Document:

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EXHIBIT 10.40

                              EMPLOYMENT AGREEMENT

         THIS AGREEMENT made in Oceanport, New Jersey as of the 1st day of March
2003, between Life Medical Sciences, Inc., a Delaware corporation (the
"Company") and Eli Pines the undersigned individual ("Executive").

         In consideration of the mutual covenants and agreements hereinafter set
forth, the Company and Executive agree as follows:

         1.       Agreement Term.

                 The term of this Agreement shall be the three-year period
commencing on March 1, 2003 (the "Employment Date") and ending on the third
anniversary of the Employment Date (the "Agreement Term"). It is understood and
agreed by the parties hereto that absent prior written notice to the Executive
of the Company's intent to terminate this Agreement, such notice being received
by the Executive at least three months prior to the end of the Agreement Term or
unless the Company has exercised its right to terminate this Agreement under
Sections 5.(b) or 5.(c), the Agreement Term shall automatically be extended in
annual increments as of the anniversary of the Employment Date.

         2.       Employment.

                 (a) Employment by the Company. Executive agrees to be employed
by the Company for the Agreement Term upon the terms and subject to the
conditions set forth in this Agreement. Executive shall have the title of Vice
President of Research and Chief Scientific Officer reporting to the President
and CEO. Executive shall have such duties as may be prescribed by the Company
and shall serve in such other and/or additional position(s) as the Company may
determine from time to time. Executive shall also serve as a Corporate Officer
of the Company. The Company will at all times treat the Executive with dignity,
honesty and respect, and will provide Executive with such resources as in the
Company's judgement shall enable the Executive to discharge his
responsibilities.

                 (b) Performance of Duties. Throughout the Agreement Term,
Executive shall faithfully and diligently perform Executive's duties in
conformity with the directions of the Company and serve the Company to the best
of Executive's ability. Executive shall devote Executive's entire working time,
attention and energies to the business and affairs of the Company, subject to
vacations and sick leave as provided herein and in accordance with Company
policy.

                 (c) Place of Performance. During the Agreement Term, Executive
shall, subject to travel requirements on behalf of the Company, be based at the
Executive's personal residence or such other location(s) in central New Jersey
as the Company may determine.

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         3.       Compensation and Benefits.

                  (a) Base Salary. The Company agrees to pay to Executive for
employment hereunder a base salary ("Base Salary") at the annual rate of
$180,000. The Base Salary shall be increased prospectively on each anniversary
of the Employment Date during the Agreement Term, by such amount as the Board of
Directors of the Company shall determine is necessary and appropriate to give
effect to increases in the cost of living. The Base Salary shall be payable in
installments consistent with the Company's payroll practices then in effect.

                  (b) Benefits and Perquisites; Bonus and Stock Options.
Executive shall be entitled to participate in, to the extent Executive is
otherwise eligible under the terms thereof, the benefit plans and programs,
including medical and savings and retirement plans, and receive the benefits and
perquisites, generally provided to employees of the same level and
responsibility as Executive. Executive shall be entitled to four weeks vacation
during each year of the Agreement Term. Nothing in this Agreement shall preclude
the Company from terminating or amending from time to time any employee benefit
plan or program. Executive shall be eligible for bonuses and stock options, at
such times and in such amounts as shall be determined at the discretion of the
Board of Directors of the Company based on their assessment of Executive's
performance of his duties and on the financial performance of the Company.

                  (c) Travel and Business Expenses. Upon submission of itemized
expense statements with supporting receipts in the manner specified by the
Company, Executive shall be entitled to reimbursement for reasonable travel and
other reasonable business expenses duly incurred by Executive in the performance
of Executive's duties under this Agreement in accordance with the policies and
procedures established by the Company from time to time for employees of the
same level and responsibility as Executive.

                  (d) No Other Compensation or Benefits; Payment. The
compensation and benefits specified in Sections 3 and 5 of this Agreement shall
be in lieu of any and all other compensation and benefits. Payment of all
compensation and benefits to Executive hereunder shall be made in accordance
with the relevant Company policies in effect from time to time, including normal
payroll practices, and shall be subject to all applicable employment and
withholding taxes.

                  (e) Cessation of Employment. In the event Executive shall
cease to be employed by the Company for any reason, then Executive's
compensation and benefits shall cease on the date of such event, except as
otherwise provided herein or in any applicable employee benefit plan or program.

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         4.       Exclusive Employment; Noncompetition.

                  (a) No Conflict; No Other Employment. During the period of
Executive's employment with the Company, Executive shall not engage in any
activity which conflicts or interferes with or derogates from the performance of
Executive's duties hereunder nor shall Executive engage in any other business
activity, whether or not such business activity is pursued for gain or profit,
except as approved in advance in writing by the President & CEO of the Company.

                  (b) No Competition. Without limiting the generality of the
provisions of Sections 2(b) or 4(a) and so long as the Company fulfills its
obligations under this Agreement, during the period of Executive's employment
with the Company, and for a period of one year thereafter (the "Restricted
Period"), Executive shall not, directly or indirectly, own, manage, operate,
join, control, participate in, invest in or otherwise be connected or associated
with, in any manner, including as an officer, director, employee, partner,
stockholder, joint venturer, lender, consultant, advisor, agent, proprietor,
trustee or investor, any Competing Business located in the United States or in
any other location where the Company operates or sells its products or services;
provided, however, that if Executive's employment hereunder is terminated by the
Company under Section 5(d), then the provisions of this Section 4(b) shall
remain in effect only if the Company shall not have breached its obligation to
pay to Executive amounts as severance pursuant to Section 5(d).

                          (i) As used in this Agreement, the term "Competing
         Business" shall mean any business or venture which engages in any
         business area, or sells or provides products or services that compete
         or overlap with any business area, in which the Company engages or is
         actively developing products or technology to engage in at any time
         during the Agreement Term, or any business or venture which sells or
         provides products or services that compete or overlap with the products
         or services as sold or provided, or are being actively developed to be
         sold or provided, by the Company at any time during the Agreement Term.

                          (ii) For purposes of this Section 4(b), the term
         "invest" shall not preclude an investment in not more than one percent
         (1%) of the outstanding capital stock of a corporation whose capital
         stock is listed on a national securities exchange or included in the
         NASDAQ Stock Market, so long as Executive does not have the power to
         control or direct the management of, or is not otherwise associated
         with, such corporation.

                 (c) No Solicitation. During the Restricted Period, Executive
shall not solicit or encourage any employee or consultant of the Company to
leave the employ, or cease his or her relationship with, the Company for any
reason, nor employ or retain such an individual in a Competing Business or any
other business.

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                  (d) Company Customers. Executive shall not, during the
Restricted Period, directly or indirectly, contact, solicit or do business with
any "customers" (as hereinafter defined) of the Company for the purpose of
selling or providing any product or service then sold or provided by the Company
to such customers or being actively developed to be sold or provided to such
customers during Executive's employment by the Company or at the time of
termination of Executive's employment hereunder.

                  For the purposes of the provisions of this Section 4(d),
"customer" shall include any entity that purchased any product or service from
the Company within twelve months of the termination of Executive's employment
hereunder, without regard to the reason for such termination. The term
"customer" also includes any former customer or potential customer of the
Company which the Company has solicited within twelve months of such
termination, for the purpose of selling or providing any product or service then
sold or provided, or then actively being developed to be sold or provided, by
the Company.

                  (e) Modification of Covenants. The restrictions against
competition set forth in this Section 4 are considered by the parties to be
reasonable for the purposes of protecting the business of the Company. However,
if any such restriction is found by any court of competent jurisdiction to be
unenforceable because it extends for too long a period of time or over too great
a range of activities or in too broad a geographic area, it shall be interpreted
to extend only over the maximum period of time, range of activities or
geographic area as to which it may be enforceable.

         5.       Termination of Employment.

                  (a) Termination. The Company may terminate Executive's
employment for Cause (as hereinafter defined) in which case the provisions of
Section 5(b) shall apply. The Company may also terminate Executive's employment
in the event of Executive's Disability (as hereinafter defined), in which case
the provisions of Section 5(c) shall apply. The Company may also terminate the
Executive's employment for any other reason by written notice to Executive, in
which case the provisions of Section 5(d) shall apply. If Executive's employment
is terminated by reason of Executive's death, retirement or voluntary
resignation, the provisions of Section 5(b) shall apply.

                  (b) Termination for Cause; Termination by Reason of Death or
Retirement or Voluntary Resignation without Good Reason.

                         (1) In the event that Executive's employment hereunder
is terminated during the Agreement Term (i) by the Company for Cause (as
hereinafter defined), (ii) by reason of Executive's death or retirement or (iii)
by reason of Executive's voluntary resignation without Good Reason, then the
Company shall pay to Executive, within thirty (30) days of the date of such
termination, only the Base Salary through such date of termination.

