange Act" means the United States  Securities  Exchange Act of
1934, as amended.

         (d) "Form S-3" means such form under the Securities Act as is in effect
on the date hereof or any successor  registration  form under the Securities Act
subsequently  adopted by the SEC which  permits  inclusion or  incorporation  of
substantial information by reference to other documents filed by the Corporation
with the SEC.

         (e) "Holder" means any person owning of record  Registrable  Securities
that  have  not been  sold in a public  offering  or sold  pursuant  to Rule 144
promulgated  under  the  Securities  Act or  any  assignee  of  record  of  such
Registrable  Securities  to whom  rights  under  this  Agreement  have been duly
assigned in accordance with this Agreement.

         (f)  "Initiating  Holder"  means  any  Holder  or  Holders  who  in the
aggregate are Holders of not less than 30% of the  then-outstanding  Registrable
Securities which have not been sold in a public offering.

         (g) "June 1999 Placement" means the Corporation's  private placement of
an aggregate of 1,505,003 shares of Common Stock completed in June 1999.

         (h) "register," "registered" and "registration" refer to a registration
effected by preparing and filing a registration statement in compliance with the
Securities  Act,  and the  declaration  or  ordering  of  effectiveness  of such
registration statement.

         (i)  "Registrable  Securities"  means:  (i) all shares of Common  Stock
issued or issuable  pursuant to the conversion of Series C Preferred or exercise
of the Short Term Warrants,  Two Year Warrants or Broker Warrants (as defined in
the  Subscription  Agreement)  and  (ii) any  shares  of  Common  Stock or other
securities   issued  in  connection  with  any  stock  split,   stock  dividend,
recapitalization,  reorganization,  merger,  sale of assets or similar  event in
respect  of the  foregoing  securities;  excluding  in all cases,  however,  any
securities that would otherwise be Registrable Securities that have been sold by
a person in a transaction  in which rights under this Agreement are not assigned
in  accordance  with this  Agreement,  any  securities  that would  otherwise be
Registrable Securities that have been sold in a public offering or sold pursuant
to Rule 144  promulgated  under the Securities Act, and, solely for the purposes
of a registration under Section 1.2,  Registrable  Securities  eligible for sale
pursuant to Rule 144(k)  promulgated  under the Securities Act.  Notwithstanding
the foregoing, shares of Common Stock issued or issuable pursuant to exercise of
the Broker Warrants shall be deemed Registrable Securities only for so long, and
for such  purposes,  as shares of Common  Stock  issued or issuable  pursuant to
exercise of the Two Year Warrants continue to be Registrable Securities.

         (j)  "Registration   Expenses"  means  all  expenses  incurred  by  the
Corporation  in complying with Sections 1.2 and 1.3 hereof,  including,  without
limitation,  all  registration  and filing  fees,  printing  expenses,  fees and
disbursements  of counsel and accountants for the  Corporation,  reasonable fees
and expenses of one counsel for all the Holders,  blue sky fees and expenses and
the  expense  of  any  special  audits  incident  to or  required  by  any  such
registration  (but  excluding  the  compensation  of  regular  employees  of the
Corporation, which shall be paid in any event by the Corporation).

         (k) "Securities Act" means the United States Securities Act of 1933, as
amended.

<PAGE>
                                      -3-


         (l) "Selling  Expenses"  means all  underwriting  discounts and selling
commissions applicable to the sale of Registrable Securities.

         (m) "Series A Demand  Period"  means the period during which holders of
Series A Placement  Securities  (as defined in Section  1.2(b)) are  entitled to
request  demand  registration  pursuant  to Section 1.2 of the Series A Investor
Rights Agreement.

         (n) "Series A Investor  Rights  Agreement"  means the  Investor  Rights
Agreement  dated as of December 15, 2000 among the Corporation and the investors
named therein in connection with the Series A Private Placement.

         (o)  "Series  A  Private  Placement"  mean  the  Corporation's  private
placement of an aggregate of 500,000  shares of Series A  Convertible  Preferred
Stock,  par value $.01 per share  ("Series  A  Preferred")  pursuant  to a Stock
Purchase Agreement dated as of December 15, 2000.

         (p) "Series B Demand  Period"  means the period during which holders of
Series B Placement  Securities  (as  defined in Section 1.2 (b) are  entitled to
request  demand  registration  pursuant  to Section 1.2 of the Series B Investor
Rights Agreement.

         (q) "Series B Investor  Rights  Agreement"  means the  Investor  Rights
Agreement  dated as of March 21, 2002,  among the  Corporation and the investors
named therein in connection with the Series B Private Placement.

         (r)  "Series  B Private  Placement"  means  the  Corporation's  private
placement of an aggregate of 1,112,500 shares of Series B Convertible  Preferred
Stock,  par value  $.01 per  share  ("Series  B  Preferred")  contemplated  by a
Subscription Agreement dated as of March 21, 2002.

