Document:

EXHIBIT 10.1

                              CONSULTING AGREEMENT

This Consulting Agreement (the "Agreement") is entered into as of this 8th day
of March, 2005, by and among Blue Marble Investments Ltd., ("Consultant")
located at P.O. Box 267, Leeward Highways, Providences, Turks and Caicos Islands
and AB Watley Group Inc. ("Watley"), a corporation organized and existing under
the laws of Delaware with corporate offices at 90 Park Ave, New York, New York
10016.

                               W I T N E S S E T H

WHEREAS, Watley desires to engage Consultant to perform certain services
including public relations services on its behalf and to advise Watley on
certain business opportunities; and

Whereas, Consultant has represented that it has the experience and expertise to
perform those certain services which will help Watley in its endeavors to become
better known in the business and financial community and seek further business
opportunities;

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

1.    Services to be Preformed. Consultant agrees to provide the following
      services on behalf of Watley.

      (a)   Consultant shall provide input on Watley's marketing and sales plans
            and materials;

      (b)   Consultant shall provide advice and assistance to Watley with regard
            to public relations, mergers, acquisitions, obtaining corporate
            financing and other business opportunities;

      (c)   Consultant shall provide public relations services to Watley and
            shall advise Watley regarding press releases and communications with
            the investment community, including mutual funds, money managers,
            investors and brokerage firms;

2.    Representations of Watley. Watley represents and warrants that:

      (a)   Watley has the full power and authority to execute and deliver this
            Agreement, and to perform all of its obligations herein, and this
            Agreement has been duly authorized and approved by Watley and is
            binding upon it in accordance with its terms.

      (b)   The warrants and underlying common stock of Watley to be issued to
            Consultant as compensation have been dully issued and, in the case
            of the common stock, reserved for issuance upon exercise of the
            stock options.

3.    Representation of Consultant. Consultant represents and warrants that:

      (a)   Consultant has full power and authority to execute and deliver this
            Agreement, and to perform all of its obligations herein and this
            Agreement has been duly authorized and approved by Watley and is
            binding upon it in accordance with its terms.

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      (b)   Consultant shall limit its representation about Watley to facts
            disclosed by Watley to Consultant, which are not required to be kept
            confidential.

4.    Terms of this Agreement. This agreement shall be binding and in effect
      from the date this Agreement is signed through March 7, 2007.

5.    Compensation.

      As total compensation for Consultant's services:

      (a)   Watley shall issue to Consultant warrants for an aggregate of
            3,000,000 shares of Watley common stock at a price of $.01 per share
            with a cash-less exercise clause. The warrants shall vest on March
            8, 2006 and be exercisable through March 7, 2016.

6.    Notice. All notices, requests, demands and other communications hereunder
      shall be in writing and personally delivered, or sent by registered or
      certified mail or reciepted overnight courier service (such as Federal
      Express) to the following addressees:

      If to Watley:           A.B. Watley Group, Inc.
                              90 Park Ave
                              New York, New York 10016
                              Attn: Robert Malin, President

      If to Consultant:       Blue Marble Investment Ltd.
                              P.O. Box 267
                              Leeward Highway, Providenciales
                              Turks and Caicos Islands

      Provided, however, that either party hereto may, from time to time give to
      the other party written notice, in the manner provided for herein, of some
      other address to which communications to such party shall be sent, in
      which event notice to such party shall be sent. Notice shall be deemed
      effectively given hereunder when personally delivered or deposited in the
      United States mail, postage prepaid, registered or certified, return
      receipt requested, or transmitted by overnight receipted courier service
      as the case may be.

7.    Binding Effect, Assignment. This Agreement shall be binding upon and inure
      to the benefit of the parties hereto and their respective personal
      representatives, heirs, spouses, beneficiaries, successors and permitted
      assigns. Neither party to this Agreement may assign such party's rights or
      obligations hereunder without the prior written consent of the other
      party.

8.    Complete Assignment. This Agreement constitutes the complete understanding
      between the parties with respect to the subject manner hereof. This
      agreement constitutes the entire agreement between the parties hereto with
      respect to the matters covered herein and supersedes all prior or
      contemporaneous agreements, negotiations, representations or discussions
      with respect to such subject matter. This Agreement may not be amended or
      modified except by a written instrument executed by the parties hereto.

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9.    Governing Law. This Agreement and performance hereunder shall be governed
      by and construed in accordance with the laws of the state of New York. In
      the event of any legal or equitable action arising under this Agreement,
      the parties hereto hereby agrees that the courts of the State of New York
      shall have sole and exclusive jurisdiction and venue over any such action
      and each party hereby consents to such jurisdiction.

10.   Further Action. Each Party to this Agreement shall take such further
      action to execute, file, publish and deliver such additional certificates,
      instruments, agreements and other documents as the other party may from
      time to time, reasonably request in order to effectuate the transfer
      contemplated herein, or otherwise to accomplish the purposes of this
      Agreement.

