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                              EMPLOYMENT AGREEMENT

                  EMPLOYMENT AGREEMENT dated September 12, 2000, by and among
Spyonit.com, Inc., a corporation organized under the laws of Delaware (the
"COMPANY") and a wholly owned subsidiary of 724 Solutions Inc., an Ontario,
Canada corporation ("PARENT" and, together with the Company and its
affiliates, the "COMPANIES"), Parent and Richard W. Costolo (the "EMPLOYEE").

                                   WITNESSETH:

                  WHEREAS, the Company desires to continue to employ the
Employee, and Employee desires to accept such employment, on the terms and
subject to the conditions hereinafter set forth; and

                  WHEREAS, this Agreement will be contingent upon the close
of the transaction contemplated by the Agreement and Plan of Merger and
Reorganization, dated the date hereof (the "MERGER AGREEMENT"), by and among
Parent, Serpent Acquisition Corp., a Delaware corporation, and the Company,
pursuant to which Serpent Acquisition Corp. will merge with and into the
Company the "MERGER").

                  WHEREAS, the Employee has been employed by the Company and
his or her continuing services are necessary to maintain the value of the
Company; and

                  WHEREAS, the Employee, a stockholder of the Company, has
agreed to exchange his or her shares of common stock of the Company for cash
and shares of common stock of Parent pursuant to the Merger Agreement.

                  NOW, THEREFORE, in consideration of the mutual covenants
hereinafter contained, the parties hereto agree as follows:

                  1. EMPLOYMENT; TERM. The Company hereby employs the
Employee, and the Employee hereby accepts employment with the Company, in
accordance with the terms and subject to the conditions set forth herein. The
term of the Employee's employment hereunder shall commence the date the
Merger becomes effective, which shall be the Employee's first date of
employment with the Company (the "START DATE"), and shall continue until
terminated in accordance with the provisions of Section 6.

                  2. DUTIES. During the Term, the Employee shall serve in the
position set out in Section 1 of Schedule A and/or, subject to Section 6.3
hereof, in such other positions to which the Company from time to time may
place him or her, and shall devote his or her full business time and best
efforts to the business and affairs of the Company in a good faith effort to
increase the net profits of the Company and increase the value of the Company
to its stockholders; PROVIDED, HOWEVER, that any failure of the Company to
increase its net profits or increase its value to its stockholders shall not
by itself constitute a breach of the duties of the Employee. The Employee
shall not during the term of this Agreement be engaged in any other business
activity, whether or not such business activity is pursued for gain, profit
or other pecuniary advantage, unless written approval is first secured from
the board of directors of the Company.

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                  3. COMPENSATION; STOCK OPTIONS.

                  3.1 SALARY; BONUS; AND TRAVEL EXPENSES. The Company shall
pay the Employee a base salary (the "BASE SALARY") set out in Section 2 of
Schedule A in accordance with the Company's standard payroll practices and
subject to all legally required or customer withholdings. The Base Salary
shall be reviewed annually in accordance with the standard practice of the
Company. In addition, the Employee shall be eligible to receive a bonus up to
the amount listed in Section 2 of Schedule A pursuant to a bonus plan from
time to time in effect for similar employees of the Company. The Company
agrees to reimburse the Employee for all reasonable and necessary travel,
business entertainment and other business expenses incurred by the Employee
in connection with the performance of his or her duties under this Agreement.
Such reimbursements shall be made by the Company upon submission by the
Employee of all required documentation in accordance with the Company's
standard procedures.

                  3.2 STOCK OPTIONS. Subject to the approval of Parent's
Board of Directors, Parent shall grant to the Employee, on or about the Start
Date, an option to purchase the number of shares of Parent's Common Stock set
out in Section 3 of Schedule A. The option will be on the terms and subject
to the conditions of Parent's applicable stock option plan, and the
applicable stock option agreement which the Employee must agree to and
execute as a condition of the stock option agreement.

                  3.3 RETENTION BONUS. In addition to any bonus payable
pursuant to Section 3.1, the Employee shall be entitled to receive from the
Company a retention bonus ("RETENTION BONUS") set out in Section 4 of
Schedule A on the first, second and third anniversaries of the date hereof,
subject in each case to all legally required or customary withholdings, and
provided, that in each case the Employee shall continue to be employed by the
Company or any of its subsidiaries or affiliates on such date, except as
provided in Section 6.2 or 6.3 hereof. The obligation of the Company to pay
the Retention Bonus is hereby guaranteed by Parent.

