Exhibit 4.1

                               AMENDMENT AGREEMENT

     This  Amendment  Agreement  (this  "Agreement")  is being  entered  into on
December 31, 2001 by and among Pharmos  Corporation,  a Nevada  corporation (the
"Company"),  and  Millennium  Partners,  L.P.,  a Delaware  limited  partnership
("Millennium"),  and  St.  Alban's  Partners,  Ltd.  (each  a  "Purchaser,"  and
collectively,  the  "Purchasers").  Terms used herein but not defined shall have
the meaning set forth in that certain  related  Purchase  Agreement  dated as of
September 1, 2000 (the  "Purchase  Agreement")  by and among the Company and the
Purchasers, except where the context expressly indicates to the contrary.

                                    RECITALS:

     WHEREAS, pursuant to the Purchase Agreement, the Company sold and issued to
the   Purchasers  6%   Convertible   Debentures   due  February  28,  2002  (the
"Debentures"),  in the aggregate  principal amount of $6,000,000 at an aggregate
purchase price of $6,000,000, on the terms and conditions set forth therein; and

     WHEREAS,  in connection with the sale and issuance of the  Debentures,  the
Company also issued to the Purchasers warrants (the "Warrants"), exercisable for
shares of common stock, par value $.03, of the Company (the "Common Stock");

     WHEREAS,  pursuant to Section 19 of the  Debentures,  no Debenture  nor any
term thereof may be amended,  waived,  discharged  or  terminated  other than by
written instrument signed by the company and the holder thereof (the "Holder");

     WHEREAS,  in connection  with the Purchase  Agreement,  the Company and the
Purchasers  entered into that certain Escrow Agreement,  dated September 1, 2000
(the "Escrow Agreement,"), whereby each Purchaser deposited 50% of the amount of
its Purchase Price from each purchase of Debentures (the "Escrow Proceeds") into
a separate  escrow  account  maintained  by the Escrow  Agent (as defined in the
Escrow Agreement) for such Purchaser (a "Purchaser Escrow Account"); and

     WHEREAS,  pursuant to Section 12 of the Escrow  Agreement,  no provision of
the Escrow  Agreement may be amended or waived without the prior written consent
of the Company and Purchasers  holding a majority in the principal amount of the
Debentures; and

     WHEREAS,  in connection  with the Purchase  Agreement,  the Company and the
Purchasers  entered  into that  certain  Registration  Rights  Agreement,  dated
September 1, 2000 (the  "Registration  Rights  Agreement," and together with the
Purchase  Agreement,  the  Debentures,  the Warrants (as defined in the Purchase
Agreement),  and the Escrow  Agreement (the "Original  Transaction  Documents"),
whereby the Company  provided the Purchasers  with certain  registration  rights
with  respect  to the  Common  Shares (as  defined  in the  Registration  Rights
Agreement)  and the  Warrant  Shares  (as  defined  in the  Registration  Rights
Agreement); and

     WHEREAS,  the  Company  and  Purchasers  wish to amend  certain  terms  and
conditions  in  connection  with the  Debentures  and  amend  certain  terms and
conditions  of the  Escrow  Agreement  pursuant  to  Section  12 of  the  Escrow
Agreement;


<PAGE>

     NOW THEREFORE, the parties hereto agree as follows:

                                     TERMS:

     1. Conversion of the Debentures. The following changes shall be effected to
the terms and conditions of 50% of the Debentures  held by each Purchaser on the
date hereof (the "Initial Debentures"):

          (a) The term "Maturity Date" shall be defined as June 30, 2003.

          (b) Section  5(c) is hereby  amended to read as  follows,  "Subject to
     adjustments  pursuant  to  Sections  4 and 7,  this  Debenture  will have a
     conversion price (the "Conversion Price") equal to $2.15.