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                         (2) For purposes of this Agreement, "Cause" shall mean
(i) conviction of any crime (whether or not involving the Company) constituting
a felony in the jurisdiction involved; (ii) engaging in any substantiated act
involving moral turpitude; (iii) engaging in any act which, in each case,
subjects, or if generally known would subject, the Company to public ridicule or
embarrassment; (iv) gross neglect or misconduct in the performance of
Executive's duties hereunder; (v) willful or repeated failure or refusal to
perform such duties as may be relegated to Executive commensurate with
Executive's position; or (vi) breach of any provision of this Agreement by
Executive.

                         (3) In the event the Company desires to terminate
Executive's employment for Cause as defined in clauses (iv), (v) or (vi) of the
definition thereof, the Company shall first attempt to resolve the matter(s) at
issue through a meeting between Executive and the Chairman of the Board for
Directors of the Company. If such meeting fails to resolve the matter(s), then
Executive will meet with the Board of Directors of the Company and attempt to
resolve the matter(s). The decision of the Board of Directors of the Company as
to the matter(s) shall be final and binding on the parties and not subject to
review or appeal by any other person.

                 (c) Disability. If, as a result of Executive's incapacity due
to physical or mental illness, Executive shall have been absent from Executive's
duties hereunder on a full time basis for either (i) ninety (90) days within any
six-month period, or (ii) sixty (60) consecutive days, and within thirty (30)
days after written notice of termination is given shall not have returned to the
performance of Executive's duties hereunder on a full time basis, the Company
may terminate Executive's employment hereunder for "Disability". In that event,
the Company shall pay to Executive, within thirty (30) days of the date of such
termination, only the Base Salary through such date of termination. During any
period that Executive fails to perform Executive's duties hereunder as a result
of incapacity due to physical or mental illness (a "Disability Period"),
Executive shall continue to receive the compensation and benefits provided by
Section 3 hereof until Executive's employment hereunder is terminated; provided,
however, that the amount of compensation and benefits received by Executive
during the Disability Period shall be reduced by the aggregate amounts, if any,
payable to Executive under disability benefit plans and programs of the Company
or under the Social Security disability insurance program.

                 (d) Termination By Company For Any Other Reason; Termination
for Good Reason by Executive In the event that Executive's employment hereunder
is terminated by the Company during the Agreement Term for any reason other than
as provided in Sections 5(b) or 5(c) hereof or is terminated for Good Reason by
Executive then the Company shall pay to Executive, within thirty (30) days of
the date of such termination, the Base Salary through such date of termination
and, in lieu of any further compensation and benefits for the balance of the
Agreement Term, severance pay equal to the Base Salary that Executive would have
otherwise received during the period of six months from the effective date of
such termination, commencing with such date of termination at the times and in
the amounts such Base Salary would have been

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paid; provided, however, that in the event that Executive shall breach Sections
4 or 6 hereof, in addition to any other remedies the Company may have in the
event Executive breaches this Agreement, the Company's obligation pursuant to
this Section 5(d) to continue such payments of salary shall cease and
Executive's rights thereto shall terminate and shall be forfeited. "Good Reason"
shall mean (i) the assignment to Executive of duties inconsistent with his
title, (ii) a reduction by the Company in the Base Salary as in effect on the
date hereof or as it may be increased from time to time, (iii) the failure by
the Company to continue any compensation or benefit plan that is material to
Executive's total compensation, (iv) a Change in Control, as such term is
defined in the Company's 2001 Non-Qualified Stock Option Plan, or (v) a
relocation of the Company's offices where Executive is to perform the services
required hereby to an unreasonable commuting distance from Executive's residence
in the New York City area.

         (d) No Further Liability; Release. Payment made and performance by the
Company in accordance with this Section 5 shall operate to fully discharge and
release the Company and its directors, officers, employees, subsidiaries,
affiliates, stockholders, successors, assigns, agents and representatives from
any further obligation or liability with respect to Executive's employment and
termination of employment. Other than paying Executive's Base Salary through the
date of termination of Executive's employment and making any severance payment
pursuant to and in accordance with this Section 5 (as applicable), the Company
and its directors, officers, employees, subsidiaries, affiliates, stockholders,
successors, assigns, agents and representatives shall have no further obligation
or liability to Executive or any other person under this Agreement. The Company
shall have the right to condition the payment of any severance or other amounts
pursuant to Sections 5(c) or 5(d) hereof upon the delivery by Executive to the
Company of a release in form and substance satisfactory to the Company of any
and all claims Executive may have against the Company and its directors,
officers, employees, subsidiaries, affiliates, stockholders, successors,
assigns, agents and representatives arising out of or related to Executive's
employment by the Company and termination of such employment.

6.       Confidential Information.

         (a) Existence of Confidential Information. The Company owns and has
developed and compiled, and will develop and compile, certain proprietary
technology, know-how and confidential information which have great value to its
business (referred to in this Agreement, collectively, as ("Confidential
Information"). Confidential Information includes not only information disclosed
by the Company to Executive, but also information developed or learned by
Executive during the course or as a result of employment with the Company, which
information shall be the property of the Company. By way of example and without
limitation, Confidential Information includes all information that has or could
have commercial value or other utility in the business in which the Company is
engaged or contemplates engaging, and all information of which the unauthorized
disclosure could be detrimental to the interests of the Company, whether

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or not such information is specifically labeled as Confidential Information. By
way of example and without limitation, Confidential Information includes any and
all information developed, obtained, licensed by or to or owned by the Company
concerning trade secrets, techniques, know-how (including research data,
designs, plans, procedures, merchandising, marketing, distribution and
warehousing know-how, processes, and research records), software, computer
programs, and any other intellectual property created, used or sold (through a
license or otherwise) by the Company, product know-how and processes,
innovations, discoveries, improvements, research, development, test results,
reports, specifications, data, formats, marketing data and plans, business
plans, strategies, forecasts, unpublished financial information, orders,
agreements and other forms of documents, price and cost information,
merchandising opportunities, expansion plans, budgets, projections, customer,
supplier, licensee, licensor and subcontractor identities, characteristics,
agreements and operating procedures, and salary, staffing and employment
information.

         (b) Protection of Confidential Information. Executive acknowledges and
agrees that in the performance of duties hereunder Executive develops and
acquires, and the Company discloses to and entrusts Executive with, Confidential
Information which is the exclusive property of the Company and which Executive
may possess or use only in the performance of duties for the Company. Executive
also acknowledges that Executive is aware that the unauthorized disclosure of
Confidential Information, among other things, may be prejudicial to the
Company's interests, an invasion of privacy and an improper disclosure of trade
secrets. Executive shall not, directly of indirectly, use, make available, sell,
disclose or otherwise communicate to any corporation, partnership, individual or
other third party, other than in the course of Executive's assigned duties and
for the benefit of the Company, any Confidential Information, either during the
Agreement Term or thereafter. In the event Executive desires to publish the
results of Executive's work for or experiences with the Company through
literature, interviews or speeches, Executive will submit requests for such
interviews or such literature or speeches to the Board of Directors of the
Company at least fourteen (14) days before any anticipated dissemination of such
information for a determination of whether such disclosure is in the best
interests of the Company, including whether such disclosure may impair trade
secret status or constitute an invasion of privacy. Executive agrees not to
publish, disclose or otherwise disseminate such information without the prior
written approval of the Board of Directors of the Company.

         (c) Delivery of Records, Etc. In the event Executive's employment with
the Company ceases for any reason, Executive will not remove from the Company's
premises without its prior written consent any records, notes, notebooks, files,
drawings, documents, equipment, materials and writings received from, created
for or belonging to the Company, including those which relate to or contain
Confidential Information, or any copies thereof. Upon request or when employment
with the Company terminates, Executive will immediately deliver the same to the
Company.

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7.       Invention and Patents.

         (a) Executive will promptly and fully disclose to the Company any and
all inventions, discoveries, trade secrets and improvements, whether or not
patentable or whether or not they are made, conceived or reduced to practice
during working hours or using the Company's data or facilities, which Executive
shall develop, make, conceive or reduce to practice during Executive's
employment by the Company, either solely or jointly with others (collectively,
"Developments"). All such Developments shall be the sole property of the
Company, and Executive hereby assigns to the Company, without further
compensation, all his right, title and interest in and to such Developments and
any and all related patents, patent applications, copyrights, copyright
applications, trademarks and trade names in the United States and elsewhere.

         (b) Executive shall keep and maintain adequate and current written
records of all Developments (in the form of notes, sketches, drawings and as may
be specified by the Company), which records shall be available to and remain the
sole property of the Company at all times.

