Document:

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                                                                   Exhibit 10(n)

                              EMPLOYMENT AGREEMENT

      Employment   Agreement  dated  as  of  April  2,  2001,   between  PHARMOS
CORPORATION,  a Nevada corporation (with its successors and assigns, referred to
as the "Corporation"), and HAIM AVIV (hereinafter referred to as "AVIV").

                              PRELIMINARY STATEMENT

      The Corporation  desires to employ AVIV as Chairman of the Board and Chief
Executive  Officer of the Corporation  and as Chief Executive  Officer and Chief
Scientist of the Corporation's  Pharmos Ltd.  subsidiary  ("Limited"),  and AVIV
wishes to be so employed by the Corporation  and by Limited,  upon the terms and
subject to the conditions set forth in this Agreement.  The Corporation and AVIV
also wish to enter into the other agreements set forth in this Agreement, all of
which are related to AVIV's employment under this Agreement.

                                    AGREEMENT

      AVIV and the Corporation therefore agree as follows:

      1. Term of Employment. The Corporation hereby employs AVIV and AVIV hereby
accepts  employment  with the  Corporation  for the period (the "Initial  Term")
commencing on the date hereof (the "Commencement Date"), and ending on the first
anniversary  of the date hereof or upon the earlier  termination  of the Initial
Term pursuant to Section 6. The Initial Term will be extended  automatically for
additional  one year periods  (each,  an  "Additional  Term";  together with the
Initial  Term,  the "Term"),  subject to the rights of the parties  generally to
terminate this Agreement in accordance  with the provisions of Section 6(a). The
termination  of the Term for any reason shall end AVIV's  employment  under this
Agreement, but, except as otherwise set forth herein, shall not terminate AVIV's
or the Corporation's other agreements in this Agreement.

      2. Position and Duties.  During the Term,  AVIV shall serve as Chairman of
the Board and Chief Executive  Officer of the Corporation and as Chief Executive
Officer and Chief  Scientist  of Limited.  AVIV shall also hold such  additional
positions and titles as the Board of Directors of the Corporation  (the "Board")
may  determine  from  time  to  time,   including   positions  and  titles  with
subsidiaries  of the  Corporation.  AVIV shall  report to the Board.  During the
Term,  AVIV shall  devote the  majority of his  business  time and  attention to
performing  his  duties  hereunder;  provided,  however,  that Aviv shall not be
precluded  from spending time on other  business and  professional  ventures and
activities.  The services to be performed  hereunder to the  Corporation by AVIV
may be performed on his behalf as consulting services by HA Ventures,  Inc. ("HA
Ventures"), an entity of which AVIV is the sole shareholder.

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      3.  Compensation.

            (a) Base Salary. The Corporation and Limited together shall pay AVIV
compensation,  beginning  on the first day of the Initial Term and ending on the
last day of the Initial  Term,  of not less than an  aggregate  of $268,000  per
annum,  payable  monthly,  to be  allocated  as salary to AVIV from  Limited and
consulting  fees to HA Ventures from the  Corporation,  to be allocated  between
Limited and the Corporation in a manner agreed upon by AVIV and the Corporation.

            (b) Other and Additional Compensation.

                  (i)   Section 3(a) establishes the minimum compensation during
                        the Term and shall not preclude the Board from  awarding
                        AVIV a higher  salary or any bonuses or stock options in
                        the event of a successful financing or otherwise, and in
                        any event,  in the  discretion  of the Board.  It is the
                        practice of the  Corporation to adjust  compensation  on
                        January 1st of each year.

                  (ii)  During the Term, AVIV shall receive an annual cash bonus
                        based  upon the  attainment  of  agreed  upon  goals and
                        milestones   as   determined   and   approved   by   the
                        Compensation and Stock Option Committee of the Board.

      4.  Employee Benefits.

            (a) General. During the Term, AVIV shall be entitled to the employee
benefits  generally  available  to  employees  of  Limited,  including  3  weeks
vacation, and those other benefits described in this Section 4.

            (b) Additional  Benefit.  The  Corporation  hereby agrees to provide
AVIV with a certain benefit relating to the Corporation's  investment of amounts
equal to certain  insurance  premiums in lieu of its acquiring a "split  dollar"
life insurance policy on his life (the "Benefit") more specifically described in
a separate agreement between AVIV and the Corporation (the "Benefit  Document").
The Benefit  shall be payable to AVIV or his  estate,  as  applicable,  upon his
retirement  at the age of at least 62 or death or upon  AVIV's  termination  for
"Disability"(as defined in Section 7).

            (c)  Managers  Insurance.  The  Corporation  shall pay  directly  or
indirectly the premium on AVIV's present  "Managers  Insurance Scheme" at salary
levels of no less than 100% of the portion of then  current  base salary paid by
Limited.  Payment is to be made as required by the  insurer.  The  Corporation's
contribution  will be 8.33% for severance  payment,  5% for pension and 7.5% for
education.

            (d) Corporation Automobile. AVIV shall have the use of a Corporation
automobile.  The Corporation  shall reimburse AVIV for gasoline expenses and all
reasonable

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expenses  related to the use and  maintenance of such automobile on presentation
of appropriate documentation.

            (e) Sick Leave. AVIV shall be entitled to a paid sick leave of up to
eighteen  (18) days  during  each  twelve  (12) month  period of his  employment
hereunder,  provided  that any  unused  sick leave in respect of any year may be
carried forward only up to an aggregate of ninety (90) days.

            (f)  Telephone  Expenses.  AVIV  shall  be  reimbursed  for all home
telephone  expenses incurred on a separate  telephone line in furtherance of the
business of the  Corporation  provided  that such line be used only for business
purposes and AVIV submits appropriate documentation for the expenses.

      5. Expenses.  During the Term, the  Corporation  shall  reimburse AVIV for
actual out-of-pocket expenses incurred by him in the performance of his services
for the  Corporation  upon the  receipt  of  appropriate  documentation  of such
expenses.

      6. Termination.

            (a) General.  The Term shall end immediately  upon AVIV's death, and
for Cause or Disability,  as defined in Section 7. Upon  termination of the Term
due to AVIV's death,  all compensation due AVIV under this Agreement will cease,
except as set forth in Section 9. Upon the Corporation's termination of the Term
for Cause,  AVIV shall have ten (10) days to cure said Cause,  if curable.  With
respect to the termination of AVIV pursuant to Section 6(e), the Corporation may
elect to terminate  this Agreement at any time by giving 180 days' prior written
notice,  during the Initial Term,  and by giving 90 days' prior  written  notice
during the each Additional  Term. With respect to termination by AVIV other than
pursuant to Section 6(f), AVIV may elect to terminate this Agreement at any time
by giving 60 days' prior written  notice at any time during the Term,  and, upon
such  termination,  all  compensation  due AVIV under this Agreement will cease,
except as set forth in Section 9.