11.   Waiver. No waiver of any breach of any term or condition of this Agreement
      shall be deemed to be a waiver of any subsequent breach of any term or
      condition of a like or different nature.

12.   Severability. If any provision of this Agreement shall be held invalid or
      unenforceable, such validity or unenforceability shall not, if possible,
      affect the validity or enforceability of any other provision of this
      Agreement, and this Agreement shall, if possible, be construed and
      enforced in all respects are if such invalid or unenforceable provision
      had not been contained herein.

13.   Draftsmanship. The fact that one of the parties may have drafted or
      structured any provision hereof shall not be considered in construing the
      particular provision either in favor of, or against, such party.

14.   Counterparts. This Agreement may be executed simultaneously in several
      counterparts, each of which shall be deemed an original, but all of which
      shall only constitute one instrument. Facsimile signatures are acceptable.

      IN WITNESS WHEREOF, each of the parties having agreed to the above
      mentioned terms and conditions have hereunder set their hands and seal as
      of this 8th day of March, 2005.

                                          BLUE MARBLE INVESTMENTS LTD.

                                          By: /S/ Hugh O'Neil
                                          -----------------------------
                                          Name:  Hugh O'Neil

                                            AB WATLEY GROUP INC.

                                          By: /s/ Robert Malin
                                          -----------------------------
                                          Name: Robert Malin, President

                                       3LIFE MEDICAL SCIENCES, INC.
                             STOCK OPTION AGREEMENT
                 UNDER THE 2001 NON-QUALIFIED STOCK OPTION PLAN

                          (NON-QUALIFIED STOCK OPTION)

      AGREEMENT  entered  into as of the date set  forth on the  signature  page
hereto by and between Life Medical Sciences, Inc., a Delaware corporation,  with
a business  address of PO Box 219, Little Silver,  New Jersey (together with its
subsidiaries, if any, the "Company"), and the undersigned (the "Grantee").

      WHEREAS, the Company desires to grant to the Grantee a non-qualified stock
option  under the  Company's  2001  Non-Qualified  Stock  Option Plan (the "2001
Plan") to acquire  shares of the Company's  Common  Stock,  $.001 par value (the
"Shares"); and

      WHEREAS,  the 2001 Plan provides that each option is to be evidenced by an
option agreement, setting forth the terms and conditions of the option.

      NOW  THEREFORE,  in  consideration  of the  premises  and  of  the  mutual
covenants and agreements  contained  herein,  the Company and the Grantee hereby
agree as follows:

      1.    Grant of Option.
            ----------------

      The Company hereby grants to the Grantee a non-qualified stock option (the
"Option") under the 2001 Plan to purchase all or any part of an aggregate of the
number of Shares set forth on the signature  page to this Agreement on the terms
and  conditions  hereinafter  set forth.  The Option  shall NOT be treated as an
incentive  stock option under Section 422 of the Internal  Revenue Code of 1986,
as amended (the "Code").

      2.    Purchase Price.
            ---------------
      The purchase price ("Purchase Price") for the Shares covered by the Option
shall be the  dollar  amount per share set forth on the  signature  page to this
Agreement.

                                                                               1
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      3.    Time of Vesting and Exercise of Option.
            ---------------------------------------
      Subject to Section 4 hereof,  the Option shall vest and become exercisable
on the dates and as to the  installment  amounts set forth on the signature page
to this  Agreement.  To the extent the Option (or any  portion  thereof)  is not
exercised by the Grantee when it becomes  exercisable,  it shall not expire, but
shall be carried forward and shall be exercisable,  on a cumulative basis, until
the Expiration  Date (as  hereinafter  defined) or until earlier  termination as
hereinafter provided.

      4.    Term; Extent of Exercisability.
            -------------------------------
            (a)   Term.

                  (i) The Option shall expire as to each  installment  amount on
                  the date set forth next to each such  amount on the  signature
                  page to this Agreement  (the  "Expiration  Date"),  subject to
                  earlier termination as herein provided.

                  (ii)  In the  event  a  Grantee's  employment  or  service  is
                  terminated   by  the  Company   for  any  reason   other  than
                  "disability",   death   or  for   "cause"   (collectively,   a
                  "Termination  without cause"),  any Option held by the Grantee
                  shall become one hundred percent vested and fully  exercisable
                  for the one year period,  except in the case of the first year
                  of an Option's term in which case the exercise period shall be
                  two years, after the date on which the Grantee's employment or
                  service  is  terminated  by the  Company,  but in any event no
                  later than the date of expiration of the Option term.