The fully paid,  validly issued and  non-assessable  shares of Common Stock into
which such  Debentures will be convertible  shall be hereinafter  referred to as
the  "Conversion  Shares."  The  remaining  50% of the  Debentures  held  by the
Purchasers on the date hereof shall hereinafter be referred to as the "Remaining
Debentures."  The shares of Common Stock issuable upon exercise of the Remaining
Debentures shall hereinafter be referred to as "Remaining Debenture Shares."

     2.  Remaining  Debentures.  The following  changes shall be effected to the
terms and conditions of the Remaining Debentures:

          (a) The term "Maturity Date" shall be defined as June 30, 2003.

          (b) Section  5(c) is hereby  amended to read as  follows,  "Subject to
     adjustments  pursuant  to  Sections  4 and 7,  this  Debenture  will have a
     conversion price (the "Conversion Price") equal to $2.63

     3. Escrow Agreement.

          (a)  Section  2 of the  Escrow  Agreement  is  hereby  amended  in its
     entirety to read as follows:

     "Upon  conversion  by an Investor,  individually  or in the aggregate of at
least  50.00% of the initial  principal  amount of the  Debentures  held by such
Investor plus the interest  that has accrued  thereon since the date of issuance
of the  Debentures,  the  Investor  and the Company  shall  promptly  thereafter
execute a joint  certificate  to the  Escrow  Agent (as  defined  in the  Escrow
Agreement) certifying that at least 50.00% in aggregate principal amount of such
Investor's  Debentures  plus the  interest  that has accrued  thereon  since the
issuance  of the  Debentures  has been  converted  by the  Investor  (a  "50.00%
Conversion  Notice").  Upon receipt of a 50.00%  Conversion  Notice,  the Escrow
Agent,  shall release the Escrowed  Proceeds  received from such Investor to the
Company."

          (b)  The  parties  agree  that  after   execution  of  this  Amendment
     Agreement,  upon receipt by each Purchaser of all of its Conversion  Shares
     (upon conversion of the Initial Debentures) and Remaining  Debentures,  all
     proceeds held in escrow may be released.  The


                                       2
<PAGE>

     parties  acknowledge  that the  Escrow  Agent  may rely  upon  certificates
     executed  by each of  Purchasers  to the effect  that it has  received  its
     Conversion  Shares and  Remaining  Debentures  in  releasing  the  Escrowed
     Proceeds.

     4.  Registration  Rights.  The Company hereby represents that the Company's
Registration  Statement (No.  333-46818) (the "Registration  Statement"),  which
covers the  disposition  of  Registrable  Securities  pursuant  to the  Original
Transaction  Documents,  has  been  declared  effective  by the  Securities  and
Exchange  Commission  and is  effective  as of the  date  hereof,  and  that the
prospectus to be delivered in connection therewith is current and deliverable.

          (a) The  Company  hereby  acknowledges  that all shares  received  and
     issuable  upon  conversion  of the  Debentures,  including  those  issuable
     pursuant to Section 1 of this  Amendment  Agreement and those issuable upon
     conversion of the  Remaining  Debentures,  shall be considered  Registrable
     Securities  for the  purpose  of the  Registration  Rights  Agreement.  The
     Conversion  Shares are registered  pursuant to the Registration  Statement,
     which covers the disposition of Registrable Securities issuable pursuant to
     the Original Transaction  Documents,  and will be issued free of legend and
     stop-order.  The Company acknowledges that the Registration  Statement also
     covers  the  resale of an  additional  1,421,945  shares  of  Common  Stock
     issuable upon conversion of the Remaining Debentures, and such shares, when
     issued  will be issued  free of legend and stop  order.  The  Company  also
     covenants and agrees to register an additional  1,084,519  shares of Common
     Stock on an additional registration statement (the "Additional Registration
     Statement")  in  accordance  with  the  provisions  of  Section  2  of  the
     Registration  Rights  Agreement,  to cover  the  resale  of any  additional
     Remaining Debenture Shares not covered by the Registration  Statement.  Any
     delays  in  obtaining  the  effectiveness  of the  Additional  Registration
     Statement  will  result in the  obligation  of the  Company  to make  Delay
     Payments,  as provided in the  Registration  Rights  Agreement,  as well as
     result in the other  rights  and  remedies  contained  in the  Registration
     Rights Agreement.  Pursuant to Section 3.10 of the Purchase Agreement,  the
     Company  shall be required to reserve and keep  available  for  purposes of
     conversion of the Remaining  Debentures  no less than  1,879,848  shares of
     authorized  but  unissued  shares of Common  Stock,  which  number shall be
     appropriately  adjusted for any stock split,  reverse split, stock dividend
     or  reclassification  of the Common Stock. The parties acknowledge that the
     foregoing use of specific  numbers in this Section 4(a) does not constitute
     any waiver of the  Company's  obligations  to  reserve a greater  number of
     shares  for  purposes  of  conversion  of the  Remaining  Debentures  or to
     register a greater number of Remaining  Debenture  Shares in the event of a
     downward  adjustment in Conversion Price pursuant to Section 4 or Section 7
     of the Remaining Debentures.