            (b) Notice of  Termination.  The  Corporation  shall  notify AVIV in
writing  of its  termination  of his  employment  hereunder.  The  Corporation's
failure to give notice under this Section  6(b) shall not,  however,  affect the
validity of the Corporation's termination of the Term.

            (c)  Termination by the  Corporation for Cause. If terminated by the
Corporation for Cause,  the  Corporation  shall describe to AVIV the grounds for
his termination.  Upon the Corporation's  termination of the Term for Cause, all
compensation  due AVIV under this Agreement  will cease,  except as set forth in
Section 9.  Moreover,  all options and warrants to purchase  Common Stock of the
Corporation shall expire upon such termination.

            (d) Termination by the Corporation upon a Change of Control.  In the
event that the Corporation  terminates its relationship with AVIV within one (1)
year of a "Change of Control",  as defined in Section 7, AVIV shall  receive the
following:

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                  (i)   an amount  equal to eighteen  (18) months of base salary
                        for the  then  current  year  (in  addition  to the base
                        salary paid to AVIV after the Corporation's  delivery of
                        notice of  termination  pursuant to Section 6(a) and the
                        actual date of termination);
                  (ii)  Other Compensation (as defined in Section 9); and
                  (iii) the full vesting of AVIV's stock  options and  warrants,
                        and   extended   exercisability   thereof   until  their
                        respective expiration dates.

AVIV shall be entitled to the foregoing  benefits once notice of  termination is
given by the  Corporation,  regardless of his  subsequent  Death,  Disability or
termination for Cause.

            (e)  Termination  by the  Corporation  other  than  upon  Change  of
Control,  Death,  Disability  or  Cause.  In  the  event  that  the  Corporation
terminates  its  relationship   with  AVIV,   including  a  termination  by  the
Corporation  effective  upon the expiration of the Initial Term or an Additional
Term but other than upon a Change of Control,  Death,  Disability or Cause, AVIV
shall receive the following:

                  (i)   an amount equal to twelve (12) months of base salary for
                        the then  current  year (in  addition to the base salary
                        paid to AVIV after the Corporation's  delivery of notice
                        of  termination  pursuant to Section 6(a) and the actual
                        date of termination);
                  (ii)  Other Compensation; and
                  (iii) the full vesting of AVIV's stock  options and  warrants,
                        and   extended   exercisability   thereof   until  their
                        respective expiration dates.

            (f)  Termination  by AVIV upon Good Reason or Change of Control.  In
the event  AVIV  terminates  his  relationship  with the  Corporation  for "Good
Reason" as defined in Section 7,  within one (1) year of the  occurrence  of the
event which established the "Good Reason", or within one (1) year of a Change of
Control, AVIV shall receive the following:

                  (i)   an amount equal to twelve (12) months of base salary for
                        the then  current  year (in  addition to the base salary
                        paid to AVIV after his delivery of notice of termination
                        pursuant  to  Section   6(a)  and  the  actual  date  of
                        termination);
                  (ii)  Other Compensation; and
                  (iii) the full vesting of AVIV's stock  options and  warrants,
                        and   extended   exercisability   thereof   until  their
                        respective expiration dates.

      AVIV  shall  provide  prior  written  notice  to  the  Corporation  of his
termination  pursuant to this Section 6(f),  and such notice shall  describe the
particular "Good Reason(s)" at issue.

      7. Definitions.

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            (a)  "Cause"  Defined.  "Cause"  means (i)  willful  malfeasance  or
willful misconduct by AVIV in connection with his employment;  (ii) AVIV's gross
negligence in performing  any of his duties under this  Agreement;  (iii) AVIV's
conviction  of,  or entry  of a plea of  guilty  to,  or entry of a plea of nolo
contendere  with respect to, any felony;  (iv) AVIV's  habitual  drunkenness  or
excessive absenteeism not related to illness; (iv) AVIV's material breach of any
written policy applicable to all employees  adopted by the Corporation;  or (vi)
material breach by AVIV of any of his agreements in this Agreement.

            (b) "Disability" Defined.  "Disability" shall mean AVIV's incapacity
due to  physical  or  mental  illness  that  results  in  his  being  unable  to
substantially  perform his duties  hereunder for six consecutive  months (or for
six months out of any nine-month  period).  During a period of Disability,  AVIV
shall  continue  to receive  his base  salary  hereunder,  provided  that if the
Corporation provides AVIV with disability insurance coverage, payments of AVIV's
base salary shall be reduced by the amount of any disability  insurance payments
received by AVIV due to such coverage.  Upon  termination,  after the end of the
period of  Disability,  all  compensation  due AVIV under this  Agreement  shall
cease, except as set forth in Section 9.

            (c) "Change of Control" Defined.  "Change of Control" shall mean the
occurrence of any one or more of the following events:

                  (i) An acquisition  (whether  directly from the Corporation or
      otherwise)  of any  voting  securities  of the  Corporation  (the  "Voting
      Securities")  by any  "Person" (as the term person is used for purposes of
      Section  13(d) or 14(d) of the  Securities  and Exchange  Act of 1934,  as
      amended  (the  "1934  Act")),  immediately  after  which  such  Person has
      "Beneficial Ownership" (within the meaning of Rule 13d-3 promulgated under
      the 1934 Act) of fifty percent (50 %) or more of the combined voting power
      of the Corporation's then outstanding Voting Securities.

                  (ii) The individuals  who, as of the date hereof,  are members
      of the Board (the "Incumbent  Board"),  cease for any reason to constitute
      at least fifty-one percent (51%) of the Board;; or

                  (iii) Approval by the Board or stockholders of the Corporation
      of, or execution by the  Corporation  of any agreement with respect to, or
      the consummation of:

                        (A) A merger,  consolidation or reorganization involving
            the  Corporation,  where  either or both of the events  described in
            Section 7(c)(i) or 7(c)(ii) would be the result;

                        (B) A liquidation  or dissolution of or appointment of a
            receiver,  rehabilitator,  conservator  or similar  person for,  the
            Corporation; or

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                        (C) An agreement  for the sale or other  disposition  of
            all or  substantially  all of the assets of the  Corporation  to any
            Person (other than a transfer to a subsidiary of the Corporation).