                  (iii) In the event the  Grantee's  employment  or  service  is
                  terminated by the Company for "cause",  any Option held by the
                  Grantee   shall   terminate  as  of  the  date  the  Grantee's
                  employment  or service is  terminated  by the  Company and the
                  Grantee shall automatically  forfeit all shares underlying any
                  exercised  portion of an Option for which the  Company has not
                  yet  delivered  the  share  certificates,  upon  refund by the
                  Company of the  Exercise  Price paid by the  Grantee  for such
                  shares.

                  (iv) In the event  the  Grantee's  employment  or  service  is
                  terminated   by  the   Company   on   account   of   Grantee's
                  "disability",  any Option held by the Grantee shall become one
                  hundred  percent  vested and fully  exercisable by the Grantee
                  and shall terminate unless exercised within one year after the
                  date  on  which  the   Grantee's   employment  or  service  is
                  terminated by the Company,  but in any event no later than the
                  date of expiration of the Option term.

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<PAGE>

                  (v) In the event of the death of the Grantee,  any Option held
                  by the Grantee  shall  become one hundred  percent  vested and
                  fully  exercisable by the Grantee and shall  terminate  unless
                  exercised  within  then  later to occur of one year  after the
                  date  on  which  the   Grantee's   employment  or  service  is
                  terminated  by the Company or six months  after the probate of
                  the Grantee's estate, but in any event, no later than the date
                  of expiration of the Option term.

                  (vi) In the event a Grantee  terminates  his or her employment
                  with or services  to the  Company at his or her own  volition,
                  any Option which is otherwise exercisable by the Grantee shall
                  terminate unless  exercised  within six months,  except in the
                  case of the first year of an  Option's  term in which case the
                  exercise period shall be one year, after the date on which the
                  Grantee's  employment  with  or  service  to  the  Company  is
                  terminated,  but in no event later than the date of expiration
                  of the Option term. Any of the Grantee's  Options that are not
                  exercisable  as of the date on which the Grantee's  employment
                  with or service to the Company is terminated  shall  terminate
                  as of such date unless the Committee determines otherwise.

                  (vii)  Notwithstanding  the  provisions  of  Section  4(a)(ii)
                  above, if the Grantee's employment or service is terminated by
                  the Company on account of a "termination without cause" during
                  the one year period  following  a Change of  Control,  as such
                  term is  defined  in the 2001  Plan,  any  Option  held by the
                  Grantee  shall  become one  hundred  percent  vested and fully
                  exercisable  for the two year  period  after the date on which
                  the  Grantee's  employment  or  service is  terminated  by the
                  Company,  but in no event later than the date of expiration of
                  the Option term.

                  (viii) For purposes of this Section 4(a):

                        (A)   The term "Company"  shall mean the Company and its
                              parent  and   subsidiary   corporations,   or  any
                              successor thereto.
                        (B)   The  term  "disability"  shall  mean  a  Grantee's
                              becoming  disabled  within the  meaning of section
                              22(e)(3) of the Code.
                        (C)   The  term  "termination  for  cause"  shall  mean,
                              except to the extent  specified  otherwise  by the
                              Committee that the Grantee has materially breached
                              his or her employment or service contract with the
                              Company,   or   has   been   engaged   in   fraud,
                              embezzlement, theft, commission of a felony in the
                              course of his or her  employment  or service which
                              is  injurious  to the  Company,  or has  disclosed
                              trade secrets or  confidential  information of the

                                                                               3
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                              Company to persons not  entitled  to receive  such
                              information. If this clause (C) conflicts with the
                              definition of "Cause" or  "termination  for cause"
                              (or any similar  definition)  in an  employment or
                              service  agreement  between  the  Company  and the
                              Grantee,  the terms of the  employment  or service
                              agreement shall govern.

      5.    Manner of Exercise of Option.
            -----------------------------

                  (a) To the extent  that the right to  exercise  the Option has
                  accrued and is in effect,  the Option may be exercised in full
                  or in part by giving written notice to the Company stating the
                  number of Shares as to which the Option is being exercised and
                  accompanied  by  payment in full for such  Shares.  No partial
                  exercise  may be made for less  than one  hundred  (100)  full
                  Shares of Common  Stock.  Payment  shall be made in accordance
                  with the terms of the 2001 Plan. Upon such exercise,  delivery
                  of a certificate for paid-up,  non-assessable  Shares shall be
                  made at the  principal  office of the  Company  to the  person
                  exercising the Option, not less than fifteen (15) and not more
                  than  forty-five  (45)  days from the date of  receipt  of the
                  notice by the Company.

                  (b) The  Company  shall at all  times  during  the term of the
                  Option reserve and keep available such number of Shares of its
                  Common Stock as will be sufficient to satisfy the requirements
                  of the Option.