          (b) The Company shall, as expeditiously  as reasonably  possible after
     the date  hereof,  and in any event within 30 days  hereafter,  prepare and
     file the Additional Registration Statement on Form S-3 under the Securities
     Act of 1933,  as  amended  (the  "Act"),  or in the  event the  Company  is
     ineligible to use such form,  such other form as the Company is eligible to
     use under the Act. The  Additional  Registration  Statement,  to the extent
     allowable  under the Act and the rules  promulgated  thereunder  (including
     Rule 416),  shall state that the  Additional  Registration  Statement  also
     covers  such  number of  Additional  Shares of Common  Stock as may  become
     issuable to prevent dilution  resulting from stock splits,  stock dividends
     or similar  events.  The  Company  shall use its best  efforts to cause the
     Additional  Registration  Statement  to be  declared  effective  as soon as
     practicable, and in any event prior to the earlier of (i) 75 days


                                       3
<PAGE>

     following  the date  hereof  or, in the event the  Additional  Registration
     Statement  is  reviewed by the SEC,  by April 15,  2002,  or (ii) five days
     after SEC clearance to request acceleration.  The earlier of such two dates
     shall be deemed the  Effectiveness  Deadline for purposes of the rights and
     remedies contained in the Registration Rights Agreement.  The Company shall
     provide the holders of Remaining  Debenture  Shares and their legal counsel
     reasonable  opportunity to review the Additional  Registration Statement or
     any amendment or supplement thereto prior to filing.

          (c) Notwithstanding  paragraph 4(b) above, the Company's obligation to
     file  the  Additional  Registration  Statement  shall be  suspended  if the
     Company  complies  in  full,  from  the date  hereof,  with  the  following
     covenant:

               (i) From the date hereof until March 1, 2002,  the Company  shall
          not  effect any  transactions  or reprice  any  existing  instruments,
          resulting  in the  issuance  or sale of  shares  of  Common  Stock  or
          Convertible  Securities  where the Per Share Selling Price (as defined
          in the  Debentures)  is less than $2.63 (as such price may be adjusted
          for subsequent stock-splits, reverse splits and consolidations), other
          than financings involving Millennium Partners, L.P.

     If the foregoing  covenant is not complied with in full, the obligation set
forth in paragraph 4(b) shall apply as of the date hereof.

          (d) The Company hereby  acknowledges  that for purposes of Rule 144 of
     the Act,  the  holding  period  of shares of  Common  Stock  issuable  upon
     conversion  of the  Debentures,  including  the  Conversion  Shares and the
     Remaining Debenture Shares, shall date from September 1, 2000.