      Notwithstanding  anything contained in this Agreement to the contrary,  if
AVIV's employment is terminated prior to a Change in Control and AVIV reasonably
demonstrates  that such  termination (i) was at the request of a third party who
has  indicated  an intention or taken steps  reasonably  calculated  to effect a
Change in Control and who  effectuates a Change in Control (a "Third  Party") or
(ii) otherwise  occurred in connection  with, or in anticipation of, a Change in
Control which actually occurs, then for all purposes of this Agreement, the date
of a Change in Control  with  respect  to AVIV  shall mean the date  immediately
prior to the date of such termination of AVIV's employment.

            (d) "Good Reason" Defined.  "Good Reason" shall mean the occurrence,
whether or not after a Change in  Control,  of any of the  events or  conditions
described below:

                  (i)  a  change   in  AVIV's   status,   title,   position   or
      responsibilities  (including reporting  responsibilities) which represents
      an adverse change from his status,  title, position or responsibilities as
      in effect  immediately prior to such change; the assignment to AVIV of any
      duties or responsibilities  which are inconsistent with his status, title,
      position  or  responsibilities  as in  effect  immediately  prior  to such
      change; or any removal of AVIV from or failure to reappoint or reelect him
      to any of such offices or positions;

                  (ii) any failure to award AVIV bonus payments and/or increases
      in base salary in a manner consistent with the practice of the Corporation
      prior to such failure;

                  (iii)  the  Corporation's  requiring  AVIV to be  based at any
      place outside the State of Israel,  except for reasonably  required travel
      on the  Corporation's  business which is not materially  greater than such
      travel requirements prior to such time;

                  (iv) the failure by the  Corporation to (a) continue in effect
      (without  reduction in benefit  level,  and/or reward  opportunities)  any
      material   compensation  or  employee  benefit  plan  in  which  AVIV  was
      participating at any time prior to such failure,  or (b) provide AVIV with
      compensation and benefits,  in the aggregate,  at least equal (in terms of
      benefit  levels and/or reward  opportunities)  to those provided for under
      each other employee  benefit plan,  program and practice in which AVIV was
      participating at any time prior to such failure; or

                  (v) any material breach by the Corporation of any provision of
      this  Agreement  which is not cured within ten (10) days after the receipt
      of written notice by the Corporation of a description of the breach.

      8. Payment  Terms.  Payment of any amounts to which AVIV shall be entitled
pursuant to the provisions of Sections 6 and 7 shall be made no later than sixty
(60) days following receipt of

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notice of termination or the event giving rise to such termination.  Any amounts
payable  pursuant  to  Sections  6 and 7 which are not made  within  the  period
specified in this Section 8 shall bear interest at a rate equal to the lesser of
(i) the maximum interest rate allowable  pursuant to applicable law or (ii) five
points above the "prime rate" of interest as published from  time-to-time in the
Eastern Edition of the Wall Street Journal.

      9.    Benefits.

            (a) General.  Except if AVIV resigns without Good Reason (other than
retirement on or after the age of 62), in the event AVIV's  employment  with the
Corporation is terminated for any reason prior to the end of the Term,  AVIV and
his  dependents,  if any, will continue to  participate in any group health plan
sponsored by the Corporation in which AVIV was participating on the date of such
termination, at a cost to AVIV and his dependents equal to the amount charged by
the  Corporation  to  similarly   situated   employees  while  employed  by  the
Corporation,  for the  remainder of the Initial Term or, if  termination  occurs
within  an  Additional   Term,  for  the  remainder  of  such  Additional  Term.
Thereafter,  AVIV and his  dependents,  if any,  shall be  entitled  to elect to
continue such health coverage, at a cost to AVIV and his dependents equal to the
amount charged by the Corporation to similarly situated employees while employed
by the  Corporation,  for the longest  period of time permitted by the agents of
the Corporation who arrange for such health  coverage,  with such period to last
at least twelve (12) months from the date of termination.  Upon  termination for
any  reason,  in addition  to any  payments  to which AVIV may be entitled  upon
termination of his Employment pursuant to any provision of this Agreement,  AVIV
shall be entitled  to any  benefits  under any  pension,  supplemental  pension,
savings,  or other  employee  benefit plan (other than life  insurance) in which
AVIV was participating on the date of any such termination.

            (b) Other  Benefits.  In addition to the rights  provided in Section
9(a), in the event of a termination of AVIV's  employment  for any reason,  AVIV
shall  retain his rights  under the  "Managers  Insurance  Scheme"  pursuant  to
Section 4(c) and shall retain his use of the Company  automobile  provided under
Section 4(d) for the remainder of its lease term.  Such benefits,  together with
the  benefits   provided  in  Section   9(a),   shall  be  referred  to  herein,
collectively, as "Other Compensation".

      10.   Confidentiality.

            (a) "Corporation  Information"  Defined.  "Corporation  Information"
means  all  information,   knowledge  or  data  of  or  pertaining  to  (i)  the
Corporation, its employees and all work undertaken on behalf of the Corporation,
and (ii) any other person, firm, corporation or business organization with which
the  Corporation  may do  business  during  the Term,  that is not in the public
domain (and whether  relating to methods,  processes,  techniques,  discoveries,
pricing, marketing or any other matters).

            (b)  Confidentiality.  AVIV hereby  recognizes that the value of all
trade  secrets  and  other  proprietary  data and all other  information  of the
Corporation not in the public domain

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disclosed  by  the  Corporation  in  the  course  of  his  employment  with  the
Corporation is  attributable  substantially  to the fact that such  confidential
information  is  maintained by the  Corporation  in strict  confidentiality  and
secrecy  and  would  be  unavailable  to  others  without  the   expenditure  of
substantial  time,  effort or money.  AVIV therefore,  except as provided in the
next two sentences,  covenants and agrees that all Corporation Information shall
be kept  secret and  confidential  at all times  during and after the end of the
Term  and  shall  not be  used or  divulged  by him  outside  the  scope  of his
employment as  contemplated  by this  Agreement,  except as the  Corporation may
otherwise  expressly authorize by action of the Board. In the event that AVIV is
requested in a judicial,  administrative or governmental  proceeding to disclose
any of the Corporation Information, AVIV will promptly so notify the Corporation
so that the Corporation may seek a protective order or other appropriate  remedy
and/or  waive  compliance  with  this  Agreement.  If  disclosure  of any of the
Corporation  Information is required,  AVIV may furnish the material so required
to be  furnished,  but AVIV will furnish  only that  portion of the  Corporation
Information that legally is required.