      6.    Non-Transferability.
            --------------------

      Except  as  provided  below,  only the  Grantee  or his or her  authorized
representative  may exercise rights under an Option.  A Grantee may not transfer
options except (i) by will, (ii) by the laws of descent and distribution,  (iii)
to the Company (as contemplated by Rule 16b-3 of the Exchange Act, (iv) pursuant
to a  domestic  relations  order  (as  defined  under the Code or Title I of the
Employee  Retirement Income Security Act of 1974, as amended, or the regulations
thereunder),  or (v) as  otherwise  permitted by the  Committee.  When a Grantee
dies,  the personal  representative  or other person  entitled to succeed to the
rights  of the  Grantee  ("Successor  Grantee")  may  exercise  such  rights.  A
Successor  Grantee must furnish proof  satisfactory to the Company of his or her
right to receive the Option  under the  Grantee's  will or under the  applicable
laws of descent and distribution.

      7.    Representation Letter and Investment Legend.
            --------------------------------------------
      In the event that for any reason the Shares to be issued upon  exercise of
the Option shall not be effectively  registered under the Securities Act of 1933
(" 1933  Act"),  upon any date on which the Option is  exercised  in whole or in
part, the person  exercising the Option shall give a written  representation  to
the Company in the form attached hereto as Exhibit 1 and the Company shall place
an  "investment  legend",  so-called,  as  described  in  Exhibit  1,  upon  any
certificate for the Shares issued by reason of such exercise.

                                                                               4
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      8.    Adjustments on Changes in Capitalization.
            -----------------------------------------
      Adjustments  on  changes in  capitalization  and the like shall be made in
accordance with the 2001 Plan, as in effect on the date of this Option.

      9.    No Special Employment Rights.
            -----------------------------

      The provisions of this Section 9 are  applicable  only to Grantees who are
employees of the Company. Nothing contained in this Option shall be construed or
deemed by any person under any circumstances to bind the Company to continue the
employment  of the  Grantee  for the  period  within  which  this  Option may be
exercised.  However, during the period of the Grantee's employment,  the Grantee
shall render  diligently  and  faithfully the services which are assigned to the
Grantee from time to time by the Board of Directors or by the executive officers
of the Company and shall at no time take any action which directly or indirectly
would be inconsistent with the best interests of the Company.

      10.   Rights as a Stockholder.
            ------------------------

      The  Grantee  shall have no rights as a  stockholder  with  respect to any
Shares  which may be  purchased  by exercise  of this Option  unless and until a
certificate  or  certificates  representing  such  Shares  are duly  issued  and
delivered to the Grantee.

      11.   Withholding Taxes.
            ------------------

      Whenever Shares are to be issued upon exercise of this Option, the Company
shall have the right to require  the  Grantee to remit to the  Company an amount
sufficient to satisfy all Federal,  state and local withholding tax requirements
prior to the delivery of any  certificate or  certificates  for the Shares.  The
Company  may agree to permit the  Grantee to  authorize  the Company to withhold
Shares of Common  Stock  purchased  upon  exercise  of the Option to satisfy the
above-mentioned  withholding requirement;  provided,  however, no such agreement
may be made by an Grantee  who is an officer or  director  within the meaning of
Section 16 of the Securities  Exchange Act of 1934, as amended,  except pursuant
to a standing  election to so withhold  Shares of Common  Stock  purchased  upon
exercise  of the  Option,  such  election  to be made in the form  set  forth in
Exhibit  2  hereto  and to be made not less  than six (6)  months  prior to such
exercise.  Such election may be revoked only upon providing six (6) months prior
written notice to the Company.

IN WITNESS  WHEREOF,  the Company has caused this Agreement to be executed,  and
the  Grantee  has  hereunto  set his or her hand,  all as of the 26th day of May
2004.

                                                                               5
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                                        LIFE MEDICAL SCIENCES, INC.

                                        By: /s/ Richard L. Franklin, MD
                                            ---------------------------
                                        Title: Chairman

                                        GRANTEE

                                        Print Name: Robert P. Hickey
                                                    ----------------

                                        Sign Name:
                                                  ------------------------------

                                        Address:
                                                  ------------------------------

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

                                        Social Security Number:
                                                                ----------------

                               OPTION INFORMATION
                               ------------------

Total Number of Shares Underlying Option:  250,000
Purchase Price Per Share:  $0.43

                          VESTING & EXPIRATION SCHEDULE
                          -----------------------------

  VESTING DATE                 NUMBER OF SHARES              EXPIRATION DATE
  ------------                 ----------------              ---------------

 April 23, 2004                    250,000                    April 23, 2011

                                                                               6
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                                    EXHIBIT 1
                            TO STOCK OPTION AGREEMENT
                            -------------------------

Gentlemen:

      In connection  with the exercise by me of an option to purchase  shares of
Common Stock, $.001 par value, of Life Medical Sciences, Inc. (the "Company"), I
hereby acknowledge that I have been informed as follows:

      1. The shares of Common  Stock of the  Company to be issued to me pursuant
to the exercise of said option (the "Shares") have not been registered under the
Securities Act of 1933, as amended (the "Securities Act") and, accordingly, must
be held  indefinitely  unless the Shares are  subsequently  registered under the
Securities Act, or an exemption from such registration is available.