     1.2 Requested Registration.

         (a) Request for Registration by Initiating  Holders. If the Corporation
shall receive from an Initiating  Holder,  at any time  following  conversion of
Series C  Preferred  into  Common  Stock and  expiration  of the Series A Demand
Period and Series B Demand Period, a written request that the Corporation effect
any  registration  with respect to all or a part of the Registrable  Securities,
the Corporation will:

                 (i) promptly give written  notice of the proposed  registration
to all other Holders of Registrable Securities; and

                 (ii) use its best efforts to effect, as soon as practicable but
in any event within 90 days of receipt of the  Initiating  Holder's  request for
registration,  such  registration  of the  sale  of the  Registrable  Securities
requested by the  Initiating  Holder,  together  with all or such portion of the
Registrable Securities of any other Holder or Holders joining in such request as
are specified in written  requests  received by the  Corporation  within 30 days
after written notice from the Corporation is given under Section 1.2(a)(i)above;
provided,  however,  that the Corporation  shall not be obligated to effect,  or
take any action to effect, any such registration pursuant to this Section 1.2:


<PAGE>
                                      -4-


               (1) In any particular jurisdiction in which the Corporation would
be required to execute a general consent to service of process in effecting such
registration,  unless  the  Corporation  is  already  subject to service in such
jurisdiction  and except as may be required by the  Securities Act or applicable
rules or regulations thereunder; or

               (2) After the  Corporation  has  effected  one such  registration
pursuant to this Section 1.2 and such  registration has been declared or ordered
effective.

         (b)  Underwriting;  Request by Initiating  Holders.  If the  Initiating
Holder intends to distribute the Registrable  Securities  covered by its request
by means of an underwriting, it shall so advise the Corporation as a part of its
request and the Corporation shall include such information in the written notice
referred  to in Section  1.2(a)(i).  In such  event,  the right of any Holder to
include such  Holder's  Registrable  Securities  in such  registration  shall be
conditioned  upon  such  Holder's  participation  in such  underwriting  and the
inclusion of such Holder's  Registrable  Securities in the underwriting  (unless
otherwise  mutually  agreed by the  Initiating  Holder  and such  Holder) to the
extent provided  herein.  All Holders  proposing to distribute  their securities
through such  underwriting  shall  (together with the Corporation as provided in
Section 1.5(e)) enter into an underwriting  agreement in customary form with the
underwriter or  underwriters  selected for such  underwriting  by the Initiating
Holder  and  reasonably  acceptable  to  the  Corporation.  Notwithstanding  the
foregoing,   if  the  managing  underwriter  advises  the  Corporation  and  the
Initiating  Holder in writing that marketing factors require a limitation of the
number of shares to be included in the registration,  then the Corporation shall
so advise  all  Holders of  Registrable  Securities  which  would  otherwise  be
included in the registration, and the number of shares of Registrable Securities
that may be included in the  underwriting  shall be allocated  among all Holders
who  sought to  include  Registrable  Securities  in the  registration,  in such
proportion (as nearly as  practicable)  among such Holders pro rata based on the
amount  of  Registrable  Securities  owned  by each of  them  (calculated  on an
As-Converted  Basis). For any Holder which is a partnership or corporation,  the
partners,  retired partners and stockholders of such Holder,  or the estates and
family members of any such partners and retired  partners and any trusts for the
benefit of any of the foregoing persons shall be deemed to be a single "Holder,"
and any pro rata reduction with respect to such "Holder" shall be based upon the
aggregate  amount of shares carrying  registration  rights owned by all entities
and  individuals  included in such  "Holder,"  as defined in this  sentence.  In
connection  with a  registration  under this Section 1.2,  the  Corporation  may
include  securities  to be sold for its own  account,  or the  account  of other
persons; provided,  however, that if a registration under this Section 1.2 is to
be effected through an underwriting, the right of the Corporation and such other
persons to include securities in such registration shall be conditioned upon the
Corporation's and such other persons' participation in such underwriting and the
inclusion of such  securities in the  underwriting  (unless  otherwise  mutually
agreed by the Initiating  Holder and the Corporation,  in the case of securities
to be registered for the account of the Corporation, or by the Initiating Holder
and each such other person,  in the case of securities to be registered  for the
account of such other persons) to the extent  provided  herein.  Notwithstanding
the foregoing,  if the managing underwriter advises the Corporation,  such other
persons and the Initiating  Holder in writing that marketing  factors  require a
limitation of the number of shares to be included in the registration,  then (i)
all securities  that the Corporation  sought to be included in the  registration
shall be removed from the  registration  before any  Registrable  Securities are
removed from the registration, (ii) all securities of any such other person that
do not have  registration  rights  pursuant to (A) the Series A Investor  Rights
<PAGE>
                                      -5-


Agreement,  (B) a subscription  agreement  entered into with the  Corporation in
connection  with the June 1999  Placement  or (C) the Series B  Investor  Rights
Agreement  shall  be  removed  from  the  registration  before  any  Registrable
Securities  are removed from the  registration  and (iii) to the extent that any
such other person holds securities that have registration rights pursuant to the
Series A Placement  ("Series A Placement  Securities"),  the June 1999 Placement
("June  1999  Placement  Securities")  or the  Series  B  Placement  ("Series  B
Placement Securities"), and with the Series A Placement Securities and June 1999
Placement  Securities,  "Other Registrable  Securities"),  then  notwithstanding
anything  in this  Section  1.2(b)  to the  contrary,  the  number  of shares of
Registrable  Securities and Other Registrable Securities that may be included in
the underwriting shall be allocated among the Holders and such other persons who
sought to include  their  respective  securities  in the  registration,  in such
proportion (as nearly as practicable)  among such Holders and such other persons
pro rata based on the amount of  Registrable  Securities  and Other  Registrable
Securities  owned  by  each  of  them  (calculated  on an  As-Converted  Basis);
provided,  that notwithstanding  anything in the foregoing to the contrary,  the
rights  of the  Holders  of  Registrable  Securities  to have  such  Registrable
Securities  included in any such registration shall be subordinate to the rights
of the  holders  of Series A  Placement  Securities  and of  Series B  Placement
Securities.  Any  securities  excluded from an  underwriting  under this section
shall be withdrawn from the registration.