         (c) Executive shall assist the Company in obtaining and enforcing
patent, copyright and other forms of legal protection for the Developments in
any country. Upon request, Executive shall sign all applications, assignments,
instruments and papers and perform all acts necessary or desired by the Company
and to enable the Company its successors, assigns and nominees, to secure and
enjoy the full exclusive benefits and advantages thereof.

         (d) Executive understands that Executive's obligations under this
section will continue after the termination of his employment with the Company
and that Executive shall perform such obligations without further compensation,
except (i) for reimbursement of expenses incurred at the request of the Company
and (ii) that after the termination of Executive's employment with the Company
and notwithstanding anything in this Section 7 to the contrary, Executive shall
not be required to provide assistance to the Company in accordance with this
Section 7 or Section 9(l) for more than 50 hours during any twelve-month period.
If the Company desires assistance beyond such 50-hour limitation, such
assistance shall be subject to Executive's consent, not to be unreasonably
withheld, and the Company will compensate Executive on a per diem basis at a per
diem rate that is determined by dividing the Base Salary in effect when the
Employment Term was terminated by 250 days.

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8.       Assignment and Transfer

         (a) Company. This Agreement shall inure to the benefit of and be
enforceable by, and may be assigned by the Company to, any purchaser of all or
substantially all of the Company's business or assets, any successor to the
Company or any assignee thereof (whether direct or indirect, by purchase,
merger, consolidation or otherwise). The Company will require any such
purchaser, successor or assignee to expressly assume and agree to perform this
Agreement in the same manner and to the same extent that the Company would be
required to perform it if no such purchase, succession or assignment had taken
place.

         (b) Executive. Executive's rights and obligations under this Agreement
shall not be transferable by Executive by assignment or otherwise, and any
purported assignment, transfer or delegation thereof shall be void; provided,
however, that if Executive shall die, all amounts then payable to Executive
hereunder shall be paid in accordance with the terms of this Agreement to
Executive's devisee, legatee or other designee or, if there be no such designee,
to Executive's estate.

9.       Miscellaneous.

         (a) Other Obligations. Executive represents and warrants that he is not
a party to any other employment agreement and that neither Executive's
employment with the Company nor Executive's performance of Executive's
obligations hereunder will conflict with or violate or otherwise are
inconsistent with any other agreements to which Executive is or has been a party
or with any other obligations, legal or otherwise, which Executive may have.

         (b) Nondisclosure; Prior Employers. Executive will not disclose to the
Company, or use, or induce the Company to use, any proprietary information,
trade secrets or confidential business information of others. Executive
represents and warrants that Executive has returned all property, proprietary
information, trade secrets and confidential business information belonging to
all prior employers.

         (c) Cooperation. Following termination of employment with the Company,
Executive shall cooperate with the Company, as requested by the Company, to
affect a transition of Executive's responsibilities and to ensure that the
Company is aware of all matters being handled by Executive. As compensation for
such cooperation, the Company shall pay the Executive on a mutually agreed upon
per diem basis. Such compensation shall be over and above any payments due the
Executive as defined herein.

         (d) Protection of Reputation. During the Agreement Term and thereafter,
Executive agrees that he will take no action which is intended, or could
reasonably be expected, to harm the Company or its reputation or which could
reasonably be expected to lead to unwanted or unfavorable publicity to the
Company.

         (e) Governing Law; Arbitration.

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                 (i) Governing Law. This Agreement, including the validity,
interpretation, construction and performance of this Agreement, shall be
governed by and construed in accordance with the laws of the State of New Jersey
applicable to agreements made and to be performed in such state without regard
to such states conflicts of law principles.

                 (ii) Arbitration. Subject to Section 9(k) hereof, any
controversy or claim which arises out of or relating to this Agreement, or the
breach thereof shall be settled by arbitration in accordance with the Rules of
the American Arbitration Association then in effect. The controversy or claim
shall be submitted to three arbitrators, one of whom shall be chosen by the
Employee, one of whom shall be chosen by the Company, and one of whom shall be
chosen by the two so selected. The party desiring arbitration shall give written
notice to the other party of its desire to arbitrate the particular matter in
question, naming the arbitrator selected by it. If the other party shall fail
within a period of 15 days after such notice shall have been given to reply in
writing naming the arbitrator chosen as above provided, or if the two
arbitrators selected by the parties shall fail within 15 days after their
selection to agree upon the third arbitrator, then either party may apply to the
American Arbitration Association for the appointment of an arbitrator to fill
the place so remaining vacant. The decision of any two of the arbitrators shall
be final and binding upon the parties hereto. Judgement upon the award rendered
by the arbitrators may be entered in any court having jurisdiction thereof. The
proceedings shall be held in New York, New York. The arbitrators shall have no
power to award punitive or exemplary damages or to ignore or vary the terms of
this Agreement, and shall be bound to apply controlling law. Arbitration shall
be binding and the remedy for the settlement of the controversy or claims
(except as set forth in the preceding paragraph of this Section).

         (f) Entire Agreement. This Agreement (including the Exhibits hereto)
contains the entire agreement and understanding between the parties hereto in
respect of the subject matter hereof and supersedes, cancels and annuls any
prior or contemporaneous written or oral agreements, understandings, commitments
and practices between them respecting the subject matter hereof, including all
prior employment agreements, if any, between the Company and Executive, which
agreement(s) hereby are terminated and shall be of no further force or effect.

         (g) Amendment. This Agreement may be amended only by a writing which
makes express reference to this Agreement as the subject of such amendment and
which is signed by Executive and, on behalf of the Company, by its duly
authorized officer.

         (h) Severability. If any term, provision, covenant or condition of this
Agreement or part thereof, or the application thereof to any person, place or
circumstance, shall be held to be invalid, unenforceable or void, the remainder
of this Agreement and such term, provision, covenant or condition shall remain
in full force and effect, and any such invalid, unenforceable or void term,
provision, covenant or condition shall be deemed, without further action on the
part of the parties hereto, modified, amended and limited to the extent
necessary to render the same and

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the remainder of this Agreement valid, enforceable and lawful. In this regard,
Executive acknowledges that the provisions of Sections 4 and 6 are reasonable
and necessary for the protection of the Company.

         (i) Construction. The headings and captions of this Agreement are
provided for convenience only and are intended to have no effect in construing
or interpreting this Agreement. The language in all parts of this Agreement
shall be in all cases construed according to its fair meaning and not strictly
for or against the Company or Executive. The use herein of the word "including,"
when following any general provision, sentence, clause, statement, term or
matter, shall be deemed to mean "including, without limitation". As used herein,
"Company" shall mean the Company and its subsidiaries and any purchaser of,
successor to or assignee (whether direct or indirect, by purchase, merger,
consolidation or otherwise) of all or substantially all of the Company's
business or assets which is obligated to perform this Agreement by operation of
law. As used herein, the words "day" or "days" shall mean a calendar day or
days.

         (j) Nonwaiver. Neither any course of dealing nor any failure or neglect
of either party hereto in any instance to exercise any right, power or privilege
hereunder or under law shall constitute a waiver of any other right, power or
privilege or of the same right, power or privilege in any other instance. All
waivers by either party hereto must be contained in a written instrument signed
by the party to be charged and, in the case of the Company, by its duly
authorized officer.

         (k) Remedies for Breach. The parties hereto agree that Executive is
obligated under this Agreement to render personal services during the Agreement
Term of a special, unique, unusual, extraordinary and intellectual character,
thereby giving this Agreement peculiar value, and, in the event of a breach or
threatened breach of any covenant of Executive herein, the injury or imminent
injury to the value and the goodwill of the Company's business could not be
reasonably or adequately compensated in damages in an action at law.
Accordingly, Executive expressly acknowledges that the Company shall be entitled
to specific performance, injunctive relief or any other equitable remedy against
Executive, without the posting of a bond, in the event of any breach or
threatened breach of any provision of this Agreement by Executive (including
Sections 4 and 6 hereof). Without limiting the generality of the foregoing, if
Executive breaches Sections 4 or 6 hereof, such breach will entitle the Company
to enjoin Executive from disclosing any Confidential Information to any
Competing Business, to enjoin such Competing Business from receiving Executive
or using any such Confidential Information and/or to enjoin Executive from
rendering personal services to or in connection with such Competing Business.
The rights and remedies of the parties hereto are cumulative and shall not be
exclusive, and each such party shall be entitled to pursue all legal and
equitable rights and remedies and to secure performance of the obligations and
duties of the other under this Agreement, and the enforcement of one or more of
such rights and remedies by a party shall in no way preclude such party from
pursuing, at the same time or subsequently, any and all other rights and
remedies available to it.