          (e)  Neither  the  Company,  nor  any  of its  affiliates,  nor to its
     knowledge any person acting on its behalf has,  directly or indirectly made
     any  offers or sales of any  security  or  solicited  any offers to buy any
     security,  under  circumstances  that  would  require  registration  of the
     Debentures (including the Initial Debentures and Remaining Debentures), the
     Warrants,  the Common Shares,  the Warrant Shares, the Conversion Shares or
     the  Remaining  Debentures  Shares  under  the  Act.  The  issuance  of the
     Debentures  (including the Initial  Debentures  and Remaining  Debentures),
     Warrants, Common Shares, Warrant Shares, Conversion Shares or the Remaining
     Debentures  Shares to the Purchasers  will not be integrated with any other
     issuance of the Company's securities (past, current or future) for purposes
     of any rule that requires stockholder approval,  including the rules of the
     NASD.

     5. Press Release and Form 8-K. As soon as practicable  but in no event more
than two (2) Trading Days  following the execution of this  Amendment  Agreement
and the  satisfaction of the conditions in Section 8 by all of the parties,  the
Company  shall  issue a  press  release  in a form  mutually  agreeable  to both
parties.  If the Company fails to issue the press release within two (2) Trading
Days following such date, the Purchasers may issue a press release  covering the
transaction  and  complying  with  any  legal  requirement   applicable  to  the
Purchasers.  In addition,  within two (2) Trading Days  following such date, the
Company shall file a Form 8-K with the SEC,  which  discloses  the  transactions
related  to this  Amendment  Agreement,  in a form  mutually  agreeable  to both
parties. The Purchasers shall have the opportunity to review such Form 8-K prior
to its filing.


                                       4
<PAGE>

     6. Due Authorization. The Company hereby represents and warrants to each of
the  Purchasers  as of the  date  hereof  that  the  Company  has all  requisite
corporate power and authority to enter into and perform this Amendment Agreement
and the  transactions  contemplated  hereby and  thereby.  The  Company  further
represents  and warrants that this Amendment  Agreement  constitutes a valid and
binding obligation of the Company  enforceable against the Company in accordance
with its terms,  except as such  enforceability  may be  limited  by  applicable
bankruptcy, insolvency, reorganization,  moratorium, liquidation or similar laws
relating to, or affecting  generally the enforcement of,  creditors'  rights and
remedies or by other equitable principles of general application.

     7. Expenses. The Company and the Purchasers shall each bear their own legal
expenses in connection with their entry into this transaction.

     8. Closing Documents;  Conditions. (a) Contemporaneously with the execution
and delivery of this Amendment Agreement,  the Company shall deliver each of the
Closing Documents (as defined below) to the Purchasers.  The obligations of each
Purchaser  hereunder  are  subject to the  Purchasers'  receipt of such  Closing
Documents.  The requirement that the Purchasers receive the Closing Documents is
for each Purchaser's  benefit and may be waived by each Purchaser at any time in
writing  in its sole  discretion.  "Closing  Documents"  means (v) an opinion of
independent counsel of the Company, in the form annexed hereto as Exhibit A; (w)
an executed copy of the  officer's  certificate  in the form attached  hereto as
Exhibit B; (x) the Initial  Debentures  issued by the Company in accordance with
this Amendment Agreement; and (y) the Remaining Debentures issued by the Company
in accordance with this Amendment  Agreement.  Promptly  following the execution
and delivery of this Amendment  Agreement,  the  Purchasers  shall tender to the
Company their respective certificates representing the Debentures prior to their
amendment pursuant to this Amendment Agreement.

          (b) The  obligations of both the Company and the  Purchasers  shall be
     subject to the receipt by the Company, by no later than January 4, 2002, of
     a waiver  from  Strong  River  Investments,  Inc.,  in form  and  substance
     satisfactory to the Company and the Purchasers,  waiving its  anti-dilution
     rights under Section 7(a) of its Debenture with respect to the  adjustments
     on  Conversion  Prices  effectuated  pursuant  to  Sections 1 and 2 of this
     Agreement.

     9. Miscellaneous.

          (a) Article 7 of the Purchase Agreement is hereby  incorporated herein
     by  reference  with such changes as may be  necessary  mutatis  mutandis to
     conform to this Amendment Agreement.