                  4. BENEFITS. Parent shall maintain life/disability
insurance for the benefit of the Employee in the amount of the Retention
Bonus to be paid to the Employee pursuant to Section 3.3 hereof.
Additionally, the Employee shall be entitled to participate in any plans
maintained from time to time by Parent for the benefit of Parent's employees,
including, but not limited to, those pertaining to group life, accident,
dental prescription, sickness and medical, and long term disability
insurance, provided that premiums for such coverages are reasonable, as
determined by Parent in its sole discretion. The Employee will be required to
pay for the premiums for Parent's mandatory long term disability (LTD) plan.
The premium will be automatically deducted from the Employee's pay cheque.

                  5. VACATIONS; WORKING FACILITIES. (a) The Employee shall be
entitled to three (3) weeks of vacation in each calendar year. Such vacations
shall be taken at such time as the Company may from time to time reasonably
approve, having regard to the operations of the Company. Vacation time shall
be cumulative, in accordance with the Company's standard policies.

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                 (b) The Employee shall be furnished with office space,
furnishings,  secretarial assistance and such other facilities and services
as the Company shall decide are reasonably necessary for the performance of
the Employee's duties.

                  6. TERMINATION. Notwithstanding the provisions of Section 1
of this Agreement, the Employee's employment hereunder may terminate under
the following circumstances:

                  6.1 TERMINATION BY THE COMPANY FOR "CAUSE". The Company may
terminate the Employee's employment hereinunder for Cause at any time, upon
written notice to the Employee setting forth in reasonable detail the nature
of such Cause. For purposes of this Agreement, "CAUSE" shall mean: (i) the
willful and continued failure of the Employee to perform the Employee's
duties with the Company (other than any such failure resulting from
incapacity due to physical or mental illness), after a written demand for
performance is delivered to the Employee by the Company which specifically
identifies the manner in which the Company believes that the Employee has not
performed the Employee's duties and such failure is not cured within fifteen
(15) calendar days alter receipt of such written demand; (ii) material acts
of misconduct, including without limitation, unauthorized use or disclosure
of Company confidential information, fraud, embezzlement or harassment; (iii)
material breach of any provision of this Agreement; or (iv) conviction of any
felony or of any other crime involving business matters. Upon the termination
for Cause of Employee's employment, the Company shall have no further
obligation or liability to the Employee other than for salary earned under
this Agreement prior to the date of termination, and any accrued but unused
vacation.

                  6.2 TERMINATION BY THE COMPANY WITHOUT CAUSE. The
Employee's employment hereunder may be terminated without Cause by the
Company upon written notice to the Employee, PROVIDED, HOWEVER, that if the
Company terminates the Employee's employment without Cause, the Company shall
continue to pay the Employee the Retention Bonus in accordance with Section 4
of Schedule A.

                  6.3 TERMINATION BY THE EMPLOYEE. The Employee may terminate
his or her employment hereunder upon two week's written notice to the Company
for Good Reason or otherwise; PROVIDED, HOWEVER, that in the event the
Employee gives written notice to the Company of his or her termination of
employment within one (1) month of a relocation of the Employee's worksite to
a location 50 miles or more from the city of Chicago, Illinois, the Employee
shall be entitled to continue to receive his or her Base Salary for a period
of 6 months from the effective date of such termination and continue to
receive the Retention Amounts in accordance with Section 4 of Schedule A, and
PROVIDED FURTHER, HOWEVER, that if the Employee terminates his or her
employment for Good Reason, the Company shall continue to pay the Employee
the Retention Bonus in accordance with Section 4 of Schedule A. For purposes
of this Agreement, "GOOD REASON" shall mean (i) any willful and continued
failure by the Company to comply with any of the provisions of this
Agreement, other than an isolated, insubstantial and inadvertent failure not
occurring in bad faith, and such failure is not cured within fifteen (15)
days after receipt of notice thereof given by the Employee; (ii) any
purported termination by the Company of the Employee's employment otherwise
than as expressly permitted by this Agreement or (iii) the assignment of the
Employee to a position, or the assignment of duties to the Employee involving
a substantial amount of the Employee's time, which are materially

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inconsistent with the education and experience of the Employee and the
general area of business in which tae Employee currently is assigned,
excluding for this purpose an isolated and insubstantial action not taken in
bad faith and which is remedied by the Company promptly after receipt of
notice thereof given by the Employee. The rights granted to Employee pursuant
to this Section 6.3 with respect to any relocation of the Employee's worksite
shall only apply for a period of 36 months from the Start Date.

