AMENDMENT AGREEMENT


     Amendment Agreement made as of December 18, 1998, by and among Pharmos
Corporation,  a Nevada  corporation (the "Company"),  and Dominion Capital Fund,
Ltd. (referred to as the "Investor").

     Capitalized  terms used herein and not otherwise  defined herein shall have
the meanings given to them in the Private Equity Line of Credit  Agreement dated
as of December 10, 1998 by and among the Company,  and the Investor (the "Equity
Line Agreement").

                                   Witnesseth:

     Whereas,  the  Company,  and the  Investor  wish to amend the  Equity  Line
Agreement.

     Now,  therefore,  in consideration of the mutual covenants,  conditions and
promises contained herein, the parties agrees as follows:

1. Section 11.7 of the Equity Line  Agreement is hereby  deleted and replaced by
the following:

     "Section 11.7 Fees and Expenses. Each of the parties shall pay its own fees
and expenses  (including the fees of any attorneys,  accountants,  appraisers or
others  engaged  by such  party)  in  connection  with  this  Agreement  and the
transactions  contemplated  hereby,  except that the Company shall pay: (i) upon
the earlier to occur of (A) December 31, 1998, or (B) upon the first closing for
Initial Put Shares  (such  amount to be paid prior to all other fees,  and to be
paid out of escrow at the  Closing of such Put),  $15,000 to The  Goldstein  Law
Group PC;  (ii) on the first  Closing  Date for Put Shares to (A) Jesup & Lamont
Securities  Corporation,  (I) 0.75% of the Commitment Amount,  (II) 1.75% of the
aggregate Investment Amount for such Put, and (III) $10,000, and (B) to Caldwell
Capital Corp., (I) 0.75% of the Commitment  Amount,  (II) 1.75% of the aggregate
Investment Amount for such Put, and (III) $10,000;  and (iii) on each subsequent
Closing Date for Put Shares 1.75% of the aggregate Investment Amount of such Put
to Jesup & Lamont Securities Corporation,  and 1.75% of the aggregate Investment
Amount of such Put to Caldwell Capital Corp."

2. Except for the  provisions  of this  Amendment  Agreement,  all of the terms,
conditions,  and covenants of the Equity Line Agreement  (including all Exhibits
annexed thereto) shall remain in full force and effect.





     IN WITNESS WHEREOF, the parties hereto have caused this Amendment Agreement
to be executed by the  undersigned,  thereunto duly  authorized,  as of the date
first set forth above.


PHARMOS CORPORATION


By       /s/ Robert W. Cook                   
         ---------------------------------
         Robert W. Cook
         Vice President - Finance and
            Chief Financial Officer



                                DOMINION CAPITAL FUND, LTD.


                                By   /s/ Inter Caribbean Services (Bahamas)
                                     --------------------------------------
                                     Inter Caribbean Services (Bahamas) Ltd.
                                     Director