      2. Routine  sales of  securities  made in reliance upon Rule 144 under the
Securities Act can be made only after the holding  period  provided by that Rule
has been  satisfied,  and,  in any sale to which  that  Rule is not  applicable,
registration  or compliance  with some other  exemption under the Securities Act
will be required.

      3. The  availability of Rule 144 is dependent upon adequate current public
information  with respect to the Company being available and, at the time that I
may desire to make a sale pursuant to the Rule, the Company may neither wish nor
be able to comply with such requirement.

      In  consideration  of the issuance of certificates for the Shares to me, I
hereby  represent  and warrant that I am acquiring the Shares for my own account
for investment,  and that I will not sell,  pledge or transfer the Shares in the
absence of an effective  registration  statement  covering  the same,  except as
permitted by the provisions of Rule 144, if applicable, or some other applicable
exemption under the Securities Act. In view of this representation and warranty,
I agree  that  there may be  affixed  to the  certificates  for the Shares to be
issued to me, and to all certificates  issued hereafter  representing the Shares
(until in the opinion of counsel, which opinion must be reasonably  satisfactory
in form and substance to counsel for the Company,  it is no longer  necessary or
required) a legend as follows:

      "The securities  represented by this  certificate have not been registered
      under the  Securities  Act of 1933,  as amended,  and were acquired by the
      registered  holder  pursuant to a  representation  and warranty  that such
      holder was  acquiring  the Shares for his own account and for  investment,
      with no intention of transfer or  disposition  of the same in violation of
      the  registration  requirements  of that Act. These  securities may not be
      sold, pledged, or transferred in the absence of an effective  registration
      statement  under  such Act,  or an opinion of  counsel,  which  opinion is
      reasonably  satisfactory  to counsel to the  Company,  to the effect  that
      registration is not required under such Act."

                                                                               7
<PAGE>

      I further agree that the Company may place a stop transfer  order with its
transfer agent,  prohibiting  the transfer of the Shares,  so long as the legend
remains on the certificates representing the Shares.

                                    Very truly yours,

Dated: _____________

                                                                               8
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                                    EXHIBIT 2
                            TO STOCK OPTION AGREEMENT
                            -------------------------

Gentlemen:

      The  undersigned  Grantee  hereby  elects and agrees  that,  whenever  the
undersigned  exercises a stock option  (including  any options  which now or may
hereafter be  granted),  Life  Medical  Sciences,  Inc.  (the  "Company")  shall
withhold  from that exercise such number of Shares equal in value to the federal
and state  withholding  taxes due upon such exercise.  The  undersigned  further
acknowledges  and agrees that this  election may not be revoked  without six (6)
months' prior written notice to the Company.

                                        GRANTEE:

                                        --------------------------------
                                                   (Signature)

                                        --------------------------------
                                                  (Print Name)

                                                                               9
<PAGE>

                           LIFE MEDICAL SCIENCES, INC.
                             STOCK OPTION AGREEMENT
                 UNDER THE 2001 NON-QUALIFIED STOCK OPTION PLAN

                          (NON-QUALIFIED STOCK OPTION)

      AGREEMENT  entered  into as of the date set  forth on the  signature  page
hereto by and between Life Medical Sciences, Inc., a Delaware corporation,  with
a business  address of PO Box 219, Little Silver,  New Jersey (together with its
subsidiaries, if any, the "Company"), and the undersigned (the "Grantee").

      WHEREAS, the Company desires to grant to the Grantee a non-qualified stock
option  under the  Company's  2001  Non-Qualified  Stock  Option Plan (the "2001
Plan") to acquire  shares of the Company's  Common  Stock,  $.001 par value (the
"Shares"); and

      WHEREAS,  the 2001 Plan provides that each option is to be evidenced by an
option agreement, setting forth the terms and conditions of the option.

      NOW  THEREFORE,  in  consideration  of the  premises  and  of  the  mutual
covenants and agreements  contained  herein,  the Company and the Grantee hereby
agree as follows:

      1.    Grant of Option.
            ----------------

      The Company hereby grants to the Grantee a non-qualified stock option (the
"Option") under the 2001 Plan to purchase all or any part of an aggregate of the
number of Shares set forth on the signature  page to this Agreement on the terms
and  conditions  hereinafter  set forth.  The Option  shall NOT be treated as an
incentive  stock option under Section 422 of the Internal  Revenue Code of 1986,
as amended (the "Code").

      2.    Purchase Price.
            ---------------

      The purchase price ("Purchase Price") for the Shares covered by the Option
shall be the  dollar  amount per share set forth on the  signature  page to this
Agreement.