                  6.4 DISABILITY. If, as a result of sickness or other
disability, the Employee shall be unable to perform the Employee's duties as
herein provided for a period of ninety (90) consecutive days or ninety (90)
nonconsecutive days during any twelve (12) month period during the term of
this Agreement, then the Company may at its option and subject to any
applicable legal requirements relating to disabilities, terminate the
Employee's employment. In the event of such termination, the Company shall
only be required to pay to the Employee the compensation set forth in Section
3 hereof accrued up to the date of termination. In no event shall the Company
be obligated to pay the Employee any Incentive Compensation occurring or
accruing after the date of the Employee's termination.

                  6.5 DEATH. If the Employee dies during the term hereof, the
Company shall only be required to pay to the Employee the compensation set
forth in Section 3 hereof accrued up to the date of death. In no event shall
the Company be obligated to pay the Employee any Incentive Compensation
occurring or accruing after the date of the Employee's death.

                  7.  CONFIDENTIAL INFORMATION; NONDISCLOSURE; OTHER
OBLIGATIONS.

                      7.1 CONFIDENTIAL INFORMATION. The Employee acknowledges
that during the course of his or her employment, he or she will have access
to information about the Companies, and that his or her employment with the
Company will bring him or her into close contact with many confidential
affairs of the Companies and the Companies' customers, including, without
limitation, the following (collectively, "CONFIDENTIAL INFORMATION"): (i) any
idea, proposal, plan, information, procedure, technique, formula, technology
or method of operation, any written or oral information of a proprietary
nature, and any intellectual property owned or licensed by the Companies or
relating to the Companies or any of their principals' or affiliates'
business, projects, operations, finances, activities or affairs, whether of a
technical nature or not (including trade secrets, know-how, processes, and
other technical or business information), or any proposed change thereto,
(ii) any other information disclosed to the Employee by the Companies and
designated by the Companies as confidential, and (iii) any other information
that the Employee knows or should know that the Companies wish to keep
confidential. By way of illustration, but not limitation, Confidential
Information includes, without limitation, information regarding (i) all of
the computer software and technologies, systems, structures, architectures,
processes, formulae, compositions, improvements, devices, know-how,
inventions, discoveries, concepts, ideas, designs, methods, and information
and databases developed, acquired, owned, produced or practiced at any time
by the Companies or any affiliate thereof, software programs and
documentation licensed by third parties to the Companies, and any other
similar information or material, (ii) the business or financial condition of
the Companies or directly or indirectly related to the Company's companies or
investments or its internal administrative, billing and accounting systems;
(iii) customer lists,

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telemarketing lists, vendor lists, personnel information and policies and
procedures; (iv) the Companies' products and services; (v) business or
financial information directly or indirectly related to the Companies'
companies and investments and (vi) other processes and procedures employed by
the Companies. Such Confidential Information does not include information
that is readily available to the public.

                      7.2 NONDISCLOSURE. In recognition of the foregoing,
during and after the termination of his or her employment and until such time
as the Confidential Information is generally published or is available to the
general public other than through the Employee's unauthorized disclosure,
regardless of the reason for any termination of employment, the Employee
shall not, without the prior written consent of the Company, disclose or use
or make available for anyone to use (except in the course of his or her
employment in furtherance of the business of the Company) any Confidential
Information, and the Employee shall during the continuance of his or her
employment by the Company use his or her best efforts to prevent the
unauthorized publication or misuse of any Confidential Information; provided,
however, that Confidential Information shall not include any information (i)
currently in the public domain (other than as a result of a breach of this
Agreement), or (ii) independently developed by the Employee, outside of the
scope of his or her employment, without violating any of the provisions of
this Section 7 or the Agreement.