          (b) Except as set forth above, the Original Transaction  Documents and
     the terms thereof shall remain unmodified and in full force and effect.

          (c)  The  Company  hereby   represents   that  all  of  the  Company's
     representations  and  warranties  contained  in  the  Original  Transaction
     Documents were true and correct as of September 1, 2000 and,  except as set
     forth on  Schedule 1 hereto,  are true and  correct  as of the date  hereof
     (except for  representations  and  warranties  made as of an earlier  date,
     which shall be true and correct as of such date).


                                       5
<PAGE>

          (d) The Company hereby represents that it has performed all agreements
     and satisfied all conditions required to be performed or satisfied prior to
     the date hereof by the Original Transaction Documents when and as required.

          (e) The Company hereby  acknowledges and agrees that it has no pending
     claims  against  any of the  Purchasers  and hereby  releases,  acquits and
     forever discharges each of the Purchasers from any and all actions,  causes
     of action, claims, demands,  damages,  judgments,  debts, dues and suits of
     every kind, nature and description whatsoever,  which the Company ever had,
     now has or may have  against any  Purchaser  on or by reason of any matter,
     cause or thing whatsoever through the date hereof.

          (f) The Company hereby represents that no Event of Default (as defined
     in the Debentures) has occurred,  is likely to occur or is threatened,  and
     no event has occurred  which  constitutes  or would  constitute an Event of
     Default with notice or the passage of time or both, as of the date hereof.

          (g)  This  Amendment   Agreement  may  be  executed  in  two  or  more
     counterparts,  all of which when taken together shall be considered one and
     the same Amendment  Agreement and shall become effective when  counterparts
     have been signed by each party and delivered to the other parties, it being
     understood  that all  parties  need not sign the same  counterpart.  In the
     event that any  signature  is delivered  by  facsimile  transmission,  such
     signature  shall  create a valid and binding  obligation  of the  executing
     party with the same force and effect as if such  facsimile  signature  page
     were an original thereof.

          (h) In consideration of the Purchasers' execution and delivery of this
     Amendment  Agreement,  and  in  addition  to all  of  the  Company's  other
     obligations  under the Original  Transaction  Documents,  the Company shall
     defend,  protect,  indemnify  and hold harmless the  Purchasers  and all of
     their  partners,  officers,  directors,  employees,  members  and direct or
     indirect  investors  and any of the  foregoing  persons'  agents  or  other
     representatives   (including,   without   limitation,   those  retained  in
     connection with the transactions  contemplated by this Amendment Agreement)
     (collectively,  the  "Indemnitees")  from and against any and all  actions,
     causes  of  action,  suits,  claims,   losses,  costs,   penalties,   fees,
     liabilities and damages, and expenses in connection therewith (irrespective
     of  whether  any  such  Indemnitee  is a  party  to the  action  for  which
     indemnification  hereunder is sought), and including reasonable  attorneys'
     fees and  disbursements  (the "Indemnified  Liabilities"),  incurred by any
     Indemnitee  as a result  of,  or  arising  out of, or  relating  to (a) any
     misrepresentation  or breach of any  representation or warranty made by the
     Company in this  Amendment  Agreement or any other  certificate or document
     contemplated hereby or thereby,  (b) any breach of any covenant,  agreement
     or obligation of the Company  contained in this Amendment  Agreement or any
     other certificate or document contemplated hereby or thereby, (c) any cause
     of action, suit or claim brought or made against such Indemnitee by a third
     party and arising out of or  resulting  from (i) the  execution,  delivery,
     performance,  breach  by the  Company  or  enforcement  of  this  Amendment
     Agreement or any other  certificate,  instrument  or document  contemplated
     hereby or thereby, (ii) any transaction financed or to be financed in whole
     or in part,  directly or  indirectly,  with the proceeds of the issuance of
     the Debentures (including the