         (c) Notwithstanding the foregoing,  if the Corporation shall furnish to
the Initiating  Holder a certificate  signed by the President or Chief Executive
Officer of the Corporation  stating that in the good faith judgment of the Board
of  Directors  of the  Corporation,  it would be  seriously  detrimental  to the
Corporation and its shareholders for such registration statement to be filed and
it is therefore  essential to defer the filing of such  registration  statement,
then the  Corporation  shall have the right to defer such filing for a period of
not more than 60 days after  receipt of the  request of the  Initiating  Holder;
provided,  however,  that the  Corporation  may not utilize this right more than
once in any nine-month period.

         (d)  Except  for  registration  statements  on Form  S-4,  Form  S-8 or
successor forms thereto,  the Corporation  will not file with the Commission any
other  registration  statement,  whether  for its own  account  or that of other
stockholders,  from the date of receipt of a notice from the Initiating  Holders
requesting  registration  pursuant to this  Section 1.2 until three months after
the declaration of  effectiveness  of a registration  statement filed under this
Section 1.2 (or the earlier  termination of such requested  registration  or the
related   distribution),   except  where  the  Corporation  is  contemplating  a
registration solely for its own account and defers the registration requested by
the  Initiating  Holders  under  Section  1.2(c) to permit  the  Corporation  to
complete such registration for its own account.

    1.3. Piggyback Registrations.

         (a) Notice.  The  Corporation  shall notify all Holders of  Registrable
Securities  in  writing  promptly  after  determining  to file any  registration
statement  under the Securities Act for purposes of effecting a public  offering
of securities of the  Corporation  whether for its own account or the account of
other  stockholders or both (excluding any registration  statements on Form S-4,
Form S-8 or successor forms thereto,  and a registration  under Section 1.2) and
will include in such  registration  statement all of the Registrable  Securities
specified  in a written  request  or  requests  made by any Holder or Holders in
response to such notice from the Corporation. If a Holder decides not to include
all of its Registrable Securities in any registration statement thereafter filed
by the Corporation, such Holder shall nevertheless continue

<PAGE>
                                      -6-


to have the  right to  include  any  Registrable  Securities  in any  subsequent
registration  statement  or  registration  statements  as  may be  filed  by the
Corporation with respect to offerings of its securities,  all upon the terms and
conditions set forth herein.

         (b)  Underwriting.   If  a  registration   statement  under  which  the
Corporation  gives notice under Section 1.3(a) is for an underwritten  offering,
then the  Corporation  shall so advise the Holders of Registrable  Securities in
the notice delivered under Section 1.3(a).  In such event, the right of any such
Holder's  Registrable  Securities to be included in a  registration  pursuant to
this Section 1.3 shall be conditioned  upon such Holder's  participation in such
underwriting  and the inclusion of such Holder's  Registrable  Securities in the
underwriting to the extent provided herein.  All Holders proposing to distribute
their  Registrable  Securities  through  such  underwriting  shall enter into an
underwriting  agreement  in  customary  form with the  managing  underwriter  or
underwriter(s)  selected  for  such  underwriting.   Notwithstanding  any  other
provision of this Agreement, if the managing underwriter(s) determine(s) in good
faith that marketing  factors require a limitation of the number of shares to be
underwritten,  then the managing  underwriter(s)  may exclude shares  (including
Registrable  Securities)  from the registration  and the  underwriting,  and the
number of shares that may be included in the  registration  and the underwriting
shall be allocated, first, to the Corporation, second, to each of the Holders of
Registrable  Securities requesting inclusion of their Registrable  Securities in
such registration statement and to holders of Other Registrable  Securities,  to
be  allocated  among such  persons  pro rata based on the amount of  Registrable
Securities  and Other  Registrable  Securities  (calculated  on an  As-Converted
Basis) owned by each person and third, to any other holders of the Corporation's
securities;  provided,  that  notwithstanding  anything in the  foregoing to the
contrary,  the rights of the  Holders  of  Registrable  Securities  to have such
Registrable Securities included in any such registration shall be subordinate to
the  rights of the  holders  of Series A  Placement  Securities  and of Series B
Placement  Securities.  If any  Holder  disapproves  of the  terms  of any  such
underwriting,  such Holder may elect to withdraw  therefrom by written notice to
the  Corporation  and  the  managing  underwriter.  Any  Registrable  Securities
excluded or withdrawn  from such  underwriting  shall be excluded and  withdrawn
from the registration. For any Holder which is a partnership or corporation, the
partners,  retired partners and stockholders of such Holder,  or the estates and
family members of any such partners and retired  partners and any trusts for the
benefit of any of the foregoing persons shall be deemed to be a single "Holder,"
and any pro rata reduction with respect to such "Holder" shall be based upon the
aggregate  amount of shares carrying  registration  rights owned by all entities
and individuals included in such "Holder," as defined in this sentence.

