EMPLOYMENT AGREEMENT


     THIS  AGREEMENT  (the  "agreement")  is made and effective as of the 15 May
1997,  by and  between  EuroBiotech  Group,  Inc,  a Delaware  Corporation  (the
"Company"), and Stuart Smith (the "Executive").

     WHEREAS,  the Company  desires to retain the Executive in its employ as the
Executive  Vice  President  of the  Company  for  the  period  provided  in this
Agreement, and the  Executive  has  agreed to  employment  with the  Company  in
accordance with the contractual terms and conditions set forth below;

     WHEREAS, the Company and the Executive have discussed and the Executive has
agreed that this Agreement supersedes any and all agreements,  oral and written,
between the parties hereto with respect of the subject hereof, and

     WHEREAS, this Agreement is intended to, and shall, set forth the definitive
agreement of the parties.

     NOW, THEREFORE,  for and in consideration of the recitals and premises, and
the promises,  covenants and agreements  contained  herein,  and intending to be
legally bound hereby, the parties hereto agree as follows:

     1. Employment.  The Company hereby employs the Executive, and the Executive
hereby accepts such employment with the Company,  for the term of employment set
forth in  Section 2 hereof,  all upon the terms  and  conditions  hereafter  set
forth.

     2. Term.  Employment shall be for a term commencing on the date hereof and,
subject to prior  termination under Section 8, Section 9, Section 10, Section 12
or Section 13 hereof,  expiring December 31, 1999.  Notwithstanding the previous
sentence,  (commencing  December 31,  1999),  the term of this  Agreement  shall
automatically  be extended for one additional year upon the terms and conditions
set forth herein,  unless either party to this  Agreement  gives the other party
written notice  (delivered in accordance  with Section 21 hereof and at least 90
days prior to December 31, 1999) of such party's intention not to further extend
the term of this Agreement. For purposes of this Agreement, any reference to the
"term" of this  Agreement  shall  include the  original  term and any  extension
thereof.

      3. Duties of the  Executive.  The  Executive  shall serve as the Executive
Vice President of the Company. The Executive shall perform such executive duties
as a Executive Vice President would normally  perform or as otherwise  specified
in the  By-Laws of the Company as in effect on the date of this  Agreement,  and
shall perform, in addition thereto, such other reasonable duties as the CHAIRMAN
may request.  Except as may otherwise be approved in advance by the CHAIRMAN and
except during vacation periods and periods of absence due to sickness,  personal
injury or other disability,  the Executive shall devote substantially all of his
normal  working  time and his best  efforts to the  performance  of this  duties
hereunder.   Notwithstanding  the  foregoing,  nothing  contained  herein  shall
preclude  the  Executive  from (i) serving on the boards of  directors  or other
companies  or  organisations  with the approval of the Board of Directors of the
Company (the  "Board")  (not to be  unreasonably  withheld) or (ii) pursuing his
personal,  financial  and legal  affairs  provided  that such  activity does not
materially  interfere  with  the  performance  of  the  Executive's  obligations
hereunder.

     4. Compensation.

     a)  During  the  term of  this  Agreement,  the  Company  shall  pay to the
Executive a base salary and such bonus as may be awarded to the  Executive  from
time to time by the Board pursuant to Section 4(b) hereof.

     b) For the  period  commencing  on the date of this  Agreement,  and ending
December 31, 1999 the  Executive's  base salary shall be deemed to be $80,000 on
an annualised  basis.  The Executive's base salary may be increased from time to
time by the Board. During the term of the Agreement, Executive's salary shall be
reviewed at least annually by the Board to determine  whether an increase beyond
the Executive's base salary is warranted and appropriate.


<PAGE>


     Except as set forth in this Section 4, such  compensation  shall he payable
at the times and in the manner  consistent with the Company's  general  policies
regarding  Compensation of executive employees,  but in no event less frequently
than bi-monthly.

     c) In  additional to the base salary  provided by Section 4(b) hereof,  the
Executive  shall be  eligible  annually  to  receive  any  incentive  bonus (the
"Bonus"),  that the  Board may  grant to him  based on the  Company's  executive
compensation  plan then in effect,  based on the  CHAIRMAN's  assessment  of the
Executive's individual performance, which decision shall be made by the Board in
its sole discretion.  The CHAIRMAN shall give written notice to the Executive of
the grant of any such Bonus and the amount  thereof upon  direction of the Board
and  Compensation  Committee.  Such  Bonus  shall be payable on the next date on
which the  Executive is entitled to receive a payment of his base  compensation.
The Board may from time to time authorise such  additional  compensation  to the
Executive, in cash, property,  options or warrants as the Board may determine in
its sole discretion to be appropriate.