      11.   Successors and Assigns.

            (a) AVIV. This Agreement is a personal contract,  and the rights and
interests  that the  Agreement  accords  to AVIV  may not be sold,  transferred,
assigned,  pledged,  encumbered, or hypothecated by him. All rights and benefits
of AVIV  shall be for the sole  personal  benefit of AVIV,  and no other  person
shall acquire any right, title or interest under this Agreement by reason of any
sale, assignment,  transfer, claim or judgment or bankruptcy proceedings against
AVIV. Except as so provided, this Agreement shall inure to the benefit of and be
binding upon AVIV and his personal representatives, distributees and legatees.

            (b) The  Corporation.  This  Agreement  shall  be  binding  upon the
Corporation  and inure to the benefit of the  Corporation  and of its successors
and assigns.

      12.   Entire  Agreement.  This Agreement  represents the entire  agreement
between  the parties  concerning  AVIV's  employment  with the  Corporation  and
supersedes all prior negotiations,  discussions,  understandings and agreements,
whether  written  or oral,  between  AVIV and the  Corporation  relating  to the
subject matter of this  Agreement.  Notwithstanding  the foregoing,  the Benefit
Document shall not be superseded.

      13.   Amendment or  Modification;  Waiver.  No provision of this Agreement
may be amended or waived unless such amendment or waiver is agreed to in writing
signed by AVIV and by a duly authorized officer of the Corporation. No waiver by
any party to this  Agreement of any breach by another  party of any condition or
provision of this  Agreement to be performed by such other party shall be deemed
a waiver of a similar or dissimilar condition or provision at the same time, any
prior time or any subsequent time.

      14.   Notices.  Any notice to be given  under this  Agreement  shall be in
writing and delivered  personally or sent by overnight  courier or registered or
certified mail,  postage  prepaid,  return receipt  requested,  addressed to the
party  concerned at the address  indicated  below,  or to such other  address of
which such party subsequently may give notice in writing:

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If to AVIV:                         Haim Aviv
                              9 Habrosh Street
                              Rehovot 76326 Israel

If to the Corporation:        Pharmos Corporation
                              99 Wood Avenue South, Suite 301
                              Iselin, NJ 08630
                              Attention: President

with a copy to:               Ehrenreich Eilenberg & Krause LLP
                              11 East 44th Street
                              New York, NY 10017
                              Attention: Adam D. Eilenberg, Esq.

      Any notice  delivered  personally or by overnight  courier shall be deemed
given on the date delivered and any notice sent by registered or certified mail,
postage  prepaid,  return receipt  requested,  shall be deemed given on the date
mailed.

      15. Severability. If any provision of this Agreement or the application of
any such  provision to any party or  circumstances  shall be  determined  by any
court of competent  jurisdiction to be invalid and  unenforceable to any extent,
the remainder of this  Agreement or the  application  of such  provision to such
person or  circumstances  other  than those to which it is so  determined  to be
invalid and  unenforceable  shall not be  affected,  and each  provision of this
Agreement  shall be  validated  and  shall be  enforced  to the  fullest  extent
permitted by law. If for any reason any provision of this  Agreement  containing
restrictions  is held to  cover an area or to be for a  length  of time  that is
unreasonable  or in any other way is  construed to be too broad or to any extent
invalid, such provision shall not be determined to be entirely null, void and of
no effect;  instead,  it is the intention and desire of both the Corporation and
AVIV that, to the extent that the provision is or would be valid or  enforceable
under  applicable  law, any court of competent  jurisdiction  shall construe and
interpret  or reform  this  Agreement  to provide for a  restriction  having the
maximum  enforceable  area, time period and such other constraints or conditions
(although  not  greater  than  those  contained   currently  contained  in  this
Agreement) as shall be valid and enforceable under the applicable law.

      16.  Survivorship.  The respective  rights and  obligations of the parties
hereunder  shall  survive  any  termination  of  this  Agreement  to the  extent
necessary to the intended preservation of such rights and obligations.

      17. Headings.  All descriptive headings of sections and paragraphs in this
Agreement are intended solely for convenience of reference,  and no provision of
this  Agreement is to be construed by reference to the heading of any section or
paragraph.

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      18. Withholding Taxes. All salary, benefits,  reimbursements and any other
payments to AVIV under this Agreement shall be subject to all applicable payroll
and withholding taxes and deductions  required by any law, rule or regulation of
and federal, state or local authority.

      19.  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 constitute one and same instrument.

      20. Applicable Law; Jurisdiction.  The laws of the State of New York shall
govern  the  interpretation,  validity  and  performance  of the  terms  of this
Agreement,  without  reference to rules  relating to conflicts of law. Any suit,
action  or  proceeding  against  AVIV with  respect  to this  Agreement,  or any
judgment entered by any court in respect thereof, may be brought in any court of
competent jurisdiction in the State of New York, as the Corporation may elect in
its sole  discretion,  and AVIV hereby submits to the exclusive  jurisdiction of
such courts for the purpose of any such suit, action, proceeding or judgment.

          [THE BALANCE OF THIS PAGE HAS BEEN LEFT BLANK INTENTIONALLY]

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      IN WITNESS WHEREOF,  the parties hereto have executed this Agreement as of
the date first written above.

                              /s/ HAIM AVIV
                              ----------------------------------
                              HAIM AVIV

                              PHARMOS CORPORATION

                              By:   /s/ Gad Riesenfeld
                                    -----------------------------
                                    Gad Riesenfeld
                                    President and Chief Operating Officer

                                       11<PAGE>

                                                                   Exhibit 10(o)

                              EMPLOYMENT AGREEMENT

      Employment   Agreement  dated  as  of  April  2,  2001,   between  PHARMOS
CORPORATION,  a Nevada corporation (with its successors and assigns, referred to
as  the  "Corporation"),   and  GAD  RIESENFELD   (hereinafter  referred  to  as
"RIESENFELD").

                              PRELIMINARY STATEMENT

      The  Corporation  desires  to employ  RIESENFELD  as  President  and Chief
Operating  Officer of the Corporation,  and RIESENFELD  wishes to be employed by
the Corporation,  upon the terms and subject to the conditions set forth in this
Agreement.  The  Corporation  and  RIESENFELD  also wish to enter into the other
agreements set forth in this Agreement, all of which are related to RIESENFELD's
employment under this Agreement.