                                                                               1
<PAGE>

      3.    Time of Vesting and Exercise of Option.
            ---------------------------------------

      Subject to Section 4 hereof,  the Option shall vest and become exercisable
on the dates and as to the  installment  amounts set forth on the signature page
to this  Agreement.  To the extent the Option (or any  portion  thereof)  is not
exercised by the Grantee when it becomes  exercisable,  it shall not expire, but
shall be carried forward and shall be exercisable,  on a cumulative basis, until
the Expiration  Date (as  hereinafter  defined) or until earlier  termination as
hereinafter provided.

      4.    Term; Extent of Exercisability.
            -------------------------------

            (a)   Term.

                  (i) The Option shall expire as to each  installment  amount on
                  the date set forth next to each such  amount on the  signature
                  page to this Agreement  (the  "Expiration  Date"),  subject to
                  earlier termination as herein provided.

                  (ii)  In the  event  a  Grantee's  employment  or  service  is
                  terminated   by  the  Company   for  any  reason   other  than
                  "disability",   death   or  for   "cause"   (collectively,   a
                  "Termination  without cause"),  any Option held by the Grantee
                  shall become one hundred percent vested and fully  exercisable
                  for the one year period,  except in the case of the first year
                  of an Option's term in which case the exercise period shall be
                  two years, after the date on which the Grantee's employment or
                  service  is  terminated  by the  Company,  but in any event no
                  later than the date of expiration of the Option term.

                  (iii) In the event the  Grantee's  employment  or  service  is
                  terminated by the Company for "cause",  any Option held by the
                  Grantee   shall   terminate  as  of  the  date  the  Grantee's
                  employment  or service is  terminated  by the  Company and the
                  Grantee shall automatically  forfeit all shares underlying any
                  exercised  portion of an Option for which the  Company has not
                  yet  delivered  the  share  certificates,  upon  refund by the
                  Company of the  Exercise  Price paid by the  Grantee  for such
                  shares.

                  (iv) In the event  the  Grantee's  employment  or  service  is
                  terminated   by  the   Company   on   account   of   Grantee's
                  "disability",  any Option held by the Grantee shall become one
                  hundred  percent  vested and fully  exercisable by the Grantee
                  and shall terminate unless exercised within one year after the
                  date  on  which  the   Grantee's   employment  or  service  is
                  terminated by the Company,  but in any event no later than the
                  date of expiration of the Option term.

                                                                               2
<PAGE>

                  (v) In the event of the death of the Grantee,  any Option held
                  by the Grantee  shall  become one hundred  percent  vested and
                  fully  exercisable by the Grantee and shall  terminate  unless
                  exercised  within  then  later to occur of one year  after the
                  date  on  which  the   Grantee's   employment  or  service  is
                  terminated  by the Company or six months  after the probate of
                  the Grantee's estate, but in any event, no later than the date
                  of expiration of the Option term.

                  (vi) In the event a Grantee  terminates  his or her employment
                  with or services  to the  Company at his or her own  volition,
                  any Option which is otherwise exercisable by the Grantee shall
                  terminate unless  exercised  within six months,  except in the
                  case of the first year of an  Option's  term in which case the
                  exercise period shall be one year, after the date on which the
                  Grantee's  employment  with  or  service  to  the  Company  is
                  terminated,  but in no event later than the date of expiration
                  of the Option term. Any of the Grantee's  Options that are not
                  exercisable  as of the date on which the Grantee's  employment
                  with or service to the Company is terminated  shall  terminate
                  as of such date unless the Committee determines otherwise.

                  (vii)  Notwithstanding  the  provisions  of  Section  4(a)(ii)
                  above, if the Grantee's employment or service is terminated by
                  the Company on account of a "termination without cause" during
                  the one year period  following  a Change of  Control,  as such
                  term is  defined  in the 2001  Plan,  any  Option  held by the
                  Grantee  shall  become one  hundred  percent  vested and fully
                  exercisable  for the two year  period  after the date on which
                  the  Grantee's  employment  or  service is  terminated  by the
                  Company,  but in no event later than the date of expiration of
                  the Option term.

                  (viii) For purposes of this Section 4(a):

                        (A)   The term "Company"  shall mean the Company and its
                              parent  and   subsidiary   corporations,   or  any
                              successor thereto.
                        (B)   The  term  "disability"  shall  mean  a  Grantee's
                              becoming  disabled  within the  meaning of section
                              22(e)(3) of the Code.
                        (C)   The  term  "termination  for  cause"  shall  mean,
                              except to the extent  specified  otherwise  by the
                              Committee that the Grantee has materially breached
                              his or her employment or service contract with the
                              Company,   or   has   been   engaged   in   fraud,
                              embezzlement, theft, commission of a felony in the
                              course of his or her  employment  or service which
                              is  injurious  to the  Company,  or has  disclosed
                              trade secrets or  confidential  information of the

                                                                               3
<PAGE>

                              Company to persons not  entitled  to receive  such
                              information. If this clause (C) conflicts with the
                              definition of "Cause" or  "termination  for cause"
                              (or any similar  definition)  in an  employment or
                              service  agreement  between  the  Company  and the
                              Grantee,  the terms of the  employment  or service
                              agreement shall govern.