                                       6
<PAGE>

     Initial  Debentures  and Remaining  Debentures),  the Warrants,  the Common
     Shares,  the  Warrant  Shares,  the  Conversion  Shares  or  the  Remaining
     Debentures  Shares or (iii) the  status of the  Purchaser  or holder of the
     Debentures (including the Initial Debentures and Remaining Debentures), the
     Warrants,  the Common Shares,  the Warrant Shares, the Conversion Shares or
     the Remaining  Debentures  Shares as investors in the Company,  and (d) the
     enforcement of this Section.  Notwithstanding  the  foregoing,  Indemnified
     Liabilities shall not include any liability of any Indemnitee to the extent
     it arises out of such Indemnitee's willful misconduct, gross negligence, or
     fraudulent  action(s).  To the extent that the foregoing undertaking by the
     Company may be  unenforceable  for any reason,  the Company  shall make the
     maximum  contribution  to the  payment  and  satisfaction  of  each  of the
     Indemnified Liabilities which is permissible under applicable law.

          (i) For the  avoidance  of doubt,  the  parties  acknowledge  that the
     Conversion  Shares and the Remaining  Debentures Shares shall be considered
     to be Common Shares, as defined in the Original  Transaction  Documents and
     Registrable Securities as defined in the Registration Rights Agreement, and
     the Initial Debentures and the Remaining  Debentures shall be considered to
     be Debentures as defined in the Original Transaction Documents.

          (j) The  parties  acknowledge  and agree that the  Purchasers  are not
     agents,  affiliates  or partners of each other,  that all  representations,
     warranties,  covenants  and  agreements  of the  Purchasers  hereunder  are
     several and not joint,  that no Purchaser shall have any  responsibility or
     liability for the representations,  warrants, agreements, acts or omissions
     of any  other  Purchaser,  and  that any  rights  granted  to  "Purchasers"
     hereunder shall be enforceable by each Purchaser hereunder.

          (k) This Amendment Agreement,  the Original Transaction  Documents and
     the  agreements  and  other  documents   referred  to  herein  and  therein
     constitute the full and entire  understanding  and agreement of the parties
     with  respect to the matters  covered  hereby and thereby,  supercedes  any
     prior understanding,  memoranda or other written or oral agreements between
     or among any of them respecting the matters covered hereby and thereby and,
     except as specifically set forth herein or therein, neither the Company nor
     any Purchaser makes any representation,  warranty,  covenant or undertaking
     with respect to such matters.  No provision of this Amendment Agreement may
     be waived or amended other than by a written instrument signed by the party
     against whom enforcement of any such amendment or waiver is sought.

          (l) Notices to the parties  hereto shall be sent to the  addresses set
     forth in the Purchase Agreement.

                       *** Signatures on the next page ***


                                       7
<PAGE>

ACCEPTED AND AGREED TO AS OF
THE DATE FIRST ABOVE WRITTEN:

COMPANY:

PHARMOS CORPORATION


By:       /s/ Robert W. Cook
   -------------------------------------
          Name: Robert W. Cook
          Title:   EVP, CFO

PURCHASERS:

MILLENNIUM PARTNERS, LP
By:   Daniel Cardella


By:       /s/ Daniel Cardella
    ------------------------------------
          Name:  Daniel Cardella
          Title:  Portfolio Manager


ST. ALBANS PARTNERS LTD.
By:

By:       /s/ John B. Wagner
     -----------------------------------
           Name:   John B. Wagner
           Title:  Managing Partner

                     [Signature Page to Amendment Agreement]


<PAGE>

                                                                      SCHEDULE 1


                    Updates to Representations and Warranties

     1. As of November 1, 2001,  there were  55,356,307  shares of the Company's
Common Stock outstanding.

     2. In October  2001,  the Company sold it  ophthalmic  business to Bausch &
Lomb  Incorporated,  as  reported  in the  Current  Report  of Form 8-K filed on
October 16, 2001.