                      7.3 NONCOMPETITION. The Employee acknowledges and
recognizes the highly competitive nature of the Company's business, that
access to the Company's confidential records and proprietary information as
well as his or her skills, know-how and business knowledge render him or her
special and unique within the Company's industry, and that he or she will
have the opportunity to develop substantial relationships with existing and
prospective customers of the Company during the course of and as a result of
his or her employment. In light of the foregoing, during the course of
employment and for a period of two (2) years after the date of termination of
employment for any reason (PROVIDED, HOWEVER, that in the event of any
termination after the third anniversary of the Start Date, such period shall
be for one (1) year), the Employee agrees that the Employee shall not (1) own
or have any interest, directly or indirectly, in, or act as a manager,
officer, director, employee, consultant, agent or representative of, or
assist in any way or in any capacity, any person, firm, association,
partnership, corporation, limited liability company or other entity which (a)
sells or provides products or services either for wireless software
infrastructure or in competition with the business of the Company as
conducted on the Start Date or as proposed to be conducted on the Start Date,
or (b) solicits business from any persons who were customers of the Companies
during the two year period prior to such termination; or (ii) directly or
indirectly entice, induce or in any manner influence any person who is, or
shall be, in the service of the Companies to leave such service for the
purpose of engaging in a business, or being employed by or associated with
any person, firm, association, partnership, corporation, limited liability
company or other entity, which is in competition with the Companies.

                      7.4 REASONABLENESS OF PROVISIONS. The Employee
recognizes and acknowledges that the restrictions and limitations set forth
in this Section 7 are legitimate and fair in light of the consideration he or
she is receiving in connection with the Merger and his or her access to
Confidential Information, his or her unique skills, know-how and knowledge,
his or her substantial contacts with customers of the Company and the
Company's need to develop and

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market its services and products. The Employee further acknowledges that the
customers of the Companies are located throughout the United States and that
a business competitive with the Companies may be carried on anywhere within
the United States as a result of the unique use of telephonic, technologic
and other advanced communications techniques. Therefore, the Employee
acknowledges that the geographical application of the provisions and
restrictions contained in this Section 7 are reasonable under the
circumstances. The Employee further acknowledges that: (i) in the event his
or her employment with the Company terminates for any reason, he or she will
be able to earn a livelihood without violating the foregoing restrictions and
(ii) this ability to earn a livelihood without violating such restrictions is
a material condition to his or her employment with the Company.

                      7.5 PROPRIETARY INFORMATION AND INVENTIONS AGREEMENT.
The Employee's employment with the Company is contingent upon the Employee's
execution of Parent's Proprietary Information, Inventions and
Non-Solicitation Agreement, a copy of which is attached hereto as Schedule B.
In addition, to the extent that the Employee has any rights to any
intellectual property that relates to the business of the Company and that:
(i) was developed while the Employee provided services to the Company; or
(ii) was incorporated into the products or other intellectual property of the
Company, the Employee hereby agrees to irrevocably assign to the Company all
worldwide rights, title and interest to such intellectual property.

                      7.6 NO OTHER OBLIGATIONS. The Employee represents that
he or she is not precluded or limited in his or her ability to undertake or
perform the duties described herein by any contract, agreement or restrictive
covenant. The Employee covenants that he or she shall not intentionally and
knowingly employ the trade secrets or proprietary information of any other
person in connection with this employment by the Company.

                      7.7 CONFIDENTIALITY. The Employee agrees to keep
confidential the terms of this Agreement. This provision does not prohibit
the Employee from providing this information to his or her attorneys or
accountants for purposes of obtaining legal or tax advice or as otherwise
required by law or discussing the Agreement with other senior Employees of
the Company.

                      7.8 ENFORCEMENT. The Employee expressly acknowledges
that any breach or threatened breach of any of the terms and/or conditions
set forth in this Section 7 will result in substantial, continuing and
irreparable injury to the Company. Therefore, the Employee hereby agrees
that, in addition to any other remedy that may be available to the Company,
the Company shall be entitled to injunctive relief, specific performance or
ocher equitable relief in the event of any breach or threatened breach of the
terms of this Section 7. The exclusive venue for the resolution of any
disputes arising out of this Section 7 shall be in federal or state courts
located in the State of Illinois, and the parties consent to the jurisdiction
of such courts.