      5.    Manner of Exercise of Option.
            -----------------------------

                  (a) To the extent  that the right to  exercise  the Option has
                  accrued and is in effect,  the Option may be exercised in full
                  or in part by giving written notice to the Company stating the
                  number of Shares as to which the Option is being exercised and
                  accompanied  by  payment in full for such  Shares.  No partial
                  exercise  may be made for less  than one  hundred  (100)  full
                  Shares of Common  Stock.  Payment  shall be made in accordance
                  with the terms of the 2001 Plan. Upon such exercise,  delivery
                  of a certificate for paid-up,  non-assessable  Shares shall be
                  made at the  principal  office of the  Company  to the  person
                  exercising the Option, not less than fifteen (15) and not more
                  than  forty-five  (45)  days from the date of  receipt  of the
                  notice by the Company.

                  (b) The  Company  shall at all  times  during  the term of the
                  Option reserve and keep available such number of Shares of its
                  Common Stock as will be sufficient to satisfy the requirements
                  of the Option.

      6.    Non-Transferability.
            --------------------

      Except  as  provided  below,  only the  Grantee  or his or her  authorized
representative  may exercise rights under an Option.  A Grantee may not transfer
options except (i) by will, (ii) by the laws of descent and distribution,  (iii)
to the Company (as contemplated by Rule 16b-3 of the Exchange Act, (iv) pursuant
to a  domestic  relations  order  (as  defined  under the Code or Title I of the
Employee  Retirement Income Security Act of 1974, as amended, or the regulations
thereunder),  or (v) as  otherwise  permitted by the  Committee.  When a Grantee
dies,  the personal  representative  or other person  entitled to succeed to the
rights  of the  Grantee  ("Successor  Grantee")  may  exercise  such  rights.  A
Successor  Grantee must furnish proof  satisfactory to the Company of his or her
right to receive the Option  under the  Grantee's  will or under the  applicable
laws of descent and distribution.

      7.    Representation Letter and Investment Legend.
            --------------------------------------------

      In the event that for any reason the Shares to be issued upon  exercise of
the Option shall not be effectively  registered under the Securities Act of 1933
(" 1933  Act"),  upon any date on which the Option is  exercised  in whole or in
part, the person  exercising the Option shall give a written  representation  to
the Company in the form attached hereto as Exhibit 1 and the Company shall place
an  "investment  legend",  so-called,  as  described  in  Exhibit  1,  upon  any
certificate for the Shares issued by reason of such exercise.

                                                                               4
<PAGE>

      8.    Adjustments on Changes in Capitalization.
            -----------------------------------------

      Adjustments  on  changes in  capitalization  and the like shall be made in
accordance with the 2001 Plan, as in effect on the date of this Option.

      9.    No Special Employment Rights.
            -----------------------------

      The provisions of this Section 9 are  applicable  only to Grantees who are
employees of the Company. Nothing contained in this Option shall be construed or
deemed by any person under any circumstances to bind the Company to continue the
employment  of the  Grantee  for the  period  within  which  this  Option may be
exercised.  However, during the period of the Grantee's employment,  the Grantee
shall render  diligently  and  faithfully the services which are assigned to the
Grantee from time to time by the Board of Directors or by the executive officers
of the Company and shall at no time take any action which directly or indirectly
would be inconsistent with the best interests of the Company.

      10.   Rights as a Stockholder.
            ------------------------

      The  Grantee  shall have no rights as a  stockholder  with  respect to any
Shares  which may be  purchased  by exercise  of this Option  unless and until a
certificate  or  certificates  representing  such  Shares  are duly  issued  and
delivered to the Grantee.

      11.   Withholding Taxes.
            ------------------

      Whenever Shares are to be issued upon exercise of this Option, the Company
shall have the right to require  the  Grantee to remit to the  Company an amount
sufficient to satisfy all Federal,  state and local withholding tax requirements
prior to the delivery of any  certificate or  certificates  for the Shares.  The
Company  may agree to permit the  Grantee to  authorize  the Company to withhold
Shares of Common  Stock  purchased  upon  exercise  of the Option to satisfy the
above-mentioned  withholding requirement;  provided,  however, no such agreement
may be made by an Grantee  who is an officer or  director  within the meaning of
Section 16 of the Securities  Exchange Act of 1934, as amended,  except pursuant
to a standing  election to so withhold  Shares of Common  Stock  purchased  upon
exercise  of the  Option,  such  election  to be made in the form  set  forth in
Exhibit  2  hereto  and to be made not less  than six (6)  months  prior to such
exercise.  Such election may be revoked only upon providing six (6) months prior
written notice to the Company.