                                    AGREEMENT

      RIESENFELD and the Corporation therefore agree as follows:

      1. Term of  Employment.  The  Corporation  hereby  employs  RIESENFELD and
RIESENFELD  hereby accepts  employment  with the Corporation for the period (the
"Initial Term")  commencing on the date hereof (the  "Commencement  Date"),  and
ending  on the  first  anniversary  of the  date  hereof  or  upon  the  earlier
termination  of the Initial Term pursuant to Section 6. The Initial Term will be
extended  automatically  for additional  one year periods (each,  an "Additional
Term"; together with the Initial Term, the "Term"), subject to the rights of the
parties  generally to terminate this Agreement in accordance with the provisions
of  Section  6(a).  The  termination  of the  Term  for  any  reason  shall  end
RIESENFELD's employment under this Agreement, but, except as otherwise set forth
herein,  shall not terminate  RIESENFELD's or the Corporation's other agreements
in this Agreement.

      2.  Position  and  Duties.  During  the Term,  RIESENFELD  shall  serve as
President and Chief Operating  Officer of the Corporation,  which title shall be
adjusted as  necessary  to maintain  its  seniority  in the event of  subsequent
changes in the  Corporation's  title structure.  RIESENFELD shall also hold such
additional positions and titles as the CEO of the Corporation may determine from
time to time.  RIESENFELD  shall report to the CEO. During the Term,  RIESENFELD
shall devote his full time and attention to performing his duties as an employee
of the Corporation.

      3. Compensation.

            (a) Base Salary. The Corporation shall pay RIESENFELD a base salary,
beginning on the first day of the Initial Term and ending on the last day of the
Initial Term, of not

                                       1
<PAGE>

less than $194,250 per annum, payable semi-monthly on the Corporation's  regular
pay cycle for professional employees.

            (b) Other and Additional Compensation.

                  (i)   Section 3(a) establishes the minimum compensation during
                        the Term and shall not  preclude  the Board of Directors
                        (the "Board")  from awarding  RIESENFELD a higher salary
                        or any  bonuses  or  stock  options  in the  event  of a
                        successful financing or otherwise,  and in any event, in
                        the  discretion of the Board.  It is the practice of the
                        Corporation  to adjust  compensation  on January  1st of
                        each year.

                  (ii)  During the Term, RIESENFELD shall receive an annual cash
                        bonus based upon the attainment of agreed upon goals and
                        milestones as determined by the Chief Executive  Officer
                        of the Corporation and approved by the  Compensation and
                        Stock Option Committee of the Board.

      4. Employee Benefits.

            (a) General.  During the Term,  RIESENFELD  shall be entitled to the
employee benefits, including 3 weeks vacation, a 401(k) plan, and current health
and dental  insurance  benefits  made  available  by the  Corporation  and other
benefits described in this Section 4.

            (b) Additional  Benefit.  The  Corporation  hereby agrees to provide
RIESENFELD with a certain benefit  relating to the  Corporation's  investment of
amounts  equal to certain  insurance  premiums in lieu of its acquiring a "split
dollar" life  insurance  policy on his life (the  "Benefit")  more  specifically
described in a separate  agreement  between  RIESENFELD and the Corporation (the
"Benefit  Document").  The Benefit shall be payable to RIESENFELD or his estate,
as  applicable,  upon his  retirement at the age of at least 62 or death or upon
RIESENFELD's termination for "Disability"(as defined in Section 7).

            (c)  Managers  Insurance.  The  Corporation  shall pay  directly  or
indirectly the premium on RIESENFELD's  present  "Managers  Insurance Scheme" at
salary  levels of no less than 100% of his then current base salary.  Payment is
to be  made  every  4  months  or 6  months  as  required  by the  insurer.  The
Corporation's  contribution will be 8.33% for severance payment,  5% for pension
and 2.5% for  disability.  The amount  contributed by the  Corporation  shall be
deducted from premiums payable by the Corporation  pursuant to any pension plans
available to RIESENFELD  pursuant to the Corporation's  benefit plans for senior
management.

            (d) Relocation Plan. The Corporation  shall pay a reasonable  rental
for a suitable  residence  for  RIESENFELD  in  proximity to any facility of the
Company (outside of Israel) at which  RIESENFELD  performs his primary duties as
President and Chief Operating Officer of the Company.  The Corporation shall pay
reasonable  moving  expenses  of  RIESENFELD  and his family on their  return to
Israel. Any taxes due on these payments shall be borne by the

                                       2
<PAGE>

Corporation.

            (e)  Corporation  Automobile.  RIESENFELD  shall  have  the use of a
Corporation automobile.  The Corporation shall reimburse RIESENFELD for gasoline
expenses and all reasonable  expenses related to the use and maintenance of such
automobile on presentation of appropriate documentation.

            (f) Sick Leave. RIESENFELD shall be entitled to a paid sick leave of
up to eighteen (18) days during each twelve (12) month period of his  employment
hereunder,  provided  that any  unused  sick leave in respect of any year may be
carried forward only up to an aggregate of ninety (90) days.

            (g) Telephone Expenses.  RIESENFELD shall be reimbursed for all home
telephone  expenses incurred on a separate  telephone line in furtherance of the
business of the  Corporation  provided  that such line be used only for business
purposes and RIESENFELD submits appropriate documentation for the expenses.

      5. Expenses.  During the Term, the Corporation shall reimburse  RIESENFELD
for actual  out-of-pocket  expenses  incurred by him in the  performance  of his
services for the Corporation  upon the receipt of appropriate  documentation  of
such expenses.

      6. Termination.

            (a) General. The Term shall end immediately upon RIESENFELD's death,
and for Cause or  Disability,  as defined in Section 7. Upon  termination of the
Term due to  RIESENFELD's  death,  all  compensation  due RIESENFELD  under this
Agreement will cease,  except as set forth in Section 9. Upon the  Corporation's
termination of the Term for Cause,  RIESENFELD  shall have ten (10) days to cure
said Cause, if curable.  With respect to the termination of RIESENFELD  pursuant
to Section 6(e),  the  Corporation  may elect to terminate this Agreement at any
time by giving 180 days' prior written  notice,  during the Initial Term, and by
giving 90 days' prior  written  notice  during the each  Additional  Term.  With
respect to  termination  by  RIESENFELD  other than  pursuant  to Section  6(f),
RIESENFELD  may elect to terminate this Agreement at any time by giving 60 days'
prior written  notice at any time during the Term,  and, upon such  termination,
all compensation  due RIESENFELD under this Agreement will cease,  except as set
forth in Section 9.

