Exhibit 10.3

 

Pharmos Corporation

99 Wood Avenue South, Suite 311

Iselin, NJ 08830

 

January 3, 2008

 

Haim Aviv

 

 

Re:

Pharmos Corporation (“Pharmos” or the “Company”)

 

Dear Haim:

 

This letter confirms the agreement between Pharmos Corporation (the “Company”)
and you relating to your resignation, effective as of the date hereof, from the
Board of Directors of the Company (the “Board”). As we discussed, you are not
resigning because of any disagreement on any matter relating to the Company’s
operations, policies or practices.

 

You have generously agreed to serve as a consultant to the Company following
your resignation through the 2008 annual meeting of shareholders. In connection
therewith, you will make yourself available in person or by telephone, upon
reasonable prior request, to the Board and its committees, as well as to members
of senior management, on matters relating to general business development in
your areas of expertise. If we request you to appear periodically for meetings
or the like, we will reimburse you for your reasonable expenses.

 

In consideration for your services, we will issue to you 28,572 shares of common
stock of the Company, the resale of which by you is covered by a current
registration statement on Form S-8. The shares are being issued to you in lieu
of a cash consulting fee of $20,000, and the number of shares equals the amount
of that fee, divided by $0.70, which is the conversion price of the convertible
debentures being issued today by the Company to certain investors in a private
placement transaction. We acknowledge that pursuant to your Resignation
Agreement with the Company dated as of March 20, 2007, all stock options then
held by you have already become fully vested as of such date and will not expire
until their respective expiration dates.

 

By this letter, we confirm to you that you will continue to be covered by the
Company’s existing directors’ and officers’ liability insurance for your acts as
a director of the Company through the date hereof, and further, that the
Company’s By-Laws currently provide for indemnification of you in such capacity
by the Company.

 

We have also agreed to provide you with advance copy of, and the ability to
review, the required public disclosure of your resignation.

 

This agreement has been approved by the Board.

 

Thank you for the important and significant contributions you have made to
Pharmos during your tenure as a director.

 

PHARMOS CORPORATION

 

By:________________________

 

S. Colin Neill,

Chief Financial Officer

AGREED AND ACCEPTED:

 

____________________

Haim Aviv