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         (l) Notices. Any notice, request, consent or approval required or
permitted to be given under this Agreement or pursuant to law shall be
sufficient if in writing, and if and when sent by certified or registered mail,
return receipt requested, with postage prepaid, to Executive's residence (as
reflected in the Company's records or as otherwise designated by Executive on
thirty (30) days' prior written notice to the Company) or to the Company's
principal executive office, attention: Chairman of the Board (with copies to the
General Counsel), as the case may be. All such notices, requests, consents and
approvals shall be effective upon being deposited in the United States mail.
However, the time period in which a response thereto must be given shall
commence to run from the date of receipt on the return receipt of the notice,
request, consent or approval by the addressee thereof. Rejection or other
refusal to accept, or the inability to deliver because of changed address of
which no notice was given as provided herein, shall be deemed to be receipt of
the notice, request, consent or approval sent.

         (m) Assistance in Proceedings, Etc. Executive shall, without additional
compensation, during and after expiration of the Agreement Term, upon reasonable
notice, furnish such information and proper assistance to the Company as may
reasonably be required by the Company in connection with any legal or
quasi-legal proceeding, including any external or internal investigation,
involving the Company or any of its affiliates or in which any of them is, or
may become, a party, unless Executive is adverse to the Company in such
proceeding or unless Executive and the Company are both defendants in such
proceeding and assisting the Company may impair Executive's ability to defend
himself in such proceeding. After the Employment Term Executive shall provide
the same assistance under the same conditions, except that Executive shall not
be required to provide assistance to the Company in accordance with this Section
or Section 7 for more than 50 hours during any twelve-month period. If the
Company desires assistance beyond such 50-hour limitation, such assistance shall
be subject to Executive's consent, not to be unreasonably withheld, and the
Company will compensate Executive on a per diem basis at a per diem rate that is
determined by dividing the Base Salary in effect when the Employment Term was
terminated by 250 days.

         (n) Survival. Cessation or termination of Executive's employment with
the Company shall not result in termination of this Agreement. The respective
obligations of Executive and rights and benefits afforded to the Company as
provided in this Agreement shall survive cessation or termination of Executive's
employment hereunder. This Agreement shall not terminate upon, and shall remain
in full force and effect following, expiration of the Agreement Term and all
rights and obligations of the parties hereto as and to the extent provided
herein shall survive such expiration.

                                      -12-
<PAGE>

         IN WITNESS WHEREOF, the Company has caused this Agreement to be duly
executed on its behalf by an officer thereunto duly authorized and Executive has
duly executed this Agreement, all as of the date and year first written above.

                                            LIFE MEDICAL SCIENCES, INC.

                                            By:__________________________
                                               Robert P. Hickey
                                               Chairman, President & CEO

                                            EXECUTIVE

                                            ----------------------------
                                            Eli Pines, Ph. D.

<PAGE>

        Life Medical Sciences, Inc.
        Improving Life Through Discovery

March 1, 2003

Eli Pines, Ph. D.
415 Marine St.
Santa Monica, CA 90405

         Re:  Indemnification Agreement

Dear Eli:

Reference is made to that certain Indemnification Agreement entered into with
you on May 29, 1996 (the "Indemnification Agreement") at the time of your prior
employment as an executive officer of our company. That employment ended on July
31, 2000.

In connection with your rejoining our company as Chief Scientific Officer and
Vice President of Research and Development effective March 1, 2003, we hereby
agree to extend the term of the Indemnification Agreement so that your Corporate
Status (as defined therein) continues uninterrupted from May 29, 1996 through
the term of your current employment agreement.

Except as modified hereby, the terms of the Indemnification Agreement shall
continue in full force and effect.

If you are in agreement with the foregoing modification to the Indemnification
Agreement, kindly so indicate by signing in the space provided below and
returning the originally signed copy to the undersigned.

                                                     Very truly yours,

                                                     Robert P. Hickey
                                                     Chairman, President & CEO

Agreed:

-------------------------
Eli Pines, Ph.D.

--------------------------------------------------------------------------------
PO Box 219, Little Silver, NJ  07739
                             www.lifemedicalsciences.com
                                                        Phone/Fax  732-728-1769

<PAGE><PAGE>
EXHIBIT 10.41

                       ASSIGNMENT AND AMENDMENT AGREEMENT

         THIS  ASSIGNMENT  AND  AMENDMENT  AGREEMENT,  dated as of March 7, 2003
(this  "Agreement"),  by and among SWISS FEDERAL INSTITUTE OF TECHNOLOGY (ETHZ),
having  an  address  at  Raemistrasse  101,  CH-8092  Zurich,   Switzerland  and
UNIVERSITY  OF  ZURICH,  having an address at  Raemistrasse  91 CH-8006  Zurich,
Switzerland (collectively,  "Universities"),  PHAIRSON MEDICAL LIMITED, a United
Kingdom  company  ("Phairson"),  and LIFE  MEDICAL  SCIENCES,  INC.,  a Delaware
corporation  ("LMS").  References  to  Universities,  Phairson and LMS hereunder
shall include each of their respective agents, nominees, designees,  successors,
assigns, heirs or other successors-in-interest.  All representations, warranties
and covenants of the Universities hereunder shall be joint and several.

                              W I T N E S S E T H:
                              -------------------

         WHEREAS,  Phairson has agreed to sell LMS all of its assets  related to
its polymer-based technology business,  pursuant to an Asset Purchase Agreement,
dated as of the date hereof, by and between  Phairson,  an affiliate of Phairson
and LMS (the "Asset Purchase Agreement");

         WHEREAS,  among  the  assets  to be sold to LMS  pursuant  to the Asset
Purchase Agreement are all of Phairson's rights under the contract,  dated as of
March 1, 1999,  between  Phairson and  Universities,  as amended  pursuant to an
amendment effective June 1, 1999 (the "Development Agreement");

         WHEREAS,  Universities  agree  to the  assignment  of  the  Development
Agreement and the amendment  thereof,  all subject to and in accordance with the
provisions of this Agreement.

         NOW  THEREFORE,  in  consideration  of  the  premises  and  the  mutual
covenants  contained  herein  and other  good and  valuable  consideration,  the
receipt and  sufficiency  of which are hereby  acknowledged,  the parties hereto
hereby agree as follows:

1. CONSENT BY  UNIVERSITIES  TO  ASSIGNMENT.  Subject to the  provisions of this
Agreement,  and in order to induce  the other  parties  hereto to enter into the
Asset  Purchase  Agreement  and  to  consummate  the  transactions  contemplated
thereby,  Universities  hereby  consent  to the  assignment  of the  Development
Agreement from Phairson to LMS effective as of the closing of the Asset Purchase
Agreement (which date shall not be later than March 15, 2003, the "Closing") and
agree that,  notwithstanding  any provision of the Development  Agreement to the
contrary,  Phairson  shall  not be  liable  for  obligations  arising  under the
Development Agreement from and after the Closing.

2.  ASSIGNMENT  AND  ASSUMPTION OF  DEVELOPMENT  AGREEMENT.  Effective as of the
Closing, (i) Phairson hereby sells, assigns, conveys and transfers to LMS all of
Phairson's right, title and interest in, to and arising under or relating to the
Development Agreement and all intellectual property and other rights of Phairson
obtained or arising thereunder,  but excluding the Patent Rights (which shall be
<PAGE>

transferred  to LMS  pursuant  to  separate  instrument(s))  and (ii) LMS hereby
assumes  and  shall  be  solely  responsible  for  all  of the  obligations  and
liabilities of Phairson  arising under the Development  Agreement from and after
such date.

3.  AMENDMENT  OF  DEVELOPMENT  AGREEMENT.  LMS  and  Universities  agree  that,
effective  as of the  Closing,  the  Development  Agreement  shall be amended as
follows:

     (a)  to change all references  therein from  "Phairson" to "LMS"; to change
          all references  therein from  "Foundation" to  "Universities";  and to
          change all references therein from "ETH Zurich Institute of Biomedical
          Engineering...ETH" to "Swiss Federal Institute of Technology (ETHZ)".