            (b) Notice of Termination.  The Corporation  shall notify RIESENFELD
in writing of its  termination of his employment  hereunder.  The  Corporation's
failure to give notice under this Section  6(b) shall not,  however,  affect the
validity of the Corporation's termination of the Term.

            (c)  Termination by the  Corporation for Cause. If terminated by the
Corporation for Cause, the Corporation  shall describe to RIESENFELD the grounds
for his termination.  Upon the Corporation's  termination of the Term for Cause,
all compensation  due RIESENFELD under

                                       3
<PAGE>

this  Agreement  will  cease,  except as set forth in Section 9.  Moreover,  all
options and warrants to purchase  Common Stock of the  Corporation  shall expire
upon such termination.

            (d) Termination by the Corporation upon a Change of Control.  In the
event that the Corporation  terminates its relationship  with RIESENFELD  within
one (1) year of a "Change of Control", as defined in Section 7, RIESENFELD shall
receive the following:

                  (i)   an amount  equal to eighteen  (18) months of base salary
                        for the  then  current  year  (in  addition  to the base
                        salary  paid  to  RIESENFELD  after  the   Corporation's
                        delivery  of notice of  termination  pursuant to Section
                        6(a) and the actual date of termination);
                  (ii)  Other Compensation (as defined in Section 9); and
                  (iii) the full  vesting  of  RIESENFELD's  stock  options  and
                        warrants,  and  extended  exercisability  thereof  until
                        their respective expiration dates.

RIESENFELD  shall  be  entitled  to  the  foregoing   benefits  once  notice  of
termination is given by the  Corporation,  regardless of his  subsequent  Death,
Disability or termination for Cause.

            (e)  Termination  by the  Corporation  other  than  upon  Change  of
Control,  Death,  Disability  or  Cause.  In  the  event  that  the  Corporation
terminates  its  relationship  with  RIESENFELD,  including a termination by the
Corporation  effective  upon the expiration of the Initial Term or an Additional
Term but other  than  upon a Change  of  Control,  Death,  Disability  or Cause,
RIESENFELD shall receive the following:

                  (i)   an amount equal to twelve (12) months of base salary for
                        the then  current  year (in  addition to the base salary
                        paid to RIESENFELD after the  Corporation's  delivery of
                        notice of  termination  pursuant to Section 6(a) and the
                        actual date of termination);
                  (ii)  Other Compensation; and
                  (iii) the full  vesting  of  RIESENFELD's  stock  options  and
                        warrants,  and  extended  exercisability  thereof  until
                        their respective expiration dates.

            (f) Termination by RIESENFELD upon Good Reason or Change of Control.
In the event  RIESENFELD  terminates his  relationship  with the Corporation for
"Good Reason" as defined in Section 7, within one (1) year of the  occurrence of
the event  which  established  the "Good  Reason",  or within  one (1) year of a
Change of Control, RIESENFELD shall receive the following:

                  (i)   an amount equal to twelve (12) months of base salary for
                        the then  current  year (in  addition to the base salary
                        paid to  RIESENFELD  after  his  delivery  of  notice of
                        termination pursuant to Section 6(a) and the actual date
                        of termination);
                  (ii)  Other Compensation; and

                                       4
<PAGE>

                  (iii) the full  vesting  of  RIESENFELD's  stock  options  and
                        warrants,  and  extended  exercisability  thereof  until
                        their respective expiration dates.

      RIESENFELD  shall provide prior written  notice to the  Corporation of his
termination  pursuant to this Section 6(f),  and such notice shall  describe the
particular "Good Reason(s)" at issue.

      7. Definitions.

            (a)  "Cause"  Defined.  "Cause"  means (i)  willful  malfeasance  or
willful  misconduct  by  RIESENFELD  in  connection  with his  employment;  (ii)
RIESENFELD's  gross  negligence  in  performing  any of his  duties  under  this
Agreement; (iii) RIESENFELD's conviction of, or entry of a plea of guilty to, or
entry  of  a  plea  of  nolo  contendere  with  respect  to,  any  felony;  (iv)
RIESENFELD's  habitual  drunkenness  or  excessive  absenteeism  not  related to
illness;  (iv) RIESENFELD's  material breach of any written policy applicable to
all employees adopted by the Corporation;  or (vi) material breach by RIESENFELD
of any of his agreements in this Agreement.

            (b)  "Disability"  Defined.  "Disability"  shall  mean  RIESENFELD's
incapacity due to physical or mental illness that results in his being unable to
substantially  perform his duties  hereunder for six consecutive  months (or for
six  months  out of any  nine-month  period).  During  a period  of  Disability,
RIESENFELD shall continue to receive his base salary hereunder, provided that if
the Corporation provides RIESENFELD with disability insurance coverage, payments
of  RIESENFELD's  base salary  shall be reduced by the amount of any  disability
insurance   payments   received  by  RIESENFELD  due  to  such  coverage.   Upon
termination,  after the end of the period of Disability,  all  compensation  due
RIESENFELD under this Agreement shall cease, except as set forth in Section 9.

            (c) "Change of Control" Defined.  "Change of Control" shall mean the
occurrence of any one or more of the following events:

                  (i) An acquisition  (whether  directly from the Corporation or
      otherwise)  of any  voting  securities  of the  Corporation  (the  "Voting
      Securities")  by any  "Person" (as the term person is used for purposes of
      Section  13(d) or 14(d) of the  Securities  and Exchange  Act of 1934,  as
      amended  (the  "1934  Act")),  immediately  after  which  such  Person has
      "Beneficial Ownership" (within the meaning of Rule 13d-3 promulgated under
      the 1934 Act) of fifty percent (50 %) or more of the combined voting power
      of the Corporation's then outstanding Voting Securities.

                  (ii) The individuals  who, as of the date hereof,  are members
      of the Board (the "Incumbent  Board"),  cease for any reason to constitute
      at least fifty-one percent (51%) of the Board;; or

                                       5
<PAGE>

                  (iii) Approval by the Board or stockholders of the Corporation
      of, or execution by the  Corporation  of any agreement with respect to, or
      the consummation of:

                        (A) A merger,  consolidation or reorganization involving
            the  Corporation,  where  either or both of the events  described in
            Section 7(c)(i) or 7(c)(ii) would be the result;

                        (B) A liquidation  or dissolution of or appointment of a
            receiver,  rehabilitator,  conservator  or similar  person for,  the
            Corporation; or

                        (C) An agreement  for the sale or other  disposition  of
            all or  substantially  all of the assets of the  Corporation  to any
            Person (other than a transfer to a subsidiary of the Corporation).