     1.4.  Expenses  of  Registration.  All  Registration  Expenses  incurred in
connection  with one  demand  registration  (pursuant  to  Section  1.2) and all
piggyback  registrations  (pursuant  to  Section  1.3)  shall  be  borne  by the
Corporation,  and all  Selling  Expenses  shall be borne by the  Holders  of the
securities so registered  pro rata on the basis of the number of their shares so
registered.

     1.5.  Obligations  of the  Corporation.  Whenever  required  to effect  the
registration of any Registrable Securities under this Agreement, the Corporation
shall, as expeditiously as reasonably possible:

         (a) Prepare and file with the SEC a registration statement with respect
to  such  Registrable  Securities  and  use  its  best  efforts  to  cause  such
registration statement to become effective, and keep such registration statement
effective  and  the  related   prospectus  current  until

<PAGE>
                                      -7-


the  distribution is completed,  but not more than 180 days,  provided that such
180-day  period  shall be extended  for a period of time equal to the period the
Holder  refrains  from  selling  any  Registrable  Securities  included  in such
registration statement due to circumstances described in Section 1.5(f).

         (b) Prepare and file with the SEC such  amendments  and  supplements to
such  registration  statement and the  prospectus  used in connection  with such
registration  statement as may be necessary to comply with the provisions of the
Securities Act with respect to the disposition of all securities covered by such
registration statement.

         (c)  Furnish  to the  Holders  such  number of copies of a  prospectus,
including a preliminary  prospectus,  in conformity with the requirements of the
Securities  Act, and all  amendments  and  supplements  thereto,  and such other
documents as they may reasonably  request in order to facilitate the disposition
of  the  Registrable  Securities  owned  by  them  that  are  included  in  such
registration.

         (d) Use its best efforts to register and qualify the securities covered
by such  registration  statement under such other securities or Blue Sky laws of
such  jurisdictions as shall be reasonably  requested by the Holders,  provided,
however,  that the Corporation shall not be required in connection  therewith or
as a condition thereto to qualify to do business or to file a general consent to
service of process in any such states or jurisdictions unless the Corporation is
already subject to service in such jurisdiction and except as may be required by
the Securities Act or applicable rules or regulations thereunder.

         (e) In the event of any underwritten  public  offering,  enter into and
perform its obligations under an underwriting  agreement, in usual and customary
form,  with  the  managing   underwriter(s)   of  such  offering.   Each  Holder
participating  in such  underwriting  shall  also  enter  into and  perform  its
obligations under such an agreement.

         (f)  Notify  each  Holder of  Registrable  Securities  covered  by such
registration  statement  at any  time  when a  prospectus  relating  thereto  is
required  to  be  delivered  under  the  Securities  Act  if  such  registration
statement, as then in effect, includes an untrue statement of a material fact or
omits to state a material  fact  required to be stated  therein or  necessary to
make the  statements  therein not  misleading in the light of the  circumstances
then existing and, following such notification,  promptly deliver to each Holder
copies of all amendments or supplements referred to in paragraphs (b) and (c) of
this Section 1.5.

         (g)  Furnish,  at the  request  of any Holder  registering  Registrable
Securities,  on the date that such  Registrable  Securities are delivered to the
underwriters  for sale, if such securities are being sold through  underwriters,
or on the date  that  the  registration  statement  becomes  effective,  if such
securities are not being sold through underwriters,  (i) an opinion, dated as of
such date, of the counsel  representing the Corporation for the purposes of such
registration,  in form and substance as is customarily  given to underwriters in
an underwritten  public offering  addressed to the underwriters,  if any, and if
there are no underwriters, to the Holders requesting registration of Registrable
Securities  and  (ii) a  "comfort"  letter  dated  as of  such  date,  from  the
independent  certified  public  accountants  of the  Corporation,  in  form  and
substance as is customarily given by independent certified public accountants to
underwriters in an underwritten public offering and reasonably satisfactory to a
majority in interest of the

<PAGE>
                                      -8-


Holders requesting registration,  addressed to the underwriters,  if any, and if
there are no underwriters, to the Holders requesting registration of Registrable
Securities.

         (h) Use its best efforts to list the Registrable  Securities covered by
such  registration   statement  with  any  securities  exchange  or  interdealer
quotation system on which the Common Stock is then listed or quoted.

         (i)  Make  available  for  inspection  by each  seller  of  Registrable
Securities,  any underwriter  participating in any distribution pursuant to such
registration statement, and any attorney,  accountant or other agent retained by
such seller or  underwriter  (an  "Advisor"),  all financial and other  records,
pertinent corporate  documents and properties of the Corporation,  and cause the
Corporation's  officers,  directors  and  employees  to supply  all  information
reasonably requested by any such seller,  underwriter,  attorney,  accountant or
agent in connection with such registration statement. Such seller will keep, and
will  cause its  Advisors  to keep,  such  information  confidential  subject to
Section 3.14.

     1.6.  Furnish  Information.  It  shall  be a  condition  precedent  to  the
obligations of the  Corporation to take any action  pursuant to Sections 1.2 and
1.3 that the selling Holders shall furnish to the Corporation  such  information
regarding themselves,  the Registrable Securities held by them, and the intended
method of disposition  of such  securities as shall be required to timely effect
the registration of Registrable Securities.

     1.7. Indemnification.  In the event any Registrable Securities are included
in a registration statement under Sections 1.2 or 1.3:

         (a) By the Corporation. To the extent permitted by law, the Corporation
will indemnify and hold harmless each Holder,  the partners,  members,  officers
and directors of each Holder, any underwriter (as defined in the Securities Act)
for such Holder and each person, if any, who controls such Holder or underwriter
within the meaning of the Securities Act against any losses, claims, damages, or
liabilities  (joint or  several)  to which  they may  become  subject  under the
Securities Act, the Exchange Act or other federal or state law,  insofar as such
losses,  claims,  damages,  or liabilities (or actions in respect thereof) arise
out  of or  are  based  upon  any  of the  following  statements,  omissions  or
violations (collectively a "Violation"):

               (i)  any  untrue  statement  or  alleged  untrue  statement  of a
material  fact  contained or  incorporated  by  reference  in such  registration
statement,  including any preliminary  prospectus or final prospectus  contained
therein or any amendments or supplements thereto;

               (ii) the omission or alleged omission to state therein a material
fact required to be stated therein,  or necessary to make the statements therein
not misleading, or

               (iii) any violation or alleged  violation by the  Corporation  of
the Securities Act, the Exchange Act, any federal or state securities law or any
rule or regulation promulgated under the Securities Act, the Exchange Act or any
federal or state  securities law in connection with the offering covered by such
registration  statement;  and the  Corporation  will reimburse each such Holder,
partner, member, officer,or director,  underwriter or controlling person for any
legal or other expenses reasonably incurred by them, as incurred,  in connection
with  investigating  or defending  any such loss,  claim,  damage,  liability or
action;  provided,  however,  that the  indemnity  agreement  contained  in this
subsection  shall not apply to  amounts

<PAGE>

                                      -9-


paid in settlement of any such loss, claim, damage,  liability or action if such
settlement is effected  without the consent of the  Corporation  (which  consent
shall not be unreasonably withheld),  nor shall the Corporation be liable in any
such case for any such loss,  claim,  damage,  liability or action to the extent
that it arises out of or is based upon a Violation which occurs in reliance upon
and in conformity with written information and expressly stated to be for use in
connection with such  registration  by such Holder,  partner,  member,  officer,
director, underwriter or controlling person of such Holder.

         (b) By Selling  Holders.  To the extent  permitted by law, each selling
Holder will,  severally and not jointly, if Registrable  Securities held by such
Holder are included in the  securities  as to which such  registration  is being
effected,  indemnify and hold harmless the  Corporation,  each of its directors,
each of its officers who have signed the registration statement, each person, if
any, who controls the Corporation  within the meaning of the Securities Act, any
underwriter  (as defined in the  Securities  Act) and any other  Holder  selling
securities  under such  registration  statement  or any of such  other  Holder's
partners,  members,  directors  or  officers  or any  person who  controls  such
underwriter  or other  Holder  within the meaning of the  Securities  Act or the
Exchange  Act,  against any losses,  claims,  damages or  liabilities  (joint or
several) to which the  Corporation  or any such director,  officer,  controlling
person,  underwriter  or other  such  Holder,  or a member,  partner,  director,
officer or  controlling  person of such  underwriter  or other Holder may become
subject  under the  Securities  Act,  the  Exchange  Act,  any  federal or state
securities law or any rule or regulation  promulgated  under the Securities Act,
the Exchange Act or any federal or state  securities law in connection  with the
offering covered by such registration statement, insofar as such losses, claims,
damages or liabilities (or actions in respect thereto) arise out of or are based
upon any  Violation,  in each case to the extent (and only to the  extent)  that
such  Violation   occurs  in  reliance  upon  and  in  conformity  with  written
information  furnished  by such Holder by an  instrument  duly  executed by such
Holder and stated to be specifically for use in such registration; and each such
Holder will  reimburse any legal or other  expenses  reasonably  incurred by the
Corporation or any such director,  officer,  controlling person,  underwriter or
other Holder, partner,  member, officer,  director or controlling person of such
other Holder or underwriter in connection  with  investigating  or defending any
such loss,  claim,  damage,  liability or action;  provided,  however,  that the
indemnity agreement contained in this subsection shall not apply to amounts paid
in  settlement  of any such loss,  claim,  damage,  liability  or action if such
settlement  is effected  without the consent of the Holder,  which consent shall
not be  unreasonably  withheld;  and provided  further,  that the total  amounts
payable in indemnity  by a Holder  under this  Section  1.7(b) in respect of any
Violation  shall not  exceed the net  proceeds  received  by such  Holder in the
registered offering out of which such Violation arises.

         (c) Notice. Promptly after receipt by an indemnified party of notice of
the  commencement  of any  action  (including  any  governmental  action),  such
indemnified  party will, if a claim in respect thereof is to be made against any
indemnifying  party under this Section 1.7, deliver to the indemnifying  party a
written notice of the commencement thereof and the indemnifying party shall have
the right to  participate  in,  and,  to the  extent the  indemnifying  party so
desires,  jointly with any other indemnifying party similarly noticed, to assume
the defense thereof with counsel mutually satisfactory to the parties; provided,
however,  that an  indemnified  party  shall  have the right to  retain  its own
counsel, with the fees and expenses to be paid by the indemnifying party, if the
defendants include both the indemnifying party and the indemnified party and the
indemnified  party shall have reasonably  concluded that there may be reasonable

<PAGE>
                                      -10-


defenses  available  to it  which  are  different  from or  additional  to those
available to the indemnifying party or if the interests of the indemnified party
reasonably  may be deemed to conflict  with the  interests  of the  indemnifying
party. The failure to deliver written notice to the indemnifying  party within a
reasonable  time  of  the  commencement  of  any  such  action,   if  materially
prejudicial   to  its  ability  to  defend  such  action,   shall  relieve  such
indemnifying  party of any liability to the indemnified party under this Section
1.7, but the omission so to deliver  written  notice to the  indemnifying  party
will not relieve it of any liability that it may have to any  indemnified  party
otherwise than under Section 1.7.

         (d) Contribution.  If the indemnification  provided for in this Section
1.7 is unavailable to a party entitled to indemnification, then the indemnifying
party shall contribute to the aggregate losses,  claims,  damages or liabilities
of the indemnified  party as is appropriate to reflect the relative fault of the
indemnified  party and the  indemnifying  party,  as well as any other  relevant
equitable  considerations.  The  relative  fault of the  indemnifying  party and
indemnified  party shall be  determined  by reference  to,  among other  things,
whether any action in question, including any untrue or alleged untrue statement
of a material fact or omission or alleged omission to state a material fact, has
been made by, or relates to information  supplied by, such indemnifying party or
indemnified  party,  and the  parties'  relative  intent,  knowledge,  access to
information  and  opportunity  to  correct  or prevent  such  action;  provided,
however,  that, in any such case,  (1) no Holder shall be required to contribute
any amount in excess of the public offering price of all Registrable  Securities
offered and sold by such Holder pursuant to such registration statement; and (2)
no person guilty of fraudulent  misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to  contribution  from any person
who was not guilty of such fraudulent misrepresentation.

         (e) Survival. The obligations of the Corporation and Holders under this
Section  1.7  shall  survive  the  completion  of any  offering  of  Registrable
Securities in a registration statement.

     1.8. Limitations on Subsequent Registration Rights. From and after the date
of this  Agreement,  so  long as any  Registrable  Securities  are  outstanding,
without the consent of the Holders of a majority of the Registrable  Securities,
the  Corporation  shall  not  enter  into  any  agreement  with  any  holder  or
prospective  holder of any securities of the  Corporation  that would allow such
holder  or  prospective  holder  (a)  to  make  a  demand  registration  to  the
Corporation  at any point in time when  holders of  Registrable  Securities  are
entitled to request  registration under Section 1.2, or (b) to have registration
rights  superior to, or which limit in any way (including by reducing the number
of Registrable Securities that may be included in an underwritten offering), the
registration rights of the Holders granted hereby.

2. LEGENDS. The Investors understand that the share certificates  evidencing any
Registrable Securities shall be endorsed with the following legends (in addition
to any legends required under applicable state securities laws):

THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933. THEY
MAY NOT BE SOLD,  OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN
EFFECTIVE  REGISTRATION  STATEMENT  UNDER  SAID  ACT OR AN  OPINION  OF  COUNSEL
SATISFACTORY TO THE CORPORATION THAT SUCH REGISTRATION IS NOT REQUIRED.


<PAGE>
                                      -11-


3.       MISCELLANEOUS.

         3.1.  Successors and Assigns.  Except as otherwise  expressly  provided
herein, the terms and conditions of this Agreement shall inure to the benefit of
and be binding upon the  respective  successors  and permitted  transferees  and
permitted assigns of the parties.

         3.2. Governing Law. This Agreement shall be governed in all respects by
the  laws of the  State  of New  York as  applied  to  contracts  made and to be
performed entirely within that state between residents of that state.

         3.3.  Counterparts.  This  Agreement  may be  executed in any number of
counterparts,  each of  which  shall be  deemed  an  original,  and all of which
together shall constitute one instrument.

         3.4.   Titles  and   Subtitles.   The  titles  of  the  paragraphs  and
subparagraphs  of this Agreement are used for convenience only and are not to be
considered in construing or interpreting this Agreement.

         3.5.  Stock Splits,  etc. All share numbers used in this  Agreement are
subject to  adjustment  in the case of any stock  split,  reverse  stock  split,
combination or similar events.

         3.6.  Notices.  Any notice required or permitted to be given to a party
pursuant to the  provisions of this  Agreement  shall be in writing and shall be
effective  on (a) the date of  delivery  in person,  or the date of  delivery by
facsimile with confirmation  receipt,  (b) the business day after deposit with a
nationally-recognized courier or overnight service, for United States deliveries
or (c) five (5)  business  days  after  deposit  in the  United  States  mail by
registered  or  certified  mail for United  States  deliveries.  All notices not
delivered personally or by facsimile will be sent with postage and other charges
prepaid and  properly  addressed  to the party to be notified at the address set
forth below such party's signature on this Agreement or at such other address as
such party may  designate by ten (10) days advance  written  notice to the other
parties hereto.  All notices for delivery outside the United States will be sent
by facsimile,  or by nationally  recognized  courier or overnight  service.  Any
notice  given  hereunder  to more  than one  person  will be deemed to have been
given, for purposes of counting time periods hereunder, on the date given to the
last party required to be given such notice.  Notices to the Corporation will be
marked  to the  attention  of the  President,  with a copy to  Keith  Moskowitz,
Ehrenreich,  Eilenberg & Krause LLP, 11 East 44th Street,  17th Floor, New York,
NY 10017.  Notices shall be sent to the addresses on the signature pages hereto,
or such other addresses as a party may provide to the other parties from time to
time.