     (b)  to  substitute  the LMS address and contact  information  set forth in
          Section 10 hereof  for the  address  and  contact  information  of the
          Phairson  technical  and  administrative  representatives  in  Article
          IV-Designated  Representatives  of the Development  Agreement,  and to
          further add the other  provisions  of Section 10 hereof  (exclusive of
          the contact  information)  to the provisions of Article  IV-Designated
          Representatives  of the  Development  Agreement and to substitute  the
          Universities'  address and contact information set forth in Section 10
          hereof for the  address  and  contact  information  of the  Foundation
          technical and administrative  representatives in Article IV-Designated
          Representatives of the Development Agreement

     (c)  to substitute the following for Section 4 of Article VI:

                  "4. (a)  Universities  hereby grant  Contractor  an exclusive,
                  worldwide, perpetual license under their Proprietary Rights in
                  the Technology, without limitation or restriction as to use or
                  field of use (the  "License").  The License includes the right
                  to  sublicense.   With  respect  to  sublicenses   granted  by
                  Contractor,  Contractor  shall promptly  provide  Universities
                  with a copy of each sublicense  issued; and collect payment of
                  all payments due, directly or indirectly, to Universities from
                  Sublicensees  and  summarize  and  deliver  all  reports  due,
                  directly or indirectly,  to  Universities  from  Sublicensees.
                  Universities  reserve the right to use  Proprietary  Rights in
                  the Technology  solely for internal  educational  and research
                  purposes.

                   In consideration  for the License,  Contractor  agrees to pay
                  Universities,  in the  aggregate,  one tenth of one percent of
                  any and all Net Sales and Sublicense Fees actually received by
                  it.  If,  prior  to  receipt  by  Contractor  of Net  Sales or
                  Sublicense  Fees,  Contractor fails to perform any Development
                  Work with respect to the  Technology for a period of two years
                  or more,  Universities shall have the right to enter into good
                  faith  negotiations  with  Contractor to terminate the License
                  and develop the Technology.

                           (b) For the purposes of this  section,  the following
terms shall have the following meanings:

                                       2
<PAGE>

                           `Development  Work' means any  technical  or business
                  activity relating to the development,  manufacture,  marketing
                  or  commercialization  of a Product or  Products or efforts to
                  secure intellectual property rights with respect thereto.

                           `Products'   means   products    incorporating    the
                  Technology.

                           `Proprietary Rights' means patent rights, copyrights,
                  mask work rights,  trademark  rights,  trade secret rights and
                  any and all other intellectual property or similar rights.

                           `Net  Sales' of a party means all  revenues  actually
                  received  by that party or its  affiliate(s)  with  respect to
                  sale of  Products  in any and all  countries  in which a valid
                  patent  included  in  the  licensed  Proprietary  Rights  then
                  exists,   less  any  allowances  for  returns,   shipping  and
                  insurance costs, discounts and promotional allowances,  sales,
                  use,  value-added  and  similar  taxes and duties and  similar
                  governmental assessments.

                           `Sublicense  Fees' means any and all revenue received
                  by Contractor  in respect of  sublicenses  of the  Proprietary
                  Rights  licensed  under this  Agreement.  For the avoidance of
                  doubt,  as used in the foregoing  sentence the term  "revenue"
                  includes the value,  as determined  in accordance  with United
                  States    generally    acceptable    accounting    principles,
                  attributable to property,  if any, other than cash received by
                  Contractor in respect of sublicenses of the Proprietary Rights
                  under this Agreement."

                           `Technology'    means    inventions,    improvements,
                  discoveries,  know-how  and the like  made or  conceived  as a
                  result of or in connection  with the sponsored work under this
                  Agreement.

     (d)  Beginning  January 1, 2004 and ending on the date of first  commercial
          sale of a Product,  Contractor  shall  submit to  Universities  annual
          progress reports covering Contractor's (and Sublicensee's)  activities
          to develop and test all  Products  and obtain  governmental  approvals
          necessary for marketing the same. Such reports shall include a summary
          of work completed;  summary of work in progress;  current  schedule of
          anticipated  events or milestones and market plans for introduction of
          Products.  Contractor  shall  also  report  to  Universities,  in  its
          immediately  subsequent  progress report, the date of first commercial
          sale of a  Product.  After  the  first  commercial  sale of a  Product
          anywhere  in  the  world,  Contractor  shall  submit  to  Universities
          annually  royalty  reports on or before each February 28. Each royalty
          report shall cover  Contractor's  (and  Sublicensee's)  most  recently
          completed  calendar  year and shall  show (i) the gross  sales and Net
          Sales  during  the  most  recently  completed  calendar  year  and the
          royalties,  in U.S.  Dollars,  payable with respect thereto;  (ii) the
          number  of each  type of  Product  sold;  (iii)  sublicense  fees  and
          royalties received during the most recently completed calendar year in
          US dollars,  payable  with  respect  thereto;  (iv) the method used to
          calculate the  royalties;  and (v) the exchange rates used. If no sale
          of Products has been made and no sublicense  revenue has been received
          by Contractor during any reporting period, Contractor shall so report.

                                       3
<PAGE>

     (e)  All fees and royalties due Universities shall be paid in United States
          dollars and all checks  shall be made  payable to "The  University  of
          Zurich",  referencing "Unitectra Technology Transfer UZ-04/201".  When
          Products  are sold in  currencies  other than United  States  dollars,
          Contractor shall first determine the earned royalty in the currency of
          the country in which  Products  were sold and then  convert the amount
          into equivalent United States funds, using the exchange rate quoted in
          the Wall Street  Journal on the last  business  day of the  applicable
          reporting  period.  Royalties shall accrue when Products are invoiced,
          or if not invoiced,  when delivered to a third party. Contractor shall
          pay earned royalties on or before February 28. Each such payment shall
          be for earned  royalties  accrued  within  Contractor's  most recently
          completed calendar year.  Royalties earned on sales occurring or under
          sublicense granted pursuant to this Agreement in any country shall not
          be reduced by Contractor for any taxes, fees, or other charges imposed
          by the  government  of such country on the payment of royalty  income,
          except  that  all  payments  made  by  Contractor  in  fulfillment  of
          Universities' tax liability in any particular  country may be credited
          against earned  royalties or fees due  Universities  for that country.
          Contractor  shall pay all bank charges  resulting from the transfer of
          such royalty payments. In the event royalty,  reimbursement and/or fee
          payments are not received by Universities  when due,  Contractor shall
          pay to  Universities  interest  charges at a rate of ten percent (10%)
          per year.  Such interest shall be calculated from the date payment was
          due until actually received by Universities.

     (f)  To  substitute  the following for Section 3 of Article VI.

          At its  sole  discretion  and  expense,  Contractor  shall  diligently
          prosecute and maintain the patent applications and patents relating to
          Proprietary  Rights  using  counsel of its choice.  Contractor  or its
          counsel shall, upon request,  provide  Universities with copies of all
          relevant documentation relating to such prosecution including, but not
          limited to, draft patent  applications,  office  actions and responses
          thereto,  and appropriate  correspondence with counsel and agents. All
          patents and patent  applications  relating to Proprietary Rights shall
          be assigned jointly to Contractor and Universities (ie. "Swiss Federal
          Institute of Technology(ETHZ)" and "University of Zurich"). Contractor
          shall, at its sole  discretion and expense,  apply for an extension of
          the term of any  patent in Patent  Rights if  appropriate.  Contractor
          shall  prepare all documents for such  application,  and  Universities
          shall execute such documents and take any other  additional  action as
          Contractor reasonably requests in connection therewith.

     (g)  The  license  granted is  provided  "AS IS" and  without  WARRANTY  OF
          MERCHANTABILITY or WARRANTY OF FITNESS FOR A PARTICULAR PURPOSE or any
          other   warranty,   express   or   implied.   UNIVERSITIES   make   no
          representation   or  warranty  that  the  Product(s)  or  the  use  of

                                       4
<PAGE>

          Proprietary Rights or Technology will not infringe any other patent or
          other proprietary  rights.  Contractor shall indemnify,  hold harmless
          and defend UNIVERSITIES,  its officers,  employees, and agents and the
          Inventors of the patents and patent applications in Proprietary Rights
          and their employers (collectively,  the "Indemnified Parties") against
          any and all claims,  suits, losses,  damage,  costs, fees and expenses
          resulting  from or  arising  out of any  theory of  product  liability
          relating to the Product(s).  Notwithstanding the foregoing, Contractor
          shall have no obligation  pursuant to this  paragraph  with respect to
          any claim  resulting  from or arising out of any negligent or wrongful
          action or inaction of any of the Indemnified Parties or which has been
          settled  by  an  Indemnified   Party  without  the  prior  consent  of
          Contractor  (which  consent  shall  not  be  unreasonably   withheld).
          Contractor  shall have the right to direct  the  defense of any action
          brought  against an  Indemnified  Party with respect to the subject of
          indemnity  contained herein,  and to retain counsel of its choosing in
          connection  therewith  (subject  to  the  reasonable  approval  of the
          Indemnified Parties).

All other provisions of the Development Agreement shall remain in full force and
effect.