      Notwithstanding  anything contained in this Agreement to the contrary,  if
RIESENFELD's  employment  is  terminated  prior  to  a  Change  in  Control  and
RIESENFELD reasonably  demonstrates that such termination (i) was at the request
of a third  party who has  indicated  an  intention  or taken  steps  reasonably
calculated to effect a Change in Control and who effectuates a Change in Control
(a  "Third  Party")  or  (ii)  otherwise  occurred  in  connection  with,  or in
anticipation  of,  a Change  in  Control  which  actually  occurs,  then for all
purposes  of this  Agreement,  the date of a Change in Control  with  respect to
RIESENFELD shall mean the date immediately prior to the date of such termination
of RIESENFELD's employment.

            (d) "Good Reason" Defined.  "Good Reason" shall mean the occurrence,
whether or not after a Change in  Control,  of any of the  events or  conditions
described below:

                  (i) a  change  in  RIESENFELD's  status,  title,  position  or
      responsibilities  (including reporting  responsibilities) which represents
      an adverse change from his status,  title, position or responsibilities as
      in effect  immediately prior to such change;  the assignment to RIESENFELD
      of any duties or responsibilities  which are inconsistent with his status,
      title, position or responsibilities as in effect immediately prior to such
      change;  or any  removal of  RIESENFELD  from or failure to  reappoint  or
      reelect him to any of such offices or positions;

                  (ii) any failure to award  RIESENFELD  bonus  payments  and/or
      increases in base salary in a manner  consistent  with the practice of the
      Corporation prior to such failure;

                  (iii) the  Corporation's  requiring  RIESENFELD to be based at
      any place outside the United States, except for reasonably required travel
      on the  Corporation's  business which is not materially  greater than such
      travel requirements prior to such time;

                  (iv) the failure by the  Corporation to (a) continue in effect
      (without  reduction in benefit  level,  and/or reward  opportunities)  any
      material  compensation  or

                                       6
<PAGE>

      employee  benefit plan in which  RIESENFELD was  participating at any time
      prior to such failure,  or (b) provide  RIESENFELD with  compensation  and
      benefits,  in the  aggregate,  at least equal (in terms of benefit  levels
      and/or  reward  opportunities)  to those  provided  for under  each  other
      employee  benefit  plan,  program  and  practice in which  RIESENFELD  was
      participating at any time prior to such failure; or

                  (v) any material breach by the Corporation of any provision of
      this  Agreement  which is not cured within ten (10) days after the receipt
      of written notice by the Corporation of a description of the breach.

      8.  Payment  Terms.  Payment of any amounts to which  RIESENFELD  shall be
entitled  pursuant to the  provisions of Sections 6 and 7 shall be made no later
than sixty (60) days  following  receipt of notice of  termination  or the event
giving rise to such termination.  Any amounts payable pursuant to Sections 6 and
7 which are not made within the period  specified  in this  Section 8 shall bear
interest  at a rate  equal  to the  lesser  of (i)  the  maximum  interest  rate
allowable  pursuant to applicable law or (ii) five points above the "prime rate"
of interest as published from  time-to-time  in the Eastern  Edition of the Wall
Street Journal.

      9. Benefits.

            (a) General. Except if RIESENFELD resigns without Good Reason (other
than retirement on or after the age of 62), in the event RIESENFELD's employment
with the  Corporation is terminated for any reason prior to the end of the Term,
RIESENFELD and his dependents, if any, will continue to participate in any group
health plan sponsored by the Corporation in which  RIESENFELD was  participating
on the date of such  termination,  at a cost to  RIESENFELD  and his  dependents
equal to the amount charged by the Corporation to similarly  situated  employees
while employed by the Corporation,  for the remainder of the Initial Term or, if
termination  occurs  within  an  Additional  Term,  for  the  remainder  of such
Additional  Term.  Thereafter,  RIESENFELD and his dependents,  if any, shall be
entitled to elect to continue such health coverage,  at a cost to RIESENFELD and
his  dependents  equal to the amount  charged by the  Corporation  to  similarly
situated employees while employed by the Corporation,  for the longest period of
time  permitted  by the agents of the  Corporation  who  arrange for such health
coverage,  with such period to last at least twelve (12) months from the date of
termination.  Upon  termination  for any reason,  in addition to any payments to
which RIESENFELD may be entitled upon termination of his Employment  pursuant to
any provision of this  Agreement,  RIESENFELD  shall be entitled to any benefits
under any pension, supplemental pension, savings, or other employee benefit plan
(other than life insurance) in which RIESENFELD was participating on the date of
any such termination.

            (b) Other  Benefits.  In addition to the rights  provided in Section
9(a), in the event of a termination of  RIESENFELD's  employment for any reason,
RIESENFELD  shall  retain  his  rights  under the  "Managers  Insurance  Scheme"
pursuant to Section  4(c) and to the payment of  reasonable  moving  expenses to
Israel  pursuant  to  Section  4(d),  and shall  retain  his use of the  Company
automobile provided under Section 4(e) for the remainder of its lease term. Such

                                       7
<PAGE>

benefits, together with the benefits provided in Section 9(a), shall be referred
to herein, collectively, as "Other Compensation".

      10. Confidentiality.

            (a) "Corporation  Information"  Defined.  "Corporation  Information"
means  all  information,   knowledge  or  data  of  or  pertaining  to  (i)  the
Corporation, its employees and all work undertaken on behalf of the Corporation,
and (ii) any other person, firm, corporation or business organization with which
the  Corporation  may do  business  during  the Term,  that is not in the public
domain (and whether  relating to methods,  processes,  techniques,  discoveries,
pricing, marketing or any other matters).

            (b) Confidentiality.  RIESENFELD hereby recognizes that the value of
all trade secrets and other  proprietary  data and all other  information of the
Corporation not in the public domain  disclosed by the Corporation in the course
of his employment with the Corporation is attributable substantially to the fact
that such  confidential  information is maintained by the  Corporation in strict
confidentiality  and  secrecy  and would be  unavailable  to others  without the
expenditure of substantial time, effort or money.  RIESENFELD therefore,  except
as provided in the next two sentences, covenants and agrees that all Corporation
Information  shall be kept secret and confidential at all times during and after
the end of the Term and shall not be used or  divulged  by him outside the scope
of his employment as contemplated  by this Agreement,  except as the Corporation
may  otherwise  expressly  authorize  by action of the Board.  In the event that
RIESENFELD is requested in a judicial, administrative or governmental proceeding
to disclose any of the  Corporation  Information,  RIESENFELD  will  promptly so
notify the Corporation so that the  Corporation  may seek a protective  order or
other  appropriate  remedy  and/or  waive  compliance  with this  Agreement.  If
disclosure of any of the  Corporation  Information  is required,  RIESENFELD may
furnish the material so required to be furnished,  but  RIESENFELD  will furnish
only that portion of the Corporation Information that legally is required.

      11.   Successors and Assigns.

            (a)  RIESENFELD.  This  Agreement  is a personal  contract,  and the
rights and interests  that the Agreement  accords to RIESENFELD may not be sold,
transferred,  assigned, pledged,  encumbered, or hypothecated by him. All rights
and benefits of RIESENFELD shall be for the sole personal benefit of RIESENFELD,
and no other  person  shall  acquire  any right,  title or  interest  under this
Agreement  by reason of any sale,  assignment,  transfer,  claim or  judgment or
bankruptcy proceedings against RIESENFELD. Except as so provided, this Agreement
shall inure to the benefit of and be binding  upon  RIESENFELD  and his personal
representatives, distributees and legatees.

            (b) The  Corporation.  This  Agreement  shall  be  binding  upon the
Corporation  and inure to the benefit of the  Corporation  and of its successors
and assigns.

      12.   Entire  Agreement.  This Agreement  represents the entire  agreement
between the parties concerning  RIESENFELD's employment with the Corporation and
supersedes all prior

                                       8
<PAGE>

negotiations,  discussions,  understandings  and agreements,  whether written or
oral, between  RIESENFELD and the Corporation  relating to the subject matter of
this Agreement,  including,  without limitation, the Employment Agreement, dated
as of October 1, 1992,  between the Corporation and RIESENFELD.  Notwithstanding
the foregoing, the Benefit Document shall not be superseded.

      13.   Amendment or  Modification;  Waiver.  No provision of this Agreement
may be amended or waived unless such amendment or waiver is agreed to in writing
signed by RIESENFELD and by a duly  authorized  officer of the  Corporation.  No
waiver by any party to this  Agreement  of any  breach by  another  party of any
condition  or  provision  of this  Agreement to be performed by such other party
shall be deemed a waiver of a similar or  dissimilar  condition  or provision at
the same time, any prior time or any subsequent time.

      14.   Notices.  Any notice to be given  under this  Agreement  shall be in
writing and delivered  personally or sent by overnight  courier or registered or
certified mail,  postage  prepaid,  return receipt  requested,  addressed to the
party  concerned at the address  indicated  below,  or to such other  address of
which such party subsequently may give notice in writing:

If to RIESENFELD:             Gad Riesenfeld
                              30 South Adelaide Street, Apt. PH-L
                              Highland Park, NJ  08904-1606

If to the Corporation:        Pharmos Corporation
                              99 Wood Avenue South, Suite 301
                              Iselin, NJ 08630
                              Attention: President

with a copy to:               Ehrenreich Eilenberg & Krause LLP
                              11 East 44th Street
                              New York, NY 10017
                              Attention: Adam D. Eilenberg, Esq.

      Any notice  delivered  personally or by overnight  courier shall be deemed
given on the date delivered and any notice sent by registered or certified mail,
postage  prepaid,  return receipt  requested,  shall be deemed given on the date
mailed.

      15. Severability. If any provision of this Agreement or the application of
any such  provision to any party or  circumstances  shall be  determined  by any
court of competent  jurisdiction to be invalid and  unenforceable to any extent,
the remainder of this  Agreement or the  application  of such  provision to such
person or  circumstances  other  than those to which it is so  determined  to be
invalid and  unenforceable  shall not be  affected,  and each  provision of this
Agreement  shall be  validated  and  shall be  enforced  to the  fullest  extent
permitted by law. If for any reason any provision of this  Agreement  containing
restrictions  is held to  cover an area or to be for a  length  of time  that is
unreasonable  or in any other way is  construed to be too broad or to any extent
invalid, such provision shall not be determined to be entirely null, void and of
no effect;  instead,  it is the

                                       9
<PAGE>

intention and desire of both the Corporation and RIESENFELD  that, to the extent
that the provision is or would be valid or enforceable under applicable law, any
court of competent  jurisdiction  shall  construe  and  interpret or reform this
Agreement to provide for a restriction having the maximum enforceable area, time
period and such other constraints or conditions (although not greater than those
contained  currently  contained  in  this  Agreement)  as  shall  be  valid  and
enforceable under the applicable law.

      16.  Survivorship.  The respective  rights and  obligations of the parties
hereunder  shall  survive  any  termination  of  this  Agreement  to the  extent
necessary to the intended preservation of such rights and obligations.

      17. Headings.  All descriptive headings of sections and paragraphs in this
Agreement are intended solely for convenience of reference,  and no provision of
this  Agreement is to be construed by reference to the heading of any section or
paragraph.

      18. Withholding Taxes. All salary, benefits,  reimbursements and any other
payments to RIESENFELD  under this Agreement  shall be subject to all applicable
payroll  and  withholding  taxes and  deductions  required  by any law,  rule or
regulation of and federal, state or local authority.

      19.  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 constitute one and same instrument.

      20. Applicable Law; Jurisdiction.  The laws of the State of New York shall
govern  the  interpretation,  validity  and  performance  of the  terms  of this
Agreement,  without  reference to rules  relating to conflicts of law. Any suit,
action or proceeding against  RIESENFELD with respect to this Agreement,  or any
judgment entered by any court in respect thereof, may be brought in any court of
competent jurisdiction in the State of New York, as the Corporation may elect in
its sole discretion, and RIESENFELD hereby submits to the exclusive jurisdiction
of such courts for the purpose of any such suit, action, proceeding or judgment.

          [THE BALANCE OF THIS PAGE HAS BEEN LEFT BLANK INTENTIONALLY]

                                       10
<PAGE>

      IN WITNESS WHEREOF,  the parties hereto have executed this Agreement as of
the date first written above.

                              /s/ Gad Riesenfeld
                              ----------------------------------
                              GAD RIESENFELD

                              PHARMOS CORPORATION

                              By:   /s/ Haim Aviv
                                    -----------------------------
                                    Haim Aviv
                                    Chairman and Chief Executive Officer

                                       11

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