Document:

THE PROJECT GROUP, INC.

                  CERTIFICATE OF DESIGNATIONS, PREFERENCES AND
                     RIGHTS AND NUMBER OF SHARES OF SERIES B
                          4% REDEEMABLE PREFERRED STOCK

                           Pursuant to Section of the
                  [Business Corporation Law] of State of Nevada

         The undersigned President and Secretary, respectively, of THE PROJECT
GROUP, INC., a Nevada corporation (the "Corporation") certify that pursuant to
authority granted to and vested in the Board of Directors of the corporation by
the provisions of the Certificate of Incorporation and in accordance with the
provisions of Section ______of the [Business Corporation Law] of the State of
Nevada, its Board of Directors has duly adopted the following resolutions
creating the Series B 4% Redeemable Preferred Stock:

         RESOLVED, that pursuant to the authority vested in the Board of
Directors of the corporation by the Corporation's Certificate of Incorporation,
a series of preferred stock of the corporation be, and it hereby is, created out
of the 5,00,000 shares of authorized preferred stock, par value $.001 per share,
of which 2,500,000 shares are available for issuance as of the date hereof, such
series to be designated Series B 4% Redeemable Preferred Stock (the "Series B
Preferred Stock" or "Series B Stock"), to consist of 1,500 shares of which the
preferences and relative and other rights, and the qualifications, limitations
or restrictions thereof are as follows:

         (1)      Certain Definitions

         Unless the context otherwise requires, the terms defined in this
paragraph 1 shall have, for all purposes of this resolution, the meanings herein
specified.

         Common Stock. The term "Common Stock" shall mean all shares now or
hereafter authorized of any class of Common Stock, par value $.001 per share of
the Corporation, and any other stock of the Corporation, howsoever designated,
authorized after the Issue Date, which has the right (subject always to prior
rights of any class or series of preferred stock) to participate in the
distribution of the assets and earnings of the Corporation without limit as to
per share amount.

         Conversion Date. The term "Conversion Date" shall have the meaning set
forth in subparagraph 4(d) below.

         Conversion Rate. The term "Conversion Rate" shall mean the formula to
determine the number of shares of Common Stock deliverable upon conversion of a
share of the Series B Preferred Stock as set forth in paragraph 4 hereof.

         Conversion Shares. The shares of Common Stock issued or issuable to the
holders of the Series B Preferred Stock upon conversion thereof in accordance
with the terms hereof.

         Dividend Date. The term "Dividend Date" shall mean March 31, June 30,
September 30 and December 31 of each year that any share of the Series B
Preferred Stock is outstanding, commencing on March 31, 2004.

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         Issue Date. The term "Issue Date" shall mean the date that shares of
Series B Preferred Stock are first issued by the Corporation.

         Issue Price The term "Issue Price" means $1000.00 per share.

         Junior Stock. The term "Junior Stock" shall mean any class or series of
capital stock of the Corporation, including the Common Stock, ranking junior to
the Series B Preferred Stock in respect of the right to receive dividends, and
for the purposes of paragraph below, any class or series of capital stock of the
Corporation, including the Common Stock, ranking junior to the Series B
Preferred Stock in respect of the right to receive assets upon the liquidation,
dissolution or winding up of the affairs of the Corporation.

         Liquidation Price.   $1000.00 per Share.

         Record Date. The term "Record Date" means the date set by the Board of
Directors to determine the stockholders of the Corporation entitled to attend
and vote at any meeting of stockholders or upon written consent.

         Redemption Date. The term "Redemption Date" shall mean 5:00 pm New York
time on any date set by the Corporation for redemption of all or a part of the
Series B Preferred Stock.

         Redemption Price. The term "Redemption Price" shall mean $1,200.00 per
share of Series B Preferred Stock plus all accrued and unpaid dividends.

         Senior Stock. The term "Senior Stock" shall mean any class or series of
stock of the Corporation ranking senior to the Series B Preferred Stock in
respect of the right to receive dividends and, for the purposes of paragraph 3
below, any class or series of stock of the Corporation issued after the Issue
Date ranking senior to the Series B Preferred Stock in respect of the right to
receive assets upon the liquidation, dissolution or winding up of the affairs of
the Corporation.

         Subsidiary. The term "Subsidiary" shall mean any Corporation of which
shares of stock possessing at least a majority of the general voting power in
electing the board of directors are, at the time as of which any determination
is being made, owned by the Corporation, whether directly or indirectly through
one or more Subsidiaries.

         (2)      Dividends

                  Each share of Series B Preferred Stock shall be entitled to
receive quarterly cumulative annual dividends of 4% ($40.00 per annum based upon
the Issue Price) per share which will accrue from the date of original issue on
the Shares and be payable, when and as declared by the Board of Directors out of
funds legally available therefor, to holders of record on the 10th business day
prior to the dividend date of December 31 and June 30 of each year. The
Corporation may, at its option, pay dividends in cash or shares of Common Stock
(the "Dividend Shares"); provided, however, any such Dividend Shares must be
subject to an effective or filed and pending registration statement with the
Securities and Exchange Commission allowing for the immediate resale under the
Securities Act of 1933, as amended (the "Act") by the holder of the Dividend
Shares . The number of Dividend Shares shall be determined by reference to the
average closing price of the Common Stock for the 10 days prior to the record
date for payment of the dividend. For

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the foreseeable future, the Corporation anticipates paying dividends in Dividend
Shares, to the extent permitted by law.

         Dividends on the Series B Preferred Stock will be junior to dividends
on any series or class of Senior Stock and if at any time any dividend on Senior
Stock is in default, the Corporation may not pay any dividend on the Series B
Preferred Stock until all accrued and unpaid dividends on the Senior Stock for
all prior periods and the current period are paid or declared and set aside for
payment. The Series B Preferred Stock will have priority as to dividends over
the Common Stock and any other series or class of the Corporation's Junior
Stock, and no dividend (other than dividends payable solely in Junior Stock) may
be paid on, and no purchase, redemption or other acquisition may be made by the
Corporation of, any Junior Stock unless all accrued and unpaid dividends on the
Series B Preferred Stock for all prior periods and the current period have been
paid or declared and set apart for payment.

         (3)      Distributions Upon Liquidation, Dissolution or Winding Up.

                  In the event of any voluntary or involuntary liquidation,
dissolution or winding up of the affairs of the Corporation, subject to the
prior preferences and other rights of any Senior Stock, but before any
distribution or payment shall be made to the holders of Junior Stock, the
holders of the Series B Preferred Stock shall be entitled to be paid $1000.00
per share, plus accumulated unpaid dividends. If such payment shall have been
made in full to the holders of the Series B Preferred Stock, and if payment
shall have been made in full to the holders of any Senior Stock of all amounts
to which such holders shall be entitled, the remaining assets and funds of the
Corporation shall be distributed among the holders of Junior Stock, according to
their respective shares and priorities. If, upon any such liquidation,
dissolution or other winding up of the affairs of the Corporation, the net
assets of the Corporation distributable among the holders of all outstanding
shares of the Series B Preferred Stock shall be insufficient to permit the
payment in full to such holders of the preferential amounts to which they are
entitled, then the entire net assets of the Corporation remaining after the
distributions to holders of any Senior Stock of the full amounts to which they
may be entitled shall be distributed among the holders of the Series B Preferred
Stock ratably in proportion to the full amounts to which they would otherwise be
respectively entitled. Neither the consolidation or merger of the Corporation
into or with another Corporation, Corporations, entity or other entities, nor
the sale of all or substantially all of the assets of the Corporation shall be
deemed a 1iquidation, dissolution or winding up of the affairs of the
Corporation within the meaning of this paragraph 3. Notwithstanding anything
herein to the contrary, while any shares of Series B Preferred Stock are
outstanding, the Corporation shall not establish any Senior Stock without the
prior affirmative vote of a majority of the shares of Series B Preferred
Stockholders.

         (4)      Redemption; Conversion Rights

         (a) Redemption. The Series B Stock shall be subject to redemption at
the option of the Corporation at any time after the Issue Date provided (i)
there is an effective registration statement providing for the resale under the
Act of the Conversion Shares, and (ii) holders of Series B Stock receive 20 days
prior notice of the redemption, during which 20 day period they may convert the
shares. The redemption price shall equal the Redemption Price. In the event of
redemption, all Series B Preferred Stock outstanding after the Redemption Date
shall represent solely the right to receive the Redemption Price, and all rights
as a holder of Series B Preferred Stock shall terminate.

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<PAGE>

         (b) Conversion Rights. (i) Unless redeemed, the Series B Shares are
convertible at any time at the option of the Holder from the date of issue until
the redemption date. For each shares of Series B Stock converted, the number of
shares of Common Stock ("Conversion Shares") to be received shall be 7,150
shares of Common Stock ("Conversion Rate"), subject to certain adjustments in
the event of stock splits, reorganizations and similar transactions as provided
herein.

                  (ii) The Series B Stock shall automatically convert into
shares of Common Stock at the then applicable Conversion Rate in the event that
the Corporation's Common Stock has a closing sales price in excess of $0.60 per
share for the 20 consecutive trading days prior to the date of written notice by
the Corporation under this clause (ii) to the holders of the Series B Stock.

         (c) Mechanics of Conversion. The holder of any shares of Series B
Preferred Stock may exercise the conversion right specified above by
surrendering to the Corporation or any transfer agent of the Corporation the
certificate or certificates for the shares to be converted, accompanied by
Conversion Notice specifying the number of shares to be converted; provided that
the Corporation shall not be obligated to issue to any such holder certificates
evidencing the shares of Common Stock issuable upon such conversion unless
certificates evidencing the shares of Series B Preferred Stock are either
delivered to the Corporation or any transfer agent of the Corporation.
Conversion of the shares of Series B Preferred Stock may be exercised in whole
or in part by the holder by faxing an executed and completed notice of
conversion to the Corporation and delivering the original notice of conversion
and the certificate representing the shares of Series B Preferred Stock being
converted to the Corporation by express courier within three (3) business days
of exercise. Conversion under either clauses (b)(i) or (ii) shall be deemed to
have been effected on the date when delivery of the Conversion Notice and
certificates for shares to be converted are delivered to the Corporation and
such date is referred to herein as the "Conversion Date". Subject to the
provisions of subparagraph 4(e)(iv), as promptly as practicable thereafter, the
Corporation shall issue and deliver to or upon the written order of such holder
a certificate or certificates for the number of full shares of Common Stock to
which such holder is entitled. Subject to the provisions of subparagraph
4(e)(iv), the person in whose name the certificate or certificates for Common
Stock are to be issued shall be deemed to have become a holder of record of such
Common Stock on the applicable Conversion Date. Upon conversion of only a
portion of the number of shares covered by a certificate representing shares of
Series B Preferred Stock surrendered for conversion, the Corporation shall issue
and deliver to or upon the written order of the holder of the certificate so
surrendered for conversion, at the expense of the Corporation, a new certificate
covering the number of shares of Series B Preferred Stock representing the
unconverted portion of the certificate so surrendered.

         (d) Fractional Shares. No fractional shares of Common Stock or scrip
shall be issued upon conversion of shares of Series B Preferred Stock. If more
than one share of Series B Preferred Stock shall be surrendered for conversion
at any one time by the same holder, the number of full shares of Common stock
issuable upon conversion thereof shall be computed on the basis of the aggregate
number of shares of Series B Preferred Stock so surrendered. Instead of any
fractional shares of Common Stock which would otherwise be issuable upon
conversion of any shares of Series B Preferred Stock, the number of shares
issuable upon conversion will be rounded up to the nearest whole share.

         (e) Conversion Rate Adjustments. The Conversion Rate shall be subject
to adjustment from time to time as follows:

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<PAGE>

                  (i) Stock Dividends, Subdivisions, Reclassifications or
Combinations. If the Corporation shall (A) declare a dividend or make a
distribution on its Common Stock in shares of its Common Stock, (B) subdivide or
reclassify the outstanding shares of Common Stock into a greater number of
shares, or (C) combine or reclassify the outstanding Common Stock into a smaller
number of shares, the Conversion Rate in effect at the time of the record date
for such dividend or distribution or the effective date of such subdivision,
combination or reclassification shall be proportionately adjusted so that the
holder of any shares of Series B Preferred Stock surrendered for conversion
after such date shall be entitled to receive the number of shares of Common
Stock which he would have owned or been entitled to receive had such Series B
Preferred Stock been converted immediately prior to such date. Successive
adjustments in the Conversion Rate shall be made whenever any event specified
above shall occur.

                  (ii) Other Distributions. In case the Corporation shall fix a
record date for the making of a distribution to all holders of shares of its
Common Stock (A) of shares of any class other than its Common Stock or (B) of
evidence of indebtedness of the Corporation or any Subsidiary or (C) of assets
(excluding cash dividends or distributions, and dividends or distributions
referred to in the foregoing paragraph), or (D) of rights or warrants, each
holder of a share of Series B Preferred Stock shall, upon the exercise of his
right to convert after such record date, receive, in addition to the shares of
Common Stock to which he is entitled, the amount of such shares, indebtedness or
assets (or, at the option of the Corporation, the sum equal to the value thereof
at the time of distribution as determined by the Board of Directors in its sole
discretion) that would have been distributed to such holder if he had exercised
his right to convert immediately prior to the record date for such
determination.

                  (iii) Consolidation, Merger, Sale, Lease or Conveyance. In
case of any consolidation with or merger of the Corporation with or into another
Corporation, or in case of any sale, lease or conveyance to another Corporation
of the assets of the Corporation or substantially all of its assets, each share
of Series B Preferred Stock shall after the date of such consolidation, merger,
sale, lease or conveyance be convertible into the number of shares of stock or
other securities or property (including cash) to which the Common Stock issuable
(at the time of such consolidation, merger, sale, lease or conveyance) upon
conversion of such share of Series B Preferred Stock would have been entitled
upon such consolidation, merger, sale, lease or conveyance; and in any such
case, if necessary, the provisions set forth herein with respect to the rights
and interests thereafter of the holders of the shares of Series B Preferred
Stock shall be appropriately adjusted so as to be applicable, as nearly as may
reasonably be, to any shares of stock or other securities or property thereafter
deliverable on the conversion of the shares of Series B Preferred Stock.

                  (iv) Timing of Issuance of Additional Common Stock Upon
Certain Adjustments. In any case in which the provisions of this subparagraph
(e) shall require that any adjustment shall become effective immediately after a
record date for an event, the Corporation may defer until the occurrence of such
event, issuing to the holder of any share of Series B Preferred Stock converted
after such record date and before the occurrence of such event the additional
shares of Common Stock issuable upon such conversion by reason of the adjustment
required by such event over and above the shares of Common Stock issuable upon
such conversion before giving effect to such adjustment.

         (g) Prohibition on Financings/Adjustment. The Corporation shall not
issue any shares of Common Stock (or securities convertible or exchangeable into
Common Stock) with an issue price (or conversion or exercise price in the case
of convertible securities) for a period commending on the Issue Date and ending
on a date which s 90 after the date that a registration statement is declared
effective by the Sec providing for the resale under the Act by the Holders of
the Conversion Shares; provided, however, the

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<PAGE>

Corporation may (i) issue options or shares or other securities to its employees
and other eligible persons under its existing employee option plans; (ii) issue
warrants or other securities to consultants or advisors provided such securities
have an exercise or conversion price in excess of $0.14 per share and (iii) may
issue shares of Common Stock in connection with the exercise or conversion of
convertible securities outstanding on the date hereof in accordance with the
terms thereof. In the event that the Corporation issues securities in violation
of this clause (g), then Conversion Rate of the Series B Stock shall be reduced
to reflect in full the issue or conversion or exercise price of such securities.

         (h) Statement Regarding Adjustments. Whenever the Conversion Rate shall
be adjusted as provided in subparagraph 4(d) or (g), the Corporation shall
forthwith file, at the office of any transfer agent for the Series B Preferred
Stock and at the principal office of the Corporation, a statement showing in
detail the facts requiring such adjustment and the Conversion Rate that shall be
in effect after such adjustment, and the Corporation shall also cause a copy of
such statement to be sent by first class mail, postage prepaid, to each holder
of shares of Series B Preferred Stock at its address appearing on the
Corporation's records. Such copy may be included as part of a notice required to
be mailed under the provisions of subparagraph 4(h).

         (g) Notice to Holders. In the event the Corporation shall propose to
take any action of the type described in clause (e) (but only if the action
would result in an adjustment in the Conversion Rate), (ii) or (iii) of
subparagraph 4(e) or (iii) an event requiring adjustment under subparagraph
4(g), the Corporation shall give notice to each holder of shares of Series B
Preferred Stock, in the manner set forth in subparagraph 4(h), which notice
shall specify the record date, if any, with respect to any such action and the
approximate date on which such action is to take place. Such notice shall also
set forth such facts with respect thereto as shall be reasonably necessary to
indicate the effect of such action (to the extent such effect may be known at
the date of such notice) on the Conversion Price and the number, kind or class
of shares or other securities or property which shall be deliverable upon
conversion of shares of Series B Preferred Stock. In the case of any action
which would require the fixing of a record date, such notice shall be given at
least 10 days prior to the date so fixed, and in case of all other action, such
notice shall be given at least 10 days prior to the taking of such proposed
action. Failure to give such notice, or any defect therein, shall not, however,
affect the legality or validity of any such action.

         (i) Costs. The Corporation shall pay all documentary, stamp, transfer
or other transactional taxes attributable to the issuance or delivery of shares
of Common Stock upon conversion of any shares of Series B Preferred Stock;
provided that the Corporation shall not be required to pay any taxes which may
be payable in respect of any transfer involved In the issuance or delivery of
any certificate for such shares in a name other than that of the holder of the
shares of Series B Preferred Stock in respect of which such shares are being
issued.

         (j) Reservation of Shares. The Corporation shall reserve at all times
so long as any shares of Series B Preferred Stock remain outstanding, free from
preemptive rights, out of its treasury stock (if applicable) or its authorized
but unissued shares of Common Stock, or both, solely for the purpose of
effecting the conversion of the shares of Series B Preferred Stock, sufficient
shares of Common Stock to provide for the conversion of all outstanding shares
of Series B Preferred Stock.

         (k) Valid Issuance. All shares of Common Stock which may be issued upon
conversion of the shares of Series B Preferred Stock will upon issuance by the
Corporation be duly and validly issued, fully paid and nonassessable and free
from all taxes, liens and charges with respect to the issuance thereof, and

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<PAGE>

the Corporation shall take no action which will cause a contrary result
(including, without limitation, any action which would cause the Conversion
Price to be less than the par value, if any, of the Common Stock).

         (5)      Voting Rights

         The holders of record of shares of Series B Preferred Stock shall be
entitled to the following voting rights:

         (i) so long as any shares of Series B Preferred Stock shall be
outstanding and unless the consent or approval of a greater number of shares
shall then be required under the Nevada Law, without first obtaining the
approval of at least a majority of the then outstanding shares of Series B
Preferred Stock, given in person or by proxy either by written consent or at a
meeting at which the holders of such shares shall be entitled to vote separately
as a class, the Corporation shall not (A) amend, alter or repeal any provisions
of the Series B Preferred Stock, Certificate of Incorporation or Bylaws so as to
materially adversely affect any of the preferences, rights, powers or privileges
of the Series B Preferred Stock or the holders thereof, (B) create, authorize or
issue any other class or series of preferred stock on a parity with, or having
greater or preferential rights than, the Series B Preferred Stock with respect
to liquidation or dividends, (C) directly or indirectly, redeem, repurchase or
otherwise acquire for value, or set aside for payment or make available for a
sinking fund for the purchase or redemption of, any stock ranking junior to on a
parity with the Series B Preferred Stock, (D) enter into any agreement which
would prohibit or restrict the Corporation's right to pay dividends on the
Series B Preferred Stock, (E) consummate transaction which would result in a
change of control of the Corporation or a sale of all or substantially all of
the assets of the Corporation.

         (ii) so long as the Series B Preferred Stock is outstanding, the
holders of the Series B Preferred Stock shall have the right to vote, on an as
converted basis at the Conversion Rate in effect as of the record date for any
meeting of shareholders or action by written consent, together with the Common
Stock, on all matters submitted to a vote of the holders of Common Stock, voting
as a single class, including without limitation, the election of directors.

         (iii) for a period equal to the earlier of (ii) three years from the
Issue date or (ii) or the date that all of the shares of Series B Preferred
Stock have been converted or retired in their entirety, the holders of a
majority of shares of the Series B Preferred Stock shall have the right to elect
two directors to the Corporation's Board of Directors.

         (iv) as otherwise provided by the State of Nevada Corporation Law.

Holders of Series B preferred Stock shall be entitled to notice of all meetings
of shareholders, to the extent and in the same manner as the holders of the
Corporation's Common Stock..

         (6)      Exclusion of Other Rights

         Except as may otherwise be required by law, the shares of Series B
Preferred Stock shall not have any preferences or relative, participating,
optional or other special rights, other than those specifically set forth in
this Certificate of Designation (as such Certificate of Designation may be
amended from time to time) and in the Corporation's Certificate of
Incorporation.

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<PAGE>

         (7)      Headings of Subdivisions

         The headings of the various subdivisions hereof are for convenience of
reference only and shall not affect the interpretation of any of the provisions
hereof.

         (8)      Severability of Provisions

         If any right, preference or limitation of the Series B Preferred Stock
set forth in this resolution (as such resolution may be amended from time to
time) is invalid, unlawful or incapable of being enforced by reason of any rule
of law or public policy, all other rights, preferences and limitations set forth
in this resolution (as so amended) which can be given effect without the
invalid, unlawful or unenforceable right, preference or limitation shall,
nevertheless, remain in full force and effect, and no right, preference or
limitation herein set forth shall be deemed dependent upon any other such right,
preference or limitation unless so expressed herein.

         (9) Status of Reacquired Shares.

         Shares of Series B Preferred Stock which are issued and reacquired in
any manner or converted shall (upon compliance with any applicable provisions of
the laws of the State of Nevada) not be reissued as Series B Preferred Stock,
but shall have the status of authorized and unissued shares of Preferred Stock
issuable in series undesignated as to Series B and may be redesignated and
reissued.

[signature page appears next]

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<PAGE>

         IN WITNESS WHEREOF, this Certificate has been made under the seal of
the Corporation and the hands of the undersigned as of ___________ , 2004.

                                                        THE PROJECT GROUP, INC.

                                          By:   /s/ Craig Crawford
                                                --------------------------------
                                                Name:    Craig Crawford
                                                Title:   President
Attest:

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

Secretary

                                        9

<PAGE>CONSULTING AGREEMENT

      This Consulting  Agreement (the "Agreement") made as of April 1, 2001 (the
"Agreement  Date"),  by and between  Life  Medical  Sciences,  Inc.,  a Delaware
Corporation (the "Company") and Richard L. Franklin, M.D. (the "Consultant"), an
individual whose address is La Dogana, Localita Dogona, Farnese 01010 Italy.

      WHEREAS,  the  Company  desires  to utilize  the  skills,  experience  and
knowledge of the Consultant on a consulting  basis, and Consultant is willing to
make his  services  available  for the period and upon and  subject to the terms
herein provided; and

      WHEREAS,  the Consultant has previously  assisted the Company in financing
and business activities and is currently serving as a Series A designated member
of the Company's Board of Directors;

      NOW,  THEREFORE,  in  consideration of the mutual covenants and agreements
hereinafter  set forth and other good and valuable  consideration,  the receipt,
adequacy and  sufficiency of which are hereby  acknowledged,  the parties hereto
covenant and agree as follows:

      1.  Retention  of   Consultant.   Subject  to  the  terms  and  conditions
hereinafter  set forth,  the  Company  hereby  retains the  Consultant,  and the
Consultant  hereby  accepts  such  retention,  to serve as a  consultant  to the
Company. The Consultant agrees to render advisory and consulting services to the
Company in the areas of strategic planning,  business management,  fund raising,
investor  relations and other areas consistent with the Consultant's  experience
and  expertise.  Specifically,  at the  designation  of the  Company's  Board of
Directors and the election of the Company's shareholders, the Consultant agrees,
with no additional  compensation  beyond that stipulated in Section 4 herein, to
serve as a member of the Company's Board of Directors including participation on
such  committees of the Board as may be  mutually-agreed  upon by the Consultant
and the majority of the members of the Company's Board of Directors.

      2. Time Commitment:  No Conflict.  The Consultant will devote such time to
his services  under this Agreement as may reasonably be required by the Company.
The Consultant agrees to meet and advise at reasonable times and upon reasonable
prior notice, with the Company's management, agents, employees and other Company
members.  The  Consultant  will  arrange  to  perform  the  services  under this
Agreement in such a manner and at such times that the services will not conflict
with  any   other   agreement,   arrangement,   understanding,   obligation   of
confidentiality or employment  relationship.  The Consultant represents that the
execution of this Agreement and performance of the services hereunder do not and
will  not  breach  any  agreement,  arrangement,  understanding,  obligation  of
confidentiality or employment relationship to which the Consultant is a party or
by which the Consultant is bound, and during this Agreement, the Consultant will
not enter into any agreement, either written or oral, in conflict herewith.

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<PAGE>

      3. Term. The  Consultant's  retention shall commence on April 1, 2001 (the
"Retention  Date") and the initial term shall be for one year from the Retention
Date (as  extended  from time to time in  accordance  with this  Section  3, the
"Retention  Term").  However,  it is understood and agreed by the parties hereto
that (i) absent prior written notice to the  Consultant of the Company's  intent
to terminate  this  Agreement,  such notice being  received by the Consultant at
least three months prior to the intended date of termination or (ii) unless this
Agreement  has been  earlier  terminated  in  accordance  with  Section  11, the
Retention Term shall  automatically  be extended in annual  increments as of the
anniversary of the Retention Date.

      4. Compensation. In full consideration for the services rendered hereunder
to the Company by the Consultant:

            (a) Consulting Fee. The Company shall pay to the Consultant,  during
the term of this Agreement,  a fee of Ten Thousand  Dollars  ($10,000) per month
payable monthly in arrears.  In the event of the  Consultant's  death during the
term of this Agreement, any monthly installments owing but unpaid as of the date
of death shall be paid by the Company to the Consultant's  estate and no further
monthly installments shall be payable.

            (b) Stock  Options.  The Company  hereby  agrees that it will grant,
dated as the closing of the Second Financing herein defined,  to the Consultant,
pursuant to the Company's 2001 Non-Qualified  Stock Option Plan, (the "Plan"), a
non-qualified option (the "Option") to purchase Three Million (3,000,000) shares
of the Company's Common Stock (the "Option Shares"). The exercise price for each
Option Share shall be equivalent to the  transaction  price of the Common Shares
in the  Second  Financing  defined  in the  Series A  Preferred  Stock  Purchase
Agreement dated December 15, 2000 (the "Second Financing"). The Option will vest
and become  exercisable  over a two-year  period  commencing  on the date of the
grant, with one-third vesting and becoming  exercisable on the date of grant and
on each of the first and second  anniversaries of the date of grant,  subject to
termination as provided for in the Plan,  and further  subject to termination in
the event that the Consultant  breaches any term hereof. The Option will contain
a net exercise  provision.  The Option will expire as to each installment  seven
years from the date of vesting.  . The terms (including  exercisability)  of the
Option shall otherwise be governed by the Plan, as well as the applicable option
agreement to be entered into pursuant to the terms of the Plan.  Notwithstanding
the  foregoing,  if,  subsequent to the Agreement  Date, a Change of Control (as
hereinafter  defined) of the Company  occurs,  then, upon such  occurrence,  the
vesting  schedule of the Option shall accelerate so that 100% of the Option will
have vested on the Agreement  Date. For purposes of this  Agreement,  "Change of
Control"  carries the  definition  referenced  in the 2001  Non-Qualified  Stock
Option Plan. For purposes of this  Agreement,  a Change of Control  specifically
excludes the proposed issuance of the Company's common stock and preferred stock
associated  with either the Company's  purchase of certain  biomaterials  assets
from Phairson,  Ltd. or the Second  Financing  (either of such  transactions,  a
"Specified Transaction").

                                       2
<PAGE>

      The Consultant agrees that he will acquire the option and will acquire the
shares of  Common  Stock  issuable  upon  exercise  of the  option,  for his own
account, for investment purposes only, and not for public resale or distribution
of the same. The Consultant  will not sell or otherwise  dispose of, directly or
indirectly,  the option, or any shares of Common Stock issuable upon exercise of
the option,  except in compliance  with the applicable  provisions of the option
agreement,  the Securities Act of 1933, as amended (the  "Securities  Act"), and
the Rules and Regulations of the Securities and Exchange Commission  promulgated
thereunder and the securities laws of any state. The Consultant  understands and
acknowledges  that  neither the option nor the shares of Common  Stock  issuable
upon exercise of the option have been  registered  under the Securities  Act, or
the securities laws of any state,  and that they re being granted and/or sold in
reliance upon an exemption  from  registration  thereunder and that his right to
sell,  transfer,  pledge or  otherwise  dispose  of the  option or the shares of
Common  Stock  issuable  upon  exercise  of the  option  will be  limited by the
Securities Act and state securities laws.

            (c) Payment of Expenses.  The Company shall reimburse the Consultant
for all  reasonable  travel and other  expenses  incurred on its behalf and when
authorized  in advance by the  Company.  Such  expenses  shall be  confirmed  by
appropriate  receipts and shall be submitted in accordance with Company standard
expense account procedure.

      5.  Confidentiality.  The Consultant  recognizes and acknowledges that the
Company's trade secrets,  proprietary information and processes,  including, but
not limited to  research  and  development  activities,  manufacturing,  product
and/or marketing  information,  business strategies,  financial  information and
customer and customer prospect information,  as they may exist from time to time
and whether or not marked  "Confidential" or similarly  legended  ("Confidential
Information"),  are  valuable,  special  and  unique  assets  of  the  Company's
business,  access to and knowledge of which are essential to the  performance of
the Consultant's duties hereunder.  The Consultant will not, during and for five
(5)  years  after  the term of this  Agreement,  in  whole or in part,  disclose
Confidential Information to any person, firm, corporation,  association or other
entity for any reason or purpose  whatsoever,  nor shall the Consultant make use
of  Confidential  Information  for his own  purposes  or for the  benefit of any
person,  firm,  corporation,  or other  entity  (except the  Company)  under any
circumstances  during or after the term of this  Agreement.  These  restrictions
shall not apply to such trade secrets,  information  and processes  which (i) at
the time of disclosure  are in the public domain  (provided  that the Consultant
was not responsible, directly or indirectly, for such trade secrets, information
or processes  entering the public domain  without the Company's  consent),  (ii)
were lawfully in the  Consultant's  possession  or known to Consultant  prior to
receipt from the Company (as evidenced by written record predating the Company's
disclosure  and  acknowledged  by the  parties  to the  Agreement)  or (iii) are
required to be disclosed by the Consultant as a matter of law, by court order or
by any  regulatory  body  having  jurisdiction  over  the  subject  matter.  The
Consultant  agrees to hold as the  Company's  sole and exclusive  property,  all
memoranda,  books, papers, letters,  formulae and other data, and all copies and
other tangible evidence thereof,  in any way relating to the Company's  business
and  affairs,  whether  made by the  Consultant  or  otherwise  coming  into the
Consultant's  possession,  and on termination of this Agreement, or on demand of
the Company at any time,  to deliver  the same to the  Company.  The  Consultant
agrees to maintain the Confidential  Information in the strictest confidence and
to  apply  at  all  times  the  strictest   security  measures  to  prevent  its
unauthorized dissemination.

                                       3
<PAGE>

      6. Developments.

      (a)  Disclosure.  The  Consultant  shall  promptly  and fully  disclose in
writing  and assign to the  Company  all of the  Consultant's  right,  title and
interest in any patentable, copyrightable or otherwise legally protectable idea,
invention, discovery, process, formula, improvement, design of a useful article,
trade secret, database, documentation, proprietary information and material, and
other  material work of authorship,  made or conceived  solely or jointly by the
Consultant during the term of this Agreement,  which (i) arise, result or derive
from any task assigned to the Consultant or work performed by the Consultant for
or on behalf of the Company or from the Company's Confidential  Information,  or
(ii)  relate at the time of  conception  or  reduction  to practice to actual or
demonstrable anticipated research or development of the Company and are known or
become known to the Consultant as a consequence of the Consultant's  consultancy
(collectively "Developments").

      (b) Protection.  At any time,  during or after the term of this Agreement,
at the Company's  request,  the Consultant  shall promptly execute any documents
that the Company may reasonably request,  including  assignments of title to the
Company,  and do anything  else  reasonably  necessary  to enable the Company to
obtain and enforce, in the United States and in any other countries, any patent,
copyright  or other form of legal  protection  for any of the  Developments  the
Consultant is to assign to the Company by reason of Section 6(a).

      7. Reasonableness of Restrictions. If any restriction contained in Section
5 shall be deemed  to be  invalid,  illegal  or  unenforceable  by reason of the
extent,  duration or  geographical  scope thereof or  otherwise,  then the court
making such determination shall have the right to reduce such extent,  duration,
geographical  scope or other  provisions  thereof,  and in its reduced form such
restriction shall then be enforceable in the manner  contemplated  thereby.  The
invalidity or unenforceability of any provision of the Agreement shall in no way
affect the validity or enforceability of any other provision, which shall remain
in full force and effect.

      8. Injunction.  The Consultant acknowledges and agrees that in view of the
unique quality of the services provided to the Company by the Consultant and the
fact  that  the  Company's   business   heavily  depends  upon  its  proprietary
information and Confidential Information, the remedies of the Company at law for
breach by the Consultant of any of the restrictions  contained in Section 5 or 6
will be inadequate and that the Company,  without in any way limiting any of its
other rights at law or in equity, shall be entitled to enforce such restrictions
by temporary or permanent  injunctive or mandatory  relief obtained in an action
or  proceeding  instituted  in any court of competent  jurisdiction  without the
necessity of proving irreparable damages.

                                       4
<PAGE>

      9. Independent  Contractor Status. The Consultant will furnish services as
an  independent  contractor  and not as an  employee  of the  Company  or of any
company affiliated with the Company. Consultant has no power or authority to act
for,  represent,  or bind the Company or any company affiliated with the Company
in any manner.  The  Consultant  is not entitled to any medical  coverage,  life
insurance,  or other benefits  afforded to the Company's regular  employees,  or
those of affiliated companies. If the Company or any of the Company's affiliated
companies  is required to pay or  withhold  any taxes or make any other  payment
with respect to fees payable to the  Consultant,  the Consultant  will reimburse
the Company or the  affiliated  company in full for taxes  paid,  and permit the
Company to make  deductions  for taxes  required to be withheld from any sum due
Consultant.

      10.  Non-Assignability.  This Agreement shall be binding upon and inure to
the  benefit of the parties  hereto and any  successors  to the  business of the
Company,  but neither this  Agreement nor any rights  hereunder may be assigned,
pledged or disposed of, and no duties may be delegated,  by the Consultant,  and
any such attempted act shall relieve the Company of its obligations hereunder.

      11. Early  Termination.  In addition to the provisions for  termination of
this Agreement  referenced in Section 3, this Agreement may be terminated  under
the following circumstances:

      (a) This  Agreement  may be  terminated  by either party in the event of a
material  breach of any provision of this  Agreement by the other,  which breach
continues for fourteen (14) days after written  notice  thereof is given to such
party by the  non-breaching  party.  Any  termination  of this  Agreement by the
Company  pursuant  to  this  sub-paragraph  shall  relieve  the  Company  of its
obligations  to the  Consultant  under  Section 4 hereof,  and cause the  option
referred  to in  Section  4, to the  extent  not  vested  at the time  notice of
termination is given, to terminate  automatically and become of no further force
and effect.

      (b) This  Agreement  may be  terminated  by either  party in the event the
Company should sell all or substantially all of the Company's business assets to
a third party whether through a purchase transaction,  merger,  consolidation or
otherwise.

      (c) This  Agreement  may be  terminated  by  either  party in the even the
Company  should file for  protection  under the federal or any state  bankruptcy
laws, be declared insolvent, should have liens placed on all or substantially of
its assets or other similar proceeding.

      (d) Early termination of this Agreement shall be accomplished by notice to
the  other  party  setting  forth  in  reasonable  detail  the  reason  for  the
termination,  and shall be  effective  on the date set forth in the notice.  The
provisions of Sections 5 and 6 hereof shall survive  early  termination  of this
Agreement pursuant to this Section.

                                       5
<PAGE>

      12. Notices.  Any notices required or permitted by this Agreement shall be
in writing and  personally  delivered or mailed first  class,  postage  prepaid,
addressed  to the Company at P.O.  Box 219,  Little  Silver,  NJ 07739 or to the
Consultant at the address indicated herein.

      13. Entire Agreement.  This Agreement contains the entire agreement of the
parties with respect to the subject  matter  hereof,  and may be amended only by
written instrument signed by the parties.

      14.  Governing Law;  Arbitration.  This Agreement shall be governed by and
construed in accordance  with the laws of New Jersey  (without  reference to its
rules  as to  conflicts  of  law).  Any  dispute  between  the  Company  and the
Consultant  which may arise  hereunder  and which  cannot be  settled  by mutual
agreement  shall be referred to arbitration.  The board of arbitration  shall be
composed of three arbitrators, one of who shall be chosen by the Company, one by
the  Consultant  and the third by the two  chosen.  Unless  the  parties  to the
arbitration  shall  otherwise  agree to a place  of  arbitration,  the  place of
arbitration  shall be the State of New Jersey,  under the Rules of the  American
Arbitration  Association.  The arbitration award shall be final and binding upon
the  parties  to  such  arbitration  and  may be  entered  in any  court  having
jurisdiction.

      15.  Headings.  The  headings  of the  Sections  hereof are  inserted  for
convenience of reference only and do not constitute a part of this Agreement for
any other purpose.

      16.  Counterparts.  This  Agreement  may  be  executed  in any  number  of
counterparts,  each of which  shall be an  original,  but all of which  together
shall constitute one and the same Agreement.

      IN WITNESS WHEROF, the parties have executed or caused to be executed this
Agreement as of the date first above written.

                                    Life Medical Sciences, Inc.

                                    By: /s/ Robert Hickey
                                       ------------------------------
                                       Name:
                                       Title: CEO

                                    /s/ Richard L. Franklin
                                    ---------------------------------
                                    Richard L. Franklin, M.D.

                                       6
<PAGE>

                                 AMENDMENT No. 1

AMENDMENT  No. 1 dated as of this  20th day of May,  2003  ("Amendment  No.  1")
between Life Medical Sciences,  Inc. (the "Company") and Richard L. Franklin, MD
(the "Consultant").

                              W I T N E S S E T H:

      WHEREAS,  the parties have  entered into an agreement  dated April 1, 2001
(the "2001 Agreement"), and

      WHEREAS, the parties wish to modify and amend the 2001 Agreement, upon the
terms, provisions and conditions set forth below (the "Amendment No. 1").

      NOW THEREFORE, in consideration of the mutual agreements set forth herein,
the parties hereto agree as follows:

      1. The following language set forth as Section 3. Term.:

      "The  Consultant's   retention  shall  commence  on  April  1,  2001  (the
      "Retention  Date")  and the  initial  term  shall be for one year from the
      Retention  Date (as  extended  from time to time in  accordance  with this
      Section 3, the "Retention Term").  However, it is understood and agreed by
      the parties  hereto that (i) absent prior written notice to the Consultant
      of the Company's  intent to terminate  this  Agreement,  such notice being
      received by the  Consultant  at least three  months  prior to the intended
      date of  termination  or (ii)  unless  this  Agreement  has  been  earlier
      terminated  in  accordance  with  Section  11,  the  Retention  Term shall
      automatically  be extended in annual  increments as of the  anniversary of
      the Retention Date."

      are hereby deleted and are hereby replaced with the following:

      "The  Consultant's   retention  shall  commence  on  April  1,  2001  (the
      "Retention  Date")  and  shall  terminate  as of  December  31,  2004 (the
      "Retention Period"),  unless this Agreement has been earlier terminated in
      accordance with Section 11."

      2. The following language set forth as Section 4. (a) Consulting Fee.:

      "The Company shall pay to the  Consultant,  during the term of the term of
      this Agreement,  a fee of Ten Thousand Dollars ($10,000) per month payable
      monthly in arrears. In the event of the Consultant's death during the term
      of this  Agreement,  any monthly  installments  owing but unpaid as of the
      date of death shall be paid by the Company to the Consultant's  estate and
      no further monthly installments shall be payable."

      are hereby deleted and are hereby replaced with the following:

                                       1
<PAGE>

      "The Company shall pay to the  Consultant,  during the period  through the
      later of December 31, 2003 or the closing of the  Company's  next round of
      financing  (nominally  referred  to as the  "Series D Round",  for example
      sake), a fee of Ten Thousand Dollars ($10,000) per month and subsequently,
      through the  expiration  of the Retention  Period,  a fee of Five Thousand
      Dollars ($5,000) per month, fees payable on a monthly basis in arrears. In
      the event that the Series D Round has not  closed by March 31,  2004,  the
      monthly fee shall immediately be reduced to Five Thousand Dollars ($5,000)
      per month for the remainder of the Retention Period."

3.    The  following  language  set  forth as the  first  portion  of the  first
      sentence in Section 4. (b) Stock Options.:

      "The  Company  hereby  agrees that it will grant,  dated as the  Retention
      Date,"

      are hereby deleted and are hereby replaced with the following:

      "The  Company  hereby  agrees that it will grant,  dated as of the closing
      date of the Second Financing,"

4.    All terms used herein but not otherwise defined herein shall have the same
      meaning ascribed to such term in the 2001 Agreement.

5.    Amendment  No. 1 may be  executed in  counterparts  each of which shall be
      deemed an original, but all of which together shall constitute one and the
      same  instrument.  From and after the  execution and delivery of Amendment
      No. 1, the term "2001  Agreement" shall be deemed to include the terms and
      provisions of Amendment No. 1.

6.    By  executing  Amendment  No. 1, the  Consultant  and the  Company  hereby
      certify  that  any  and  all  necessary  approvals  and  consents  for the
      effectiveness of Amendment No. 1 have been obtained.

      IN WITNESS WHEREOF,  the parties have duly executed  Amendment No. 1 as of
the day and year first above written.

CONSULTANT:                                 LIFE MEDICAL SCIENCES, INC.:

/s/ Richard L. Franklin                     /s/ Robert P. Hickey
------------------------------              ----------------------------------
Richard L. Franklin, M.D.                   Name:  Robert P. Hickey
                                            Title:  Chairman, President & CEO

                                       2

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