IN WITNESS  WHEREOF,  the Company has caused this Agreement to be executed,  and
the  Grantee  has  hereunto  set his or her hand,  all as of the 26th day of May
2004.

                                                                               5
<PAGE>

                                        LIFE MEDICAL SCIENCES, INC.

                                        By: /s/ Richard L. Franklin, MD
                                            ---------------------------
                                        Title: Chairman

                                        GRANTEE

                                        Print Name: Robert P. Hickey
                                                    ----------------

                                        Sign Name:
                                                    ----------------------------

                                        Address:
                                                    ----------------------------

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

                                        Social Security Number:
                                                                ----------------

                               OPTION INFORMATION
                               ------------------

Total Number of Shares Underlying Option:  600,000

                     VESTING, PRICING & EXPIRATION SCHEDULE
                     --------------------------------------

                       NUMBER OF           EXERCISE              EXPIRATION
VESTING DATE            SHARES               PRICE                 DATE
------------         ------------        ------------           ------------
May 24, 2004              200,000        $       0.45           May 24, 2011
May 24, 2005              200,000        $       0.55           May 24, 2012
May 24, 2006              200,000        $       0.65           May 24, 2013

                                                                               6
<PAGE>

EXHIBIT 1
                            TO STOCK OPTION AGREEMENT
                            -------------------------

Gentlemen:

      In connection  with the exercise by me of an option to purchase  shares of
Common Stock, $.001 par value, of Life Medical Sciences, Inc. (the "Company"), I
hereby acknowledge that I have been informed as follows:

      1. The shares of Common  Stock of the  Company to be issued to me pursuant
to the exercise of said option (the "Shares") have not been registered under the
Securities Act of 1933, as amended (the "Securities Act") and, accordingly, must
be held  indefinitely  unless the Shares are  subsequently  registered under the
Securities Act, or an exemption from such registration is available.

      2. Routine  sales of  securities  made in reliance upon Rule 144 under the
Securities Act can be made only after the holding  period  provided by that Rule
has been  satisfied,  and,  in any sale to which  that  Rule is not  applicable,
registration  or compliance  with some other  exemption under the Securities Act
will be required.

      3. The  availability of Rule 144 is dependent upon adequate current public
information  with respect to the Company being available and, at the time that I
may desire to make a sale pursuant to the Rule, the Company may neither wish nor
be able to comply with such requirement.

      In  consideration  of the issuance of certificates for the Shares to me, I
hereby  represent  and warrant that I am acquiring the Shares for my own account
for investment,  and that I will not sell,  pledge or transfer the Shares in the
absence of an effective  registration  statement  covering  the same,  except as
permitted by the provisions of Rule 144, if applicable, or some other applicable
exemption under the Securities Act. In view of this representation and warranty,
I agree  that  there may be  affixed  to the  certificates  for the Shares to be
issued to me, and to all certificates  issued hereafter  representing the Shares
(until in the opinion of counsel, which opinion must be reasonably  satisfactory
in form and substance to counsel for the Company,  it is no longer  necessary or
required) a legend as follows:

      "The securities  represented by this  certificate have not been registered
      under the  Securities  Act of 1933,  as amended,  and were acquired by the
      registered  holder  pursuant to a  representation  and warranty  that such
      holder was  acquiring  the Shares for his own account and for  investment,
      with no intention of transfer or  disposition  of the same in violation of
      the  registration  requirements  of that Act. These  securities may not be
      sold, pledged, or transferred in the absence of an effective  registration
      statement  under  such Act,  or an opinion of  counsel,  which  opinion is
      reasonably  satisfactory  to counsel to the  Company,  to the effect  that
      registration is not required under such Act."

                                                                               7
<PAGE>

      I further agree that the Company may place a stop transfer  order with its
transfer agent,  prohibiting  the transfer of the Shares,  so long as the legend
remains on the certificates representing the Shares.

                                          Very truly yours,

Dated: _____________

                                                                               8
<PAGE>

                                    EXHIBIT 2
                            TO STOCK OPTION AGREEMENT
                            -------------------------

Gentlemen:

      The  undersigned  Grantee  hereby  elects and agrees  that,  whenever  the
undersigned  exercises a stock option  (including  any options  which now or may
hereafter be  granted),  Life  Medical  Sciences,  Inc.  (the  "Company")  shall
withhold  from that exercise such number of Shares equal in value to the federal
and state  withholding  taxes due upon such exercise.  The  undersigned  further
acknowledges  and agrees that this  election may not be revoked  without six (6)
months' prior written notice to the Company.

                                        GRANTEE:

                                        ----------------------------------
                                                   (Signature)

                                        ----------------------------------
                                                   (Print Name)

                                                                               9

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