         3.7. Attorneys' Fees. If any action at law or in equity is necessary to
enforce or interpret the terms of this Agreement,  the prevailing party shall be
entitled to reasonable  attorneys'  fees,  costs and necessary  disbursements in
addition to any other relief to which such party may be entitled.

         3.8. Amendments and Waivers.  Any term of this Agreement may be amended
and the observance of any term of this Agreement may be waived (either generally
or in a particular  instance and either  retroactively or  prospectively),  only
with the written consent of the party against whom enforcement of such amendment
or waiver is sought;  provided,  however that with respect to any Investor,  the
consent of the holders of more than sixty-six and two-thirds percent

<PAGE>
                                      -12-


(662/3%) of the Registrable Securities (other than the Broker Warrants) shall be
sufficient to bind any and all Investors.

         3.9.  Severability.  If any  provision of this  Agreement is held to be
unenforceable  under  applicable law, then such provision shall be excluded from
this Agreement and the balance of the Agreement  shall be interpreted as if such
provision was so excluded and shall be enforceable in accordance with its terms.

         3.10. Entire Agreement.  This Agreement and the Subscription Agreements
constitute the full and entire  understanding  and agreement between the parties
with respect to the subject matter hereof and supersede all prior  negotiations,
correspondence,  agreements,  understandings,  duties or  obligations  among the
parties with respect to the subject matter hereof.

         3.11.  Further  Assurances.  From and after the date of this Agreement,
upon the request of a party,  the other  parties  shall execute and deliver such
instruments,  documents  or other  writings as may be  reasonably  necessary  or
desirable  to  confirm  and carry out and to  effectuate  fully the  intent  and
purposes of this Agreement.

         3.12.  Assignment.  Rights  under this  Agreement  may be  assigned in
connection  with any transfer or assignment of Registrable  Securities  provided
that: (a) such transfer may otherwise be effected in accordance  with applicable
securities laws, and (b) such other party agrees in writing with the Corporation
to be bound by all of the provisions of this Agreement to the same extent as the
transferor.

         3.13. Changes in Stock. If, and as often as, there is any change in the
Common  Stock or Series C Preferred  by way of a stock  split,  stock  dividend,
combination   or   reclassification,   or   through  a  merger,   consolidation,
reorganization  or  recapitalization,   or  by  any  other  means,   appropriate
adjustment  shall be made to the  provisions  hereof so that the rights  granted
hereby shall  continue with respect to the Common Stock or Series C Preferred as
so changed.

         3.14. Confidentiality.  Information related to the terms and conditions
of the  Offering,  as  well as all  information  contained  in the  Subscription
Agreement  (except  information  relating solely to an Investor) and instruments
and agreements delivered in connection  therewith,  shall be deemed confidential
and shall not be disclosed  by the Investor to any person  unless and until such
information  becomes generally  available to the public other than by disclosure
in violation of this Agreement.  All other  information that has been designated
by the Corporation as "confidential"  shall likewise be deemed  confidential and
not  disclosed  by the  Investor  to any person  unless and until such (i) is or
becomes generally  available to the public other than by disclosure in violation
of this Agreement,  (ii) was properly within such Investor's possession prior to
its being  furnished  by the  Corporation  to such  Investor,  or (iii)  becomes
available to such  Investor  through  disclosure  by third  parties who have the
right to disclose such information.



<PAGE>

                            INVESTOR RIGHTS AGREEMENT
                                SIGNATURE PAGE 1



IN WITNESS  WHEREOF,  the parties  hereto have  executed  this  Investor  Rights
Agreement as of the date first above written.

                                    LIFE MEDICAL SCIENCES, INC.



                                    By:
                                       -----------------------------------------
                                       Robert Hickey
                                       Chairman, President and CEO

                                    Address:



                                      -i-

<PAGE>


                            INVESTOR RIGHTS AGREEMENT
                                SIGNATURE PAGE 2





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                                      -ii-

<PAGE>



                            INVESTOR RIGHTS AGREEMENT
                                SIGNATURE PAGE 3





By:
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   Name:
   Title:
   Address




By:
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   Name:
   Title:
   Address




By:
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By:
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<PAGE>

                        Confidential Offering Supplement
                        --------------------------------

                                 March 21, 2003

                          ----------------------------

                             Series C Unit Offering
                                       of
                           Life Medical Sciences, Inc.
                          -----------------------------



         This Offering Supplement amends and supplements the Securities Purchase
Agreement (the "Purchase Agreement"), a form of which has been distributed by
Life Medical Sciences, Inc. (the "Company"), in connection with an offering of
up to 550,000 units ("Units"), each Unit comprised of (i) one share of Series C
Convertible Preferred Stock, (ii) one warrant exercisable for two years from the
original issue date to purchase up to ten (10) shares of Common Stock at an
exercise price of $0.12 per share and (iii) one warrant exercisable until June
30, 2003 to purchase up to 10 shares of Common Stock at an exercise price of
$0.12 per share, such Units to be offered and sold at a price of $1.20 per Unit,
resulting in maximum gross proceeds of $660,000 (the "Series C Financing").

         Each of the items referred to below shall be deemed to modify the
representations and warranties of the Company contained in, and other terms and
conditions of, the Purchase Agreement and related transaction documents to the
extent relevant. Acceptance by investors of certificates evidencing the
securities purchased in the Series C Financing shall be deemed approval by the
investors of this Offering Supplement.

Recent Developments
-------------------


         1.       On March 21, 2003, each share of then outstanding Series B
                  Convertible Preferred Stock of the Company automatically
                  converted by its terms into 10 shares of common stock of the
                  Company, resulting in the issuance of an aggregate of
                  11,125,000 shares of common stock.

         2.       On March 18, 2003, the Company consummated the purchase of
                  certain polymer related assets of Phairson Medial Limited and
                  Phairson Medical Inc. in exchange for the issuance of
                  6,895,561 shares of restricted common stock of the Company. In
                  connection with the acquisition, the Company granted an
                  option, exercisable for 7 years, to purchase up to 100,000
                  shares of the Company's common stock at $.09 per share to Dr.
                  Gere S. diZerega, who has served as a medical consultant to
                  Phairson and the Company and who assisted in identifying the
                  acquisition opportunity.

<PAGE>

         3.       Effective March 1, 2003, the Company hired Dr. Eli Pines to
                  serve as the Company's Vice President of Research and Chief
                  Scientific Officer. Dr. Pines had previously served in that
                  capacity for five years until July 2000, after which he
                  continued his relationship in a consulting capacity. The
                  Company entered into an employment agreement with Dr. Pines,
                  pursuant to which Dr. Pines currently receives an annual base
                  salary of $180,000 subject to adjustments for cost-of-living
                  increases and other increases as determined by the Board. The
                  term of Dr. Pines' employment agreement is for a period of
                  three years and is automatically renewed on an annual basis
                  absent three months prior written notice. The Company also
                  extended the provisions of Dr. Pines' prior indemnification
                  agreement to cover the present employment as well.


Over-allotment Option
---------------------

The Company has granted an over-allotment option, exercisable at any time until
5:00 p.m. on April 10, 2003, in favor of the placement agent for the Series C
Financing, Clubb BioCapital Limited, to solicit qualified investors to purchase
up to an additional 55,000 Units in the Series C Financing; it being understood
that if the full over-allotment option is exercised, an additional $66,000 in
gross proceeds would be received by the Company in the Series C Financing; it
being further understood that Clubb BioCapital Limited is entitled to
compensation with respect to Units placed in the over-allotment option as and to
the same extent provided for with respect to Units otherwise placed by it in the
Series C Financing.


Broker Warrant Correction
-------------------------

The Purchase Agreement inaccurately describes the number of shares of common
stock underlying a broker warrant that comprises part of Clubb BioCapital
Limited's compensation in connection with the Series C Financing. Consistent
with an agency agreement executed by the Company and Clubb BioCapital Limited in
January 2003, the number of shares of common stock underlying the broker warrant
shall be equal to 10% of the aggregate number of shares of common stock issuable
upon conversion of the shares of Series C Convertible Preferred Stock sold to
investors secured by Clubb BioCapital Limited.

<PAGE>

Schedule 4.05(b)
Life Medical Sciences, Inc.
Options, Warrants and Other Convertible Instruments


<TABLE>
<CAPTION>
                                                                                  Equivalent Shares
                                                      Exercise Price                 Common Stock
                                                      --------------                 ------------
<S>                                                   <C>                         <C>
Stock Options (see attached ledger)                       Various                         9,360,493
Series B Preferred Stock                                   $0.12                         11,125,000
Series B Warrants                                          $0.24                         11,125,000
Broker Warrants                                            $0.24                            916,670
Convertible Promissory Note - Polymer Technology
Group, Inc.                                                $1.00                             70,000
Convertible Promissory Note - Dimotech,                    $1.00
Ltd.                                                                                         40,000
                                                                                         ----------
TOTAL                                                                                    32,637,163
</TABLE>





<PAGE>

Schedule 4.05(e)
Life Medical Sciences, Inc.
Plans and Agreements Providing for Acceleration or Other Changes in the Vesting
Provisions or Other Terms of such Securities, as the Result of Any Merger, Sale
of Stock or Assets, Change of Control or Other Similar Transaction by Life
Medical Sciences, Inc.:

1992 Stock Option Plan

2000 Non-Qualified Stock Option Plan

2001 Non-Qualified Stock Option Plan

Stock Options Issued Under Other Agreements

Certificate of Designations, Rights and Preferences of Series B Convertible
Preferred Stock

Series B Warrants

Series B Broker Warrants

Convertible Promissory Note--Polymer Technology Group, Inc.

Convertible Promissory Note--Dimotech, Ltd.





<PAGE>


CONFIDENTIAL
------------

Schedule 4.10(a)
Life Medical Sciences, Inc.
Patents, Trademarks and Copyrights

INFORMATION OMITTED




<PAGE>