                      8.  REPURCHASE RIGHT.

                      8.1 GRANT. The Company is hereby granted the right (the
"REPURCHASE RIGHT"), exercisable at any time during the ninety (90)-day
period following the date the Employee's employment is terminated (i) by the
Employee (other than a termination by the Employee for Good Reason) or (ii)
by the Company for Cause, to repurchase, at a purchase

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price of $.01 per share ("PURCHASE PRICE"), all or any portion of the Shares
(as hereinafter defined). As used herein, the terms "SHARES" shall mean
36,721 shares of Parent's Common Stock received by the Employee as Third
Additional Consideration (as defined in the Merger Agreement) pursuant to the
Merger Agreement.

                      8.2 EXERCISE OF THE REPURCHASE RIGHT. The Repurchase
Right shall be exercisable by written notice delivered to the Employee prior
to the expiration of the ninety (90)-day exercise period. The notice shall
indicate the number of Shares to be repurchased and the date on which the
repurchase is to be effected, such date to be not more than thirty (30) days
after the date of such notice. The certificates representing the Shares to be
repurchased shall be delivered to the Company prior to the close of business
on the date specified for the repurchase. Concurrently with the receipt of
such stock certificates, the Company shall pay to the Employee, in cash, an
amount equal to the aggregate Purchase Price.

                      8.3 TERMINATION OF HE REPURCHASE RIGHT. The Repurchase
Right shall terminate with respect to any Shares for which it is not timely
exercised under Paragraph 8.2. In addition, the Repurchase Right shall
terminate and cease to be exercisable on the third anniversary on the date
hereof; PROVIDED, that the Repurchase Right has not become exercisable prior
to that date.

                      8.4 RECAPITALIZATION. Any new, substituted or
additional securities or other property which is by reason of any
recapitalization distributed with respect to the Shares shall be immediately
subject to the Repurchase Right, but only to the extent the Shares are at the
time covered by such right. Appropriate adjustments to reflect such
distribution shall be made to the number and/or class of Shares subject to
this Agreement and to the price per share to be paid upon the exercise of the
Repurchase Right in order to reflect the effect of any such recapitalization
upon the Company's capital structure; PROVIDED, HOWEVER that the aggregate
purchase price shall remain the same.

                      9. NOTICES. Any notice, consent, request or other
communication made or given in accordance with this Agreement shall be in
writing and shall be deemed to have been duly given when actually received
or, if mailed, three (3) days after mailing by registered or certified mail,
return receipt requested, to those listed below at their following respective
addresses or at such other address as each may specify by notice to the
others, provided that any notice of change of address shall be deemed to have
been duly given only when actually received.

                        To the Company:
                        Spyonit.com, Inc.
                        c/o 724 Solutions Inc.
                        4101 Yonge Street, Suite 702
                        Toronto, Ontario, Canada  M2P 1N6
                        Attention:  Vice President, Legal and Business Affairs
                        Telephone:  (415) 615-0724
                        Facsimile:  (415) 615-0195

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                      10. ASSIGNABILITY; BINDING EFFECT. This Agreement is a
personal contract calling for the provision of unique services by the
Employee, and neither the Employee's nor the Company's rights and obligations
hereunder may be sold, transferred, assigned, pledged or hypothecated,
PROVIDED, HOWEVER, that the Company and Parent may sell, transfer, assign,
pledge or hypothecate its rights and obligations hereunder to any affiliate
of the Company or Parent or in connection with any sale of all or
substantially all of the assets of the Company or Parent or any merger,
consolidation, exchange offer or business combination involving the Company
or Parent, PROVIDED that the Company and Parent shall remain liable for its
respective obligations hereunder to the extent the party to whom this
Agreement is assigned does not perform such obligations. In the event of any
attempted assignment or transfer of rights hereunder by the Employee contrary
to the provisions hereof (other than as may be required by law), the Company
and Parent will have no further liability for payments hereunder. The rights
and obligations of the Company and Parent hereunder will be binding upon and
run in favor of the successors and assigns of the Company and Parent.

                      11. WITHHOLDING. The Employee agrees to remit to the
Company sufficient funds to cover all applicable federal, state and local
income and employment taxes required to be withheld by the Company as a
result of the receipt by the Employee of any non-cash compensation.

                      12. COMPLETE UNDERSTANDING; AMENDMENT; WAIVER. Except
as specifically provided for herein, this Agreement constitutes the complete
understanding between the patties with respect to the subject matter hereof
and supersedes all other prior agreements and understandings, both written
and oral, