Sample Business Contracts


Consulting Agreement - Pharmos Corp. and Stephen C. Knight

Consulting Forms


                               Pharmos Corporation
                         99 Wood Avenue South, Suite 301
                                Iselin, NJ 08830



                                                             As of April 7, 2000

Dr. Stephen C. Knight
Epix Medical, Inc.
71 Rogers Street
Cambridge, MA 02142

         Re:      Pharmos Corporation (the "Company")

Dear Stephen:

     I am  writing  to  confirm  our  agreements  relating  to your  outstanding
warrants and options. You currently have 3,750 unvested ten-year warrants, which
were granted in 1997 at an exercise price of $1.59 per share. These warrants are
scheduled to vest on February 12, 2001.

     In addition,  you have 11,250  ten-year  stock  options  which were granted
under the Company=s  1997 Stock Option Plan (the "Plan") in September 1998 at an
exercise  price of $1.75 per share,  of which 3,750 shares each are scheduled to
vest on September 17, 2000,  2001 and 2002. You also have 10,000  ten-year stock
options  granted under the Plan in April 1999 at an exercise  price of $1.25 per
share, of which 2,500 shares each are scheduled to vest on April 15, 2000, 2001,
2002 and 2003. The shares underlying both the warrants and options granted under
the Plan are currently registered.

     As we  discussed,  you have  informed  us that due to your  increased  time
commitments  at Epix and as a member  of other  boards,  you will be  unable  to
continue serving as a director of the Company. However, you have agreed to serve
as an unpaid  consultant  on financial  and  strategic  matters  following  your
resignation  through December 31, 2000. In connection  therewith,  you will make
yourself  available  by  telephone  to  Haim  Aviv  and to me and  other  senior
management.  If we request you to appear  periodically for meetings or the like,
we will  reimburse  you for  your  time  at a  mutually  agreed  upon  level  of
compensation.  In  consideration  for your  services,  all of your  warrants and
options,  as listed above,  will become fully vested as of the date hereof,  and
consistent  with their existing  terms,  will not expire until 90 days after the
termination  of your  status  as  consultant  with the  Company.  Further,  your
warrants  and  options  will  expire  one year  after the end of your  tenure as
director  regardless  of any death or  termination  provisions  provided  for in
either the warrant or option  agreements.  This letter  shall be deemed to amend
your Warrant  Agreement and Option Grants,  and except as provided herein,  such
Warrant Agreement and Option Grants remain in full force and effect.

     Please  acknowledge  your  acceptance  of  the  foregoing  by  signing  and
returning a copy of this letter to me.

                                          PHARMOS CORPORATION

AGREED AND ACCEPTED:
                                          /s/ Gad Riesenfeld
                                          ------------------
                                          By: Gad Riesenfeld
/s/ Stephen C. Knight                     President and Chief Operating Officer
---------------------
Stephen C. Knight

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