4. REPRESENTATIONS AND WARRANTIES OF UNIVERSITIES. Universities hereby represent
and warrant to LMS and Phairson, as of the date hereof, that: (i) this Agreement
has been duly  authorized  by  Universities,  and the  execution,  delivery  and
performance  of this  Agreement  by  Universities  and the  consummation  of the
transactions  contemplated hereby do not and will not constitute a breach of any
agreement to which it is a party or violate any provision of any law to which it
is subject;  (ii) no consent of any person or governmental entity is required in
connection  with the execution or delivery of this Agreement by  Universities or
the consummation by Universities of the transactions  contemplated hereby; (iii)
there are no actions, suits, proceedings, orders, grievance proceeding or claims
pending or, to Universities' knowledge,  threatened against them relating to the
Development  Agreement  or this  Agreement,  or the subject  matter  thereof and
hereof;  (iv) there is no default, or event which with the passage of time would
constitute a default, under the Development Agreement by either Universities or,
to Universities'  knowledge,  by Phairson;  (v)  Universities  have delivered to
Phairson  complete written  disclosures with respect to all Inventions under the
Development  Agreement and  Universities  acknowledge that all of the Inventions
were  conceived  and/or made  jointly by  Universities  and  Phairson  (vi) upon
consummation of the transactions  contemplated by this Agreement,  there will be
no amounts owed Universities by Phairson or Phairson by Universities;  and (vii)
the  Development  Agreement,  a true and  complete  copy of which is attached as
Exhibit A hereto,  has not been amended other than the amendment  effective June
1, 1999 (a form of which is included as part of Exhibit A), is in full force and
effect and is enforceable in accordance with its terms,  and, upon  consummation
of the transactions  contemplated by this Agreement, will be enforceable against
Universities by LMS in accordance with its terms (as amended hereby); and (viii)
the Universities have no objection to the Contract dated 1 December 1998 between
Phairson and Professor J. A. Hubbell.

5.  REPRESENTATIONS  AND WARRANTIES OF PHAIRSON.  Phairson hereby represents and
warrants  to  Universities  and  LMS,  as of the  date  hereof,  that:  (i) this
Agreement has been duly authorized by Phairson, and the execution,  delivery and

                                       5
<PAGE>

performance  of  this  Agreement  by  Phairson  and  the   consummation  of  the
transactions  contemplated hereby do not and will not constitute a breach of the
organizational  or  constituent  documents of Phairson or any agreement to which
Phairson is a party or violate any  provision of any law to which it is subject;
(ii) no consent of any person or  governmental  entity is required in connection
with the execution or delivery of this Agreement by Phairson or the consummation
by Phairson of the transactions contemplated hereby; (iii) there are no actions,
suits,  proceedings,  orders,  grievance  proceeding  or claims  pending  or, to
Phairson's  knowledge,   threatened  against  it  relating  to  the  Development
Agreement or this  Agreement,  or the subject  matter  thereof and hereof;  (iv)
there is no default,  or event which with the passage of time would constitute a
default,  under the Development  Agreement by either Phairson,  or to Phairson's
knowledge,   by  Universities;   (v)  upon   consummation  of  the  transactions
contemplated  by this Agreement,  there will be no amounts owed  Universities by
Phairson or Phairson by Universities; and (vi) the Development Agreement, a true
and complete copy of which is attached as Exhibit A hereto, has not been amended
other than the amendment  effective June 1, 1999 (a form of which is included as
part of Exhibit A) and, upon  consummation of the  transactions  contemplated by
this  Agreement,  will be  enforceable  by  each  party  against  the  other  in
accordance with its terms (as amended hereby).

6.  REPRESENTATIONS AND WARRANTIES OF LMS. LMS hereby represents and warrants to
Universities and Phairson,  as of the date hereof,  that: (i) this Agreement has
been duly authorized by LMS, and the execution, delivery and performance of this
Agreement by LMS and the consummation of the transactions contemplated hereby do
not and will not  constitute a breach of the  Certificate  of  Incorporation  or
By-laws of LMS or any agreement to which LMS is a party or violate any provision
of any law to which it is subject; (ii) no consent of any person or governmental
entity  is  required  in  connection  with the  execution  or  delivery  of this
Agreement by LMS or the  consummation  by LMS of the  transactions  contemplated
hereby; and (iii) there are no actions, suits,  proceedings,  orders,  grievance
proceeding  or claims  pending  or to LMS'  knowledge,  threatened  against,  it
relating to this Agreement or the subject matter hereof and (iv) the Development
Agreement will be enforceable against LMS by Universities in accordance with its
terms (as amended hereby).

7.  ACKNOWLEDGMENT  AND AFFIRMATION.  The Swiss Federal  Institute of Technology
(ETHZ) ("ETHZ") and the University of Zurich ("UNIZH")  hereby  acknowledge that
the Development Agreement incorrectly listed an entity referred to as "Institute
of  Biomedical  Engineering,  ETH  Zurich and  University  of Zurich" as a party
instead  of ETHZ and  UNIZH  and that the  correct  parties  to the  Development
Agreement have always been Phairson  Medical Limited,  ETHZ and UNIZH.  ETHZ and
UNIZH  affirm  that the rights  and  obligations  of  "Institute  of  Biomedical
Engineering,  ETH Zurich and  University  of Zurich"  are, and have always been,
therights and  obligations  of, and have been and will be performed by, ETHZ and
UNIZH.

8. FURTHER  ASSURANCES.  The parties  hereto agree to timely  execute such other
agreements,   assignments,  consents,  waivers  or  other  documents  reasonably
necessary to further give effect to or evidence the agreements hereunder.

                                       6
<PAGE>

9. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and inure to the
benefit of Universities and LMS and their respective successors and assigns.

10.  GOVERNING LAW. This Agreement shall be deemed to be a contract entered into
pursuant  to the  laws  Switzerland  and  shall  in all  respects  be  governed,
construed, applied and enforced in accordance with the laws Switzerland (without
reference to its rules as to conflicts of law).  Exclusive place of jurisdiction
shall be Zurich, Switzerland.

11.  NOTICES.  All  notices  and other  communications  hereunder  and under the
Development Agreement shall be in writing and shall be deemed given if delivered
personally  or upon  sending a copy  thereof  by first  class or  express  mail,
postage prepaid, or by telegram (with messenger service specified), or reputable
overnight courier services, charges prepaid, to such party's address (or to such
party's telecopier):

         If to Universities, to:

                  University of Zurich
                  Unitectra Technology Transfer [UZ-04/201]
                  Mohrlistrasse 23
                  CH-8006 Zurich
                  Switzerland

                  Telephone: +41 1 634 44 01
                  Facsimile: +41 1 634 44 09

                  Attention:        Mr. Urs Dommann
                  (Mr.  Urs  Dommann  is  Administrative   Representative,   see
                  Development  Agreement for contact  information  for Technical
                  Representative)

         If to Phairson, to:

                  Phairson Medical Limited
                  Russell Bedford House, City Forum
                  250 City road
                  London, United Kingdom
                  EC1V 2QQ
                  Telephone:  +44 (0) 207 253 5573
                  Facsimile:  +44 (0) 207 253 5512

         If to LMS, to:

                  Life Medical Sciences, Inc.
                  PO Box 219
                  Little Silver, New Jersey 07739
                  Telephone/Facsimile: (732) 728-1769
                  Email: RPHICKEY@AOL.COM

                  Attention:  Robert P. Hickey, President

                                       7
<PAGE>

or to such other person or address as any of the foregoing  may have  designated
for that purpose by notice to the others.

12.  MISCELLANEOUS.  This Agreement constitutes the entire agreement between the
parties with respect to the subject matter hereof and may not be modified in any
manner or terminated  except by an instrument in writing executed by the parties
hereto.  Nothing in this Agreement shall constitute a waiver of, expansion of or
limitation  upon any of  Phairson's  or LMS'  rights  and  remedies  as  between
themselves  under  the Asset  Purchase  Agreement  and,  in the case of any such
conflict  between the terms of the Asset Purchase  Agreement and this Agreement,
the Asset Purchase Agreement shall control.  If any term,  covenant or condition
of this  Agreement  is held  to be  invalid,  illegal  or  unenforceable  in any
respect,  this  Agreement  shall  be  construed  without  such  provision.  This
Agreement may be executed in several  counterparts,  each of which  counterparts
shall  be  deemed  an  original  instrument  and  all of  which  together  shall
constitute a single  Agreement.  Whenever the context may require,  any pronouns
used herein shall include the corresponding masculine, feminine or neuter forms,
and the singular  form of nouns and pronouns  shall  include the plural and vice
versa.

                  [REMAINDER OF PAGE LEFT INTENTIONALLY BLANK]

                                       8
<PAGE>

     IN WITNESS  WHEREOF,  the parties  hereto have caused this  Agreement to be
duly executed as of the date first set forth above.