     5) Executive Benefits

     a) In  addition  to the  compensation  described  in Section 4, the Company
shall make available to the Executive and his eligible  dependants such benefits
which  are  comparable  to those  provided  to other  executive  and  management
employees   of  the   Company,   including   without   limitation,   any   group
hospitalisation, health, dental care or sick leave plan, life or other insurance
or death  benefit  plan,  travel or  accident  insurance,  retirement  income or
pension  plan,  employee  stock  option  plan or other  present or future  group
employee  benefit plan or programme of the Company for which key  executives are
or shall become eligible,  and Executive shall be eligible to receive during the
period of his employment  under this  Agreement,  and, to the extent provided in
Section  11 and  Section 13 hereof,  during any  subsequent  period for which he
shall be  entitled  to receive  payment  from the  Company  under  Section 11 or
Section 13 hereof,  all benefits  for which key  executives  are eligible  under
every such plan or program to the extent permissible under the general terms and
provisions  of such  plans and  programmes  in  accordance  with the  provisions
thereof  provided  that expect,to the extent  specifically  set forth in Section
4(c),  11, 12 and 13, the  Executive  shall not be permitted to  participate  in
management  incentive  programs or in  termination  pay programs.  The Executive
shall be eligible to participate in any such plan or program under the terms and
conditions  applicable  to other  executive  and  management  employees and in a
manner  commensurate  with the Executive's  position and level of responsibility
with the Company as  compared to the  position  and level of  responsibility  of
other  executive  and  management  employees of the Company as determined by the
Board in its sole discretion.

     b) In  addition  to any  life  insurance  coverage  made  available  to the
Executive under Section 5(a) hereof the Company shall provide,  at its sole cost
and expense,  to the Executive a term life insurance contract on the Executive's
life in an amount one (1) time his annual  base  compensation,  the  proceeds of
which shall be payable to such beneficiary as Executive may designate.

     c) The Company shall allow the Executive to  participate in the Company car
scheme during the term of this Agreement.

     d) The Executive shall be entitled to 4 weeks paid vacation per year, which
shall be pro-rated for partial years. Executive may carry over from year to year
up to 500 hours of unused vacation time.  Notwithstanding anything herein to the
contrary, the Executive may not take more than two (2) weeks vacation during any
twelve (12) week period  without the prior  written  permission  of the Company,
which shall not be unreasonably withheld.

     6. Expenses

The Company shall also pay or reimburse the  Executive  for all  reasonable  and
necessary  expenses  incurred by the Executive in connection  with his duties on
behalf of the company in accordance with the general policies of the Company and
his employment by the Company pursuant to this Agreement.


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<PAGE>


     7. Place of Performance.  In connection with his employment by the Company,
unless  otherwise  agreed by the Executive,  the Executive shall be based at the
principal  executive  offices  of the  Company,  except  for  travel  reasonable
required for Company business.

     8. Termination.  The Company may terminate Executive's employment hereunder
for Cause which shall mean;

     a) The  Executive's  conviction  by,  or  entry  of a  plea  of  guilty  or
nolocontendere  in, a court of competent  and final  jurisdiction  for any crime
involving  moral  turpitude or punishable by  imprisonment  in the  jurisdiction
involved   (provided  that  if  the   Executive's   conviction  is  subsequently
overturned,  and the  Company  had  terminated  the  Executive  pursuant to this
Section  8(a),  such  termination  shall be deemed to be  without  Cause and the
Executive  shall be entitled to receive the  payments  and benefits set forth in
Section 11, together with interest at the then current prime rate as reported in
the Wall Street Journal, from the date such payments are made to the Executive);