                         SWISS  FEDERAL  INSTITUTE  OF  TECHNOLOGY
                         UNIVERSITY  OF  ZURICH

                         By:_____________________________
                         Name:  Jeffrey  Hubbell
                         Title: Professor,  Director  IBT

                         By:_____________________________
                         Name:  Alexander  Borbely
                         Title: Professor,  Vice  President  Research
                                University  of  Zurich

                         By:_____________________________
                         Name:  Ueli  Suter
                         Title: Professor,  Vice  President  Research
                                ETHZ

                         PHAIRSON  MEDICAL  LIMITED

                         By:_____________________________
                         Name:
                         Title:

                         LIFE  MEDICAL  SCIENCES,  INC.

                         By:_____________________________
                         Name:
                         Title:

                                       9
<PAGE>

                                    EXHIBIT A
                             (Development Agreement)

                                       10
<PAGE>
   CONTRACT

                                     Between

                            PHAIRSON MEDICAL LIMITED

                                       and

    INSTITUTE OF BIOMEDICAL ENGINEERING, ETH ZURICH AND UNIVERSITY OF ZURICH

THIS  AGREEMENT,  having  an  Effective  Date of  March  1st 1999 is made by and
between Phairson Medical  Limited,  a corporation  having its principal place of
business  at  602  The  Chambers,   Chelsea  Harbour,  London,  SW10  OXF,  U.K.
(hereinafter  referred  to as  "CONTRACTOR")  and the ETH  Zurich  Institute  of
Biomedical Engineering, an academic laboratory located at Moussonstrasse 18, ETH
and University of Zurich, CH-8044 Zurich,  Switzerland  (hereinafter referred to
as "FOUNDATION").

WITNESSETH:

WHEREAS,  CONTRACTOR has identified and related  specific tasks  described under
ARTICLE I; and

WHEREAS, FOUNDATION is available and qualified to perform such tasks.

NOW  THEREFORE,  in  consideration  of the  promises  and the mutual  covenant's
contained herein, the parties agree as follows:

ARTICLE I - Scene of Work and Performance

     FOUNDATION  agrees to USE ITS BEST EFFORTS to perform the work  outlined in
     ATTACHMENT 1.

     FOUNDATION undertakes to report to CONTRACTOR at the dates set out below:

     FOUNDATION reporting dates:

     Date: May 1st 1999
     Date: July 1st 1999
     Date: September 1st 1999
     Date: November 1st 1999
     Date: January 1st 2000
     Date: March 1st 2000

     ARTICLE II - Period of Performance

     The  period of  performance  shall  commence  on  Effective  Date and shall
terminate on March 1st 2000 unless  extended by written mutual  agreement of the
parties hereto or terminated in accordance  with the provisions of Article XIII.
FOUNDATION shall notify CONTRACTOR, as soon as possible, of my reason that might
contribute to its failure to perform,  within the specified  performance period,
even if such reason is beyond its control and without fault or negligence of the
FOUNDATION.

     ARTICLE III - Consideration, Records and Billing Instructions

     1.   FOUNDATION shall be reimbursed by CONTRACTOR for all costs incurred in
          connection  with the Scope of Work in the amount of (SFr  158,000 ). A
          total  budget is presented  below,  with a  distribution  between cost
          categories shown approximately:

          Salary: see attached
          Expendable supplies: see attached
          NMR, see attached
          Etc.

     2.   Payments shall be made to FOUNDATION by CONTRACTOR  upon  presentation
          of invoices in accordance with the following schedule:

Date:  March 1st, 1999     SFr 39,500
Date:  June 1st, 1999      SFr 39,500
Date:  September 1st, 1999 SFr 39,500
Date:  December 1st, 1999  SFr 39,500

<PAGE>

     3.   Payment of any  additional  amounts must be agreed upon by  CONTRACTOR
          and  FOUNDATION  if the  Research  Project  is  extended  in  scope or
          duration.

     Whenever a payment becomes 60 days past due,  FOUNDATION reserves the right
to stop work  until  payment is  received.  Wire  payments  shall be made to the
following account:

                    BANK DETAILS NEEDED FOR WIRE INSTRUCTION

ARTICLE IV - Designated Representatives

<TABLE>
<CAPTION>
<S>                                              <C>
     1.   Technical Representative

          For CONTRACTOR:                        For FOUNDATION:
     Name: Didier Cowling                        Name: Prof. Jeffrey Hubbell
     Address: 602 The Chambers                   Address: Institute for Biomedical Engineering
              Chelsea Harbour                             ETH and University of Zurich
              London SW10 OXF                             Moussonstrasse 18
              U.K.                                        CH-8044
                                                          Switzerland

     Telephone: +44 171 349 3100                 Telephone: +41 1 632 4575
     Fax: +44 171 349 3101                       Fax: +41 1 632 1214
     Email: didier.cowling@phairson.com          Email: hubbell@biomed.mat.ethz.ch

2.    Administrative Representative

          For CONTRACTOR:                        For FOUNDATION:
     Name: Patrick Banks                         Name: Dr. Ulrich Steiner
     Address: 602 The Chambers                   Address: Office of the Vice President for Research
              Chelsea Harbour                             Technology Licensing
              London SW10 OXF                             ETH Zentrum
              U.K.                                        Ramistrasse 101, HG E 49
                                                          CH-8092
                                                          Switzerland

     Telephone: +44 171 349 3100                 Telephone: +41 1 632 2082
     Fax: +44 171 349 3101                       Fax: 41 1 632 1184
     Email: patrick.banks@phairson.com
</TABLE>

ARTICLE V - Reports

     FOUNDATION  will submit in a timely manner those  reports  described in the
Scope of Work  (Article I). Such reports shall be in the format agreed to by the
Designated Technical Representatives.

ARTICLE VI - Patents and Inventions

     1.   All  rights  and  title  to  all   inventions,   improvements   and/or
discoveries,  including  software,  know-how,  patent and other  intellectual or
industrial  property  conceived and/or made by one or more employees or students
of  FOUNDATION  in  the  performance  of  the  agreement,  shall  belong  to the
FOUNDATION.

          All  rights  and  title  to  all   inventions,   improvements   and/or
discoveries,  including  software,  know-how,  patent and other  intellectual or
industrial  property  conceived  and/or made jointly by one or more employees or
students  of  FOUNDATION  and  one  or  more  employees  of  CONTRACTOR  in  the
performance  of the  agreement,  shall  belong  jointly  to the  FOUNDATION  and
CONTRACTOR.

     2.   FOUNDATION  shall  promptly  notify   CONTRACTOR  of  any  inventions,
improvements,  discoveries,  software and the like conceived  and/or made during
the  performance  of  this  agreement  (hereafter   "Inventions").   Disclosures
submitted by FOUNDATION to CONTRACTOR shall be identified as confidential.

<PAGE>

     3. The filing,  prosecution  and  maintenance  of patent  applications  and
patents  covering  Inventions shall be carried out by the CONTRACTOR at its sole
discretion and expense.  In the event the CONTRACTOR elects not to apply for any
such patents,  the  foundation  shall have the option,  at its sole expense,  to
apply for the patents.  The CONTRACTOR  shall confirm its intention not to apply
for any such patents in writing.  FOUNDATION and CONTRACTOR  shall co-operate in
the filing, prosecution and maintenance of inventions.

     4. At the sole discretion of the CONTRACTOR,  the FOUNDATION  shall license
all rights to inventions,  improvements and/or discoveries,  including software,
know-how,  patent and other  intellectual or industrial  property resulting from
the sponsored work to the CONTRACTOR or to a party designated by the CONTRACTOR.
The license will be world-wide and exclusive. CONTRACTOR will pay FOUNDATION one
tenth of one percent of revenues received from third parties for sub-licences or
of any direct product sales for products  developed  subject to the license.  If
CONTRACTOR does not carry out any development work on any particular application
of said inventions, improvements and/or discoveries resulting from the sponsored
work for a period of two years or more,  FOUNDATION will have the right to enter
into good faith  negotiations  with  CONTRACTOR  to  license  and  develop  said
inventions, improvements and/or discoveries.

ARTICLE VII- Proprietary or Confidential Information

     Should  proprietary or  confidential  information or materials be exchanged
under this agreement,  each party agrees,  absent any special  provisions to the
contrary, to:

     1.   use its best efforts to receive and maintain in confidence any and all
          confidential or proprietary  information or materials delivered by one
          party hereto to the other party;

     2.   use confidential  information or proprietary  materials solely for the
          purpose  or  purposes  for  which  it was  disclosed  and for no other
          purpose whatsoever;

     3.   disclose confidential information and share proprietary materials with
          its employees, officers, agents, and representatives only on a need to
          know basis;

     4.   identify in writing all  confidential  or  proprietary  information or
          materials  as such at the  time of  disclosure  or  within  60 days of
          disclosure in the case of oral communication;

     5.   not release  confidential  or proprietary  information or materials to
          any third parties; and

     6.   dispose  of or  return  proprietary  or  confidential  information  or
          materials to the disclosing party when requested or upon expiration or
          termination of this contract. The period of protection of confidential
          information shall be 5 years from the effective date of this contract.

     Confidential information does not include any information which

     1.   is already  in the public  domain or which  becomes  available  to the
          public through no breach of confidentiality by the recipient;

     2.   was, as between  recipient  and  discloser,  lawfully  in  recipient's
          possession  on a  non-confidential  basis  prior to  receipt  from the
          discloser;

     3.   is received by recipient  independently  on a  non-confidential  basis
          from a third party free to lawfully  disclose such  information to the
          recipient; or

     4.   is independently developed by recipient without use of the discloser's
          confidential information:

The release of  confidential  information by the receiving  party to satisfy the
requirements  of  federal,  state or local  laws  shall  not be a breach of this
agreement.

ARTICLE VIII- Publication

     Subject to the  limitations of ARTICLES VI and VII,  FOUNDATION  shall have
the right to publish any  information or material  resulting from the conduct of
the Scope of Work.  FOUNDATION  shall furnish the CONTRACTOR  with a copy of any
proposed publication 30 days in advance of the proposed  submission.  CONTRACTOR
may request  FOUNDATION to delay  publication for a maximum of an additional 120
days in Order to pursue a patent on any Invention described in the manuscript.

<PAGE>

ARTICLE IX - Changes and Modifications

     Any changes to this  contract  must be made in writing and must be executed
by both  parties to indicate  acceptance  of the  modification.  Any change that
might  impact cost,  price,  or delivery  must be agreed to in writing  prior to
initiation of any work associated with the proposed change.

ARTICLE X- Assignment and Subcontracts

     Neither  performance,  nor payment,  involving the whole or any part of the
research  effort  described  under  Article  I may be  assigned,  subcontracted,
transferred,  or  otherwise  given or imposed on any other  party by  FOUNDATION
without the prior written consent of the CONTRACTOR.

ARTICLE XI - Mutual Responsibilities

     1.   Each  party  will  comply  with  all  applicable   governmental  laws,
          ordinances, rules and regulations in the performance of this contract.

     2.   Without  affecting or limiting any other  provisions of this contract,
          it is agreed each party's  obligation  under Article VII shall survive
          the expiration of this contract.

     3.   Each party to this  contract is an  independent  contractor  with each
          party solely  responsible for its own business  expenses and employees
          including   but  not  limited  to  salaries,   benefits,   insurances,
          withholding,  and worker  compensation and taxes.  Employees of either
          party shall not be deemed agents,  employees or representatives of the
          other party.

     4.   In the execution to this contract, the person whose signatures are set
          forth  are  duly  authorized  to  execute  the  contract  and bind the
          parties.

ARTICLE XII- Use of Names

     CONTRACTOR  shall not use the name of FOUNDATION and  FOUNDATION  shall not
use the name of CONTRACTOR in any news release, advertising or other publication
without the express  written  permission  from the other party.  Such permission
shall not be unreasonably withheld.

ARTICLE XIII - Termination

     Either party may terminate this contract at any time if:

     1.   The  other  party  materially  breaches  the  terms of this  contract;
          provided that the  non-breaching  party shall have given the breaching
          party written notice of such breach and the breaching party shall have
          failed to cure the same within 30 days after receipt of such notice.

     2.   There is the loss or departure of key personnel that would  jeopardize
          both the quality  and time of  performance  or would make  performance
          impractical with respect to the budget contemplated for this contract,
          and a mutually acceptable replacement cannot be found.

     3.   performance  of any part of this  contract by a party is  prevented or
          delayed  by  reason  of  Force  Majoure  and  cannot  be  overcome  by
          reasonable diligence to the satisfaction of the other party; or

     4.   The other party  ceases,  discontinues  or  indefinitely  suspends its
          business  activities related to the services to be provided under this
          contract,  or the other party  voluntarily or involuntarily  files for
          bankruptcy.

In the  event of  termination,  immediate  notice  shall  be given by the  party
requesting  termination  which should  specify both the reason and the effective
date of termination.

This  Agreement  may be  terminated  by the  CONTRACTOR  by  written  notice  to
FOUNDATION  to that  effect if, at any stage  after  expiration  of an initial 3
month  period from the  commencement  date,  and after a review of the  Research
which shall have been  completed as at that date, in the  reasonable  opinion of
CONTRACTOR  it is decided  that  continuation  of the  research is not likely to
produce  results that will be of sufficient  commercial  interest to CONTRACTOR.

Upon any  termination  except for breach of contract by  CONTRACTOR,  FOUNDATION
shall  deliver  to  CONTRACTOR  in  the  state  they  exist  as of the  date  of
termination,  all work, product,  materials,  including confidential information
and property  belonging to CONTRACTOR.  CONTRACTOR  shall,  within 30 days after
termination,  pay  FOUNDATION  all  payments  due as of the  effective  date  of
termination.

     For the avoidance of doubt, Article VI and VII shall survive termination.

<PAGE>

ARTICLE XIV - Applicable Law

     This contract shall be governed by the laws of Switzerland and the place of
jurisdiction shall be Zurich.

ARTICLE XIV - Entire Agreement

     This contract is intended by the parties as a final  written  expression of
their agreement and supersedes and replaces any prior oral or written agreement.
Any terms or conditions inconsistent with or in addition to terms and conditions
herein contained shall be void and of no effect unless specifically agreed to in
writing and signed by both parties.

     IN WITNESS  WHEREOF,  the  parties  hereto  have  caused  their  authorized
officials to execute this Subcontract as of the date(s) set forth below:

     CONTRACTOR                                  FOUNDATION

     /s/ Richard Franklin                        /s/  Jeffrey J A Hubbell

     Dr Richard Franklin
     CEO

Date 23 February 1999                            Date 26 Feb 1999

                                                 agreed, Zurich, March 2, 1999

                                                 /s/ Albert Waldvogel

                                                 Prof. Dr. Albert Waldvogel
                                                 Vice President for Research

<PAGE>

                        AMENDMENT TO RESEARCH AGREEMENT

Effective June 1, 1999 (the "Amendment Effective Date"), Institute of Biomedical
Engineering,  ETH Zurich and University of Zurich with offices at Moussonstrasse
18, CH-8044  Zurich,  Switzerland  ("Foundation")  and Phairson  Medical Ltd., a
corporation  organized  under  the  laws of  England,  with  offices  at 602 The
Chambers, Chelsea Harbour, London SW10 OXF ("Contractor") agree as follows:

ARTICLE I - BACKGROUND

SECTION  1.1  Foundation  and  Contractor  are  parties  to a  certain  Research
Agreement (the  "Agreement") made effective March 1, 1999 under which Foundation
and Contractor have entered into a research agreement (as defined therein).

SECTION 1.2 The parties desire to amend the Research Agreement to change the
dates Contractor pays to Foundation all costs incurred in connection with the
scope of work.

SECTION 1.3 Initially - and fully - capitalized terms shall have the same
meaning as in the Research Agreement.

ARTICLE II - AMENDMENT AND AGREEMENT

SECTION 2.1 Amendment to Article III, subsection 2 of the Research Agreement.
Article III, subsection 2 of the Research Agreement is hereby amended by
changing the dates of payment and replacing them with the following:

Article III, subsection 2. Payment shall be made to Foundation by Contractor
upon presentation of invoices in accordance with the following schedule:

Date: April 1st, 1999        SFr 39,500
Date: July 1st, 1999         SFr 39,500
Date: October 1st, 1999      SFr 39,500
Date: January 1st, 1999      SFr 39,500

SECTION 2.2 Continued Effect. The Research Agreement shall continue in force and
effect unchanged, except as specifically set forth in this document.

<PAGE>

IN WITNESS  WHEREOF,  the parties have each caused a duly authorized  officer to
sign this Amendment  Agreement on the date(s)  indicated  below, to be effective
the Amendment Effective Date.

Phairson Medical Ltd.                       Institute of Biomedical Engineering,
                                            ETH Zurich and University of Zurich
By:                                         By:
   _________________________________           _________________________________
   Dr. Richard Franklin                        Prof. Dr. Albert Waldvogel
   Chief Executive                             Vice President of Research

Date:                                       Date:
     _________________________________           _______________________________

<PAGE>

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