     b)  Executive's  breach of any of the covenants  contained in Section 25 of
this Agreement;

     c)  Executive's  commission  of  an  act  of  fraud,  whether  prior  to or
subsequent to the date hereof, upon Employer,

     d) Executive's continuing repeated wilful failure or refusal to perform his
duties as required by this Agreement,  provided, that termination of Executive's
employment  pursuant  to  this  subparagraph  (d)  shall  not  constitute  valid
termination for cause unless  Executive shall have first received written notice
from the Board  stating with  specificity  the nature of such failure or refusal
and  affording  Executive  at least  fifteen  (15)  days to  correct  the act or
omission complained of;

     e) Gross negligence, insubordination, or material violation by Executive of
any duty of loyalty to the Company or any other material  misconduct on the part
of Executive,  provided that termination of Executive's  employment  pursuant to
this  subparagraph (e) shall not constitute  valid  termination for cause unless
Executive  shall have first received  written notice from the Board stating with
specificity  the nature of such  failure or refusal and  affording  Executive at
least fifteen (15) days to correct the actor omission complained of;

     f) A material  breach of this  Agreement by the  Executive as determined by
the Company after the  Executive  has been given written  notice of such alleged
breach,  and not less than thirty (30) days to cure such alleged  breach or such
longer period as may be reasonably  necessary to cure such breach  provided that
the Executive is diligently pursuing such cure.

     9) Resignation

     a) In the  event  that  (i)  the  Company  shall  during  the  term of this
Agreement (A) fail to continue the Executive as Executive  Vice President of the
Company,  (B)  reduce the  Executive's  base  salary  below the  minimum  amount
specified in Section 4(a) without the  Executive's  prior written  consent,  (C)
violate any material term of this  Agreement,  provided that the Executive gives
the Company  written notice of such violation and the Company fails to cure such
violation  within 30 days or such longer  period  (the "Cure  Period") as may be
reasonably  necessary  to cure  such  violation  provided  that the  Company  is
diligently pursuing such cure, then the Executive,  at his sole option, may give
notice to the Company at any time within ten (10) days after the  expiration  of
the  Cure  Period  of his  election  to  resign  and  terminate  this  Agreement
("Permitted  Resignation")  effective  immediately  upon  receipt of such notice
(delivered in accordance  with Section 21 hereof),  or effective upon such other
date (not later than ten (10) days following such notice) that the Executive may
designate in such notice; (ii) the Executive is required to move more than fifty
[50] miles from the then place of performance of the Executive, as defined under
Section  7  herein,  or due to a  "Change  of  Control,"  which  shall  mean the
occurrence during the term of this Agreement of any the following events;

     A) the Company is merged,  consolidated or reorganised into or with another
corporation  or  other  legal   persona,   and  as  a  result  of  such  merger,
consolidation  or  reorganisation  less than fifty percent (50%) of the combined
voting power of the then outstanding securities entitled to vote


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<PAGE>


generally in the election of directors  ("Voting  Stock") of such corporation or
person  immediately  after such  transaction  are held in the  aggregate  by the
holders of Voting Stock of the Company immediately prior to such transaction; or

     B) The Company sells or otherwise transfers all or substantially all of its
assets to another  corporation  or other legal  person,  and as a result of such
sale or transfer less than fifty  percent (50%) of the combined  voting power of
the ten outstanding Voting Stock of such corporation or person immediately after
such sale or transfer is held in the aggregate by the holders of Voting Stock of
the Company immediately prior to such sale or transfer, or

     C) If, during any period of two consecutive  years,  (i) individuals who at
the  beginning of any such period  constitute  the  Directors of the Company and
(ii) such other  persons as are  nominated or elected by a vote of the Directors
of the  company,  collectively,  cease for any reason to  constitute  at least a
majority of the Directors of the Company;  provided,  however, that for purposes
of this clause  9(b)(C) each Director who is first elected,  or first  nominated
for election by the Company's  stockholders,  by a vote of the Director's of the
Company (or a committee thereof) then still in office who were Director's of the
company  at the  beginning  of any such  period  will be  deemed  to have been a
Director of the company at the beginning of such period.

     10. Death.  The term of this Agreement  shall terminate on the death of the
Executive.


     11.  Termination  Payments  and  Benefits.  If the  Executive's  employment
hereunder is  terminated  by the  Executive by Permitted  Resignation  or by the
Company  other than for Cause,  prior to the end of the term of this  Agreement,
then the Company shall be obligated to pay to the Executive certain  termination
payments and make available certain benefits as follows:

     a)  Termination  Payment. The Company shall pay to the Executive a lump sum
in cash,  payable within ten (10) business days after the effective date of such
termination,  equal  to one  time  the sum of (i) the  Executive's  base  salary
pursuant to Section 4(a) plus (ii) the Executive's  average annual bonus granted
pursuant to Section  4(c) hereof  during the  two-year  period (or such  shorter
period  during  which the  Executive  is  employed by the  Company)  immediately
preceding the Executive's termination, prorated for a partial year. In addition,
(i) if at the time of termination  the remainder of the term is greater than one
(1) year, and the Executive  remains  unemployed one (1) year, and the Executive
remains  unemployed one (1) year after the termination date, the Executive shall
be entitled to receive  his base salary  pursuant to Section  4(a) from such one
(1) year anniversary of the termination date until the earlier of (A) the end of
the term or (B) the date on which the  Executive  becomes  employed  (subject to
the  limitation  that the total  amount paid to the  Executive  pursuant to this
Section  11(a) shall not exceed the total  amount of base  salary the  Executive
would have received  pursuant to Section 4(a) between the  termination  date and
the end of the term) and (ii) if at the time of termination the remainder of the
term is less than one (1) year,  the  Executive  will  receive  one (1) time the
amount otherwise provided in this Section 11(a).  Notwithstanding  any provision
to the contrary contained herein, the Executive shall be entitled to receive the
payments  provided for in the second sentence of this Section 11(a) (A) only for
so  long  as  the  Executive  uses  all  reasonable  means  available  to him to
diligently  pursue new  employment  and (B)  provided  the  Executive  accepts a
reasonable  offer of  employment.  It shall be  within  the  company's  sole and
absolute  discretion  to determine  whether the  Executive has complied with the
provisions of this Section 11(a).

     b) Benefits.  Notwithstanding  any  provision to the contrary in any option
agreement  or other  agreement  or in any  plan,  except as  provided  for under
Section  8(a),  (i)  all of the  Executive's  outstanding  stock  options  shall
immediately  vest and become  exercisable  and the Executive shall have the full
term of the option to exercise any of the  Executive's  stock options,  and (ii)
all restrictions on any other equity awards relating to continued performance of
services shall lapse.

     Subject  to Section  15, for one year  following  the  termination  of this
Agreement, the Company shall use its reasonable best efforts to maintain in full
force and effect for the continued benefit of the Executive all employee welfare
benefit plans and perquisite programs in which the Executive was


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<PAGE>


entitled to  participate  immediately  prior to the  Executive's  termination or
shall arrange to make available to the Executive benefits  substantially similar
to those which the Executive  would  otherwise  have been entitled to receive if
his  employment  had not been  terminated;  provided,  however,  that (i) if the
remainder of the term exceeds one (1) year, the Company shall use its reasonable
best efforts to continue to provide such benefits to the Executive until the end
of the term and (ii) if the remainder of the term is less than one (1) year, the
obligation  of the Company  pursuant to this Section 11(b) shall extend for only
one year (1) year following the termination date. Such welfare benefits shall be
provided to the Executive on the same terms and conditions  (including,  without
limitation,  employee contributions toward the premium payments) under which the
Executive was entitled to participate immediately prior to his termination.

     Notwithstanding  the foregoing,  with respect to the Executive's  continued
coverage  under the  Company's  medical and dental  plan,  or a successor  plan,
pursuant to this provision,  the Executive's  "qualifying event" for purposes of
the Consolidated  Omnibus Budget  Reconciliation  Act of 1985 ("COBRA") shall be
his date of termination from the Company.

     12. Other  Termination.  If the Company terminates this Agreement for Cause
or if the  Executive  terminates  this  Agreement  for any reason  other than by
Permitted  Resignation  or  if  the  Executive  dies  or in  the  event  of  the
Executive's Disability, then the Company and the Executive shall have no further
obligation  hereunder  except as follows or except as provided in any  available
plan, program or agreement:

     a) The Company shall pay the Executive his then current minimum base salary
through the effective date of such termination;

     b) If the  Executive  terminated  this  Agreement  other than by  Permitted
Resignation,  he shall  receive  such  benefits,  if any, as are afforded by the
Company under its then existing policies applicable to employees who voluntarily
terminate their employment; and

     c) The  Executive  shall  have the rights set forth in Section 13 hereof in
the event of termination of this Agreement upon his Disability.

     13. Disability

     a) In  the event of the  Executive's  Disability (as defined herein) during
the term of this  Agreement,  the Executive's  duties and obligations  hereunder
shall  cease  and the  Company  shall  pay to the  Executive  in cash,  for each
calendar  year  until the  Executive  reaches  the age of 65 and at the times at
which the Executive  would have received  payment of his base salary,  an amount
equal  to 60% of the sum of (i)  the  Executive's  highest  annual  base  salary
pursuant to Section 4(a) than in effect for the period prior to the  Executive's
Disability.  For this  purpose,  the  Company  shall  maintain in full force and
effect during the term of this  Agreement an insurance  policy with an insurance
company  that  reasonably  shall  provide for the payment of such amounts to the
Executive upon his Disability.

     b) "Disability"  shall be defined as in the insurance policy  referenced in
Section 13(a) hereof.

     c) For the  period  during  which the  Executive  is  entitled  to  receive
payments  under this  Section  13, the  Company  shall use its  reasonable  best
efforts to  maintain in full force and effect for the  continued  benefit of the
Executive  all  employee  welfare  benefit  plans,  as  provided  for  under the
insurance  policy limits,  except for life insurance  provided for under Section
5(b);  and except for the automobile  allowance set forth in Section 5(c).  Such
welfare  benefits  shall be  provided  to the  Executive  on the same  terms and
conditions (including employee  contributions toward the premium payments) under
which  the  Executive  was  entitled  to  participate  immediately  prior to his
Disability.

     d) The  Company  shall  have no  obligation  under  this  Section 13 if the
Executive is not insurable  under an insurance  policy with a reasonably  priced
premium, as determined by the Company in its sole absolute discretion.

     14. No other Termination  Compensation.  Except as specifically provided in
Sections  11, 12 and 13  hereof,  upon  termination  of this  Agreement  for any
reason, the Executive shall not be entitled


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<PAGE>


to any severance pay or to any other compensation or payments (by way of salary,
damages or  otherwise)  of any nature  relating to this  Agreement  or otherwise
relating to or arising out of his employment by the Company.

     15. Mitigation  Obligation.  The Executive shall mitigate damages including
the amount of any payment  provided for pursuant to Section 13 by seeking  other
employment  or  otherwise;  provided,  however,  that the  Executive is under no
obligation  to mitigate  any amount  provided for by  insurance  policies  under
Section 13 hereof.

     16.  Arbitration.  Any  dispute  between the parties  under this  Agreement
shall be submitted to  arbitration  and such  arbitration  shall be conducted in
accordance with the rules of the International Chamber of Commerce ("ICC"). Each
of the parties  hereto  shall  appoint one person as an  arbitrator  to hear and
determine any such dispute and if the two  arbitrators so chosen shall be unable
to agree,  then the two arbitrators  shall select a third  impartial  arbitrator
whose decision shall control.  All  arbitrators  selected shall have  previously
engaged in and conducted  arbitration's for at least the past three (3) years in
accordance with die rules of ICC. The  arbitrators  shall have the right only to
interpret and apply the  provisions of this  Agreement and may not change any of
its provisions  except as permitted by Section 23 hereof.  The arbitrators shall
permit  reasonable  pre-hearing  discovery of facts, to the extent  necessary to
establish  a  claim  or  defence  to a  claim,  subject  to  supervision  by the
arbitrators.  The  determination  of the  arbitrators  shall be  conclusive  and
binding upon the parties and judgement upon the same may be entered in any court
having  jurisdiction  thereof. The  arbitrators shall give written notice to the
parties  stating his or their  determination,  and shall furnish to each party a
signed  copy of such  determination.  Arbitration  hereunder  shall be final and
binding on the parties and may not be  appealed.  The  expenses of  arbitration,
including  reasonable  attorneys' fees, shall be borne by the losing party or as
the arbitrators shall otherwise equitably determine.

     17. Indemnification.  To the maximum extent  permitted  under the corporate
laws of the State of Delaware or, if more favourable, the By-Laws of the Company
as in  effect  on the  date  of  this  Agreement,  (a) the  Executive  shall  be
indemnified  and held harmless by the Company,  as provided under such corporate
laws or such By-Laws,  as  applicable,  for any and all actions taken or matters
undertaken,  directly  or  indirectly,  in the  performance  of his  duties  and
responsibilities under this Agreement or otherwise on behalf of the Company, and
(b) without  limiting  clause (a), the Company shall indemnify and hold harmless
the  Executive  from and against  (i) any claim,  loss,  liability,  obligation,
damage,   cost,   expense,   action,   suit,   proceeding  or  cause  of  action
(collectively,  "Claims") arising  from or out of or relating to the Executive's
performance as an officer, director,  employee or agent of the Company or any of
its affiliates or in any other  capacity,  including,  without  limitation,  any
fiduciary capacity, in which the Executive serves at the request of the Company,
and  (ii)  any  cost  or  expense  (including,   without  limitation,  fees  and
disbursements of counsel)  (collectively,  "Expenses") incurred by the Executive
in  connection  with the  defence  or  investigation  thereof.  If any  Claim is
asserted or other matter arises with respect to which the Executive  believes in
good faith the Executive is entitled to indemnification as contemplated  hereby,
the Company shall pay the Expenses  incurred by the Executive in connection with
the defence or  investigation of such Claim or matter (or cause such Expenses to
be paid) on a monthly  basis,  provided that the Executive  shall  reimburse the
Company for such amounts, plus simple interest thereon at the then current prime
rate as  reported  in the Wall  Street  Journal as in effect  from time to time,
compounded  annually,  if the Executive  shall be found,  as finally  judicially
determined  by a court of competent  jurisdiction,  not to have been entitled to
indemnification hereunder.

     18.  Agreement.  This Agreement  supersedes  any and all other  agreements,
either oral or written,  between the parties  hereto with respect to the subject
matter  hereof,  and contains all of the  covenants and  agreements  between the
parties hereto with respect to such subject  matter,  and Executive has received
legal counsel regarding the entirety of the Agreement.


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<PAGE>


     19. Withholding of Taxes. The Company may withhold from any amounts payable
under this Agreement all federal,  state,  city or other taxes as the Company is
required to withhold pursuant to any law or government regulation or ruling.

     20. Successors and Binding Agreement.

     a) The Company will  reasonably  require any successor  (whether  direct or
indirect, by purchase,  merger,  consolidation,  reorganisation or otherwise) to
all or substantially all of the business or assets of the Company,  by agreement
in form and substance satisfactory to the Executive acting reasonably, expressly
to assume and agree to perform this Agreement in the same manner and to the same
extent the Company would be required to perform if no such  succession had taken
place.  This  Agreement  will be  binding  upon and inure to the  benefit of the
Company and any successor to the Company,  including,  without  limitation,  any
persons  acquiring  directly  or  indirectly  all  or  substantially  all of the
business or assets of the Company  whether by purchase,  merger,  consolidation,
reorganisation  or otherwise (and such successor shall  thereafter be deemed the
"Company" for the purposes of this Agreement).

     b) This  Agreement  will inure to the benefit of and be  enforceable by the
Executive's  personal  or  legal  representatives,   executors,  administrators,
successors, heirs, distributes and legatees.

     c) The rights of the Company  under this  Agreement may without the consent
of Executive,  be assigned by the Company in its sole and unfettered  discretion
(a) to any person,  firm,  corporation,  or other  business  entity which at any
time,  whether by  purchase,  merger,  or  otherwise,  directly  or  indirectly,
acquires all or substantially  all of the assets or business of the Company,  or
(b) to any subsidiary or affiliate of the Company (the "Company Group"),  or any
transferee,  whether  by  purchase,  merger  or  otherwise,  which  directly  or
indirectly acquires all or substantially all of the assets of the Company or any
other member of the Company Group.

     21.  Notices.  For all  purposes  of this  Agreement,  all  communications,
including, without limitation, notices, consents, request or approvals, required
or  permitted  to  be given  hereunder  will be in writing and will be deemed to
have been duly given when hand  delivered or dispatched by electronic  facsimile
transmission  (with  receipt  thereof  confirmed),  or five  business days after
having been mailed by United States registered or certified mail, return receipt
requested,  postage prepaid,  or three business days after having been sent by a
nationally recognised overnight courier service such as Federal Express, UPS, or
Purolator,  addressed to the Company (to the  attention of the  Secretary of the
Company)  at  its  principal  executive  offices  and to  the  Executive  at his
principal residence, or to such other address as any party may have furnished to
the other in writing and in accordance herewith,  except that notices of changes
of address shall be effective only upon receipt.

     22.   Governing  Law.  The  validity,   interpretation,   construction  and
performance  of this  Agreement  will be governed by and construed in accordance
with the  substantive  laws of the State of  Delaware,  without giving effect to
the principles of conflict of laws of such state.

     23.  Severability  and  Reformation.  If any provision of this Agreement is
held to be illegal,  invalid or  unenforceable  under any present or future law,
and if the rights or obligations  of the parties under this Agreement  would not
be materially and adversely  affected  thereby,  such  provision  shall be fully
separable,  and  this  Agreement  shall be  construed  and  enforced  as if such
illegal,  invalid or unenforceable provision had never comprised a part thereof,
the remaining provisions of this Agreement shall remain in full force and effect
and shall not be affected by the illegal,  invalid or unenforceable provision or
by  its  severance  therefrom,   and,  in  lieu  of  such  illegal,  invalid  or
unenforceable  provision,  there shall be added  automatically as a part of this
Agreement a legal,  valid and enforceable  provision as similar in terms to such
illegal,  invalid or unenforceable provision as may be possible, and the parties
hereto  request the court or any  arbitrator to whom  disputes  relating to this
Agreement   are  submitted  to  reform  the   otherwise   illegal,   invalid  or
unenforceable provision in accordance with this Section 23.


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<PAGE>


     24. Survival of  Provisions.  Notwithstanding  any other  provision of this
Agreement,  the parties'  respective rights and obligations under Sections 4, 5,
11, 12, 13, 14,  15, 16, 17, and 19 hereof  and  under any other  Sections  that
provide a party with rights  (including  without  limitation,  rights to receive
payments)  that  have  not  been  fully  satisfied  as of  such  termination  or
expiration,  will survive any termination or expiration of this Agreement or the
termination of the Executive's employment for any reason whatsoever.

     25.  Miscellaneous.  No provision of this Agreement may be modified, waived
or  discharged  unless such  waiver,  modification  or discharge is agreed to in
writing  signed by the  Executive  and the  Company.  No waiver by either  party
hereto at any time of any breach by the other party  hereto or  compliance  with
any condition or provision of this Agreement to be performed by such other party
will be deemed a waiver of similar or dissimilar provisions or conditions at the
same or at any prior or subsequent time.  Unless otherwise noted,  references to
"Sections"  are to  sections  of  this  Agreement.  The  captions  used  in this
Agreement are designed for convenient  reference only and are not to be used for
the purpose of interpreting any provision of this Agreement.

     26.  Counterparts.    This  Agreement  may  be  executed  in  one  or  more
counterparts,  each of which shall be deemed to be an original  but all of which
together will constitute one and the same  Agreement.  The delivery by facsimile
of an executed  counterpart of this Agreement  shall be deemed to be an original
and shall have the full force and effect of an original copy.

     IN WITNESS WHEREOF,   the parties hereof have executed this Agreement as of
the day and year first above written.



                                           /s/ Stuart Smith
                                           ---------------------------
                                           Stuart Smith


                                           EUROBIOTECH GROUP INC.

                                           By:    /s/ SIGNATURE
                                                  --------------------
                                           Name:  /s/ SIGNATURE
                                                  --------------------
                                           Title: /s/ SIGNATURE
                                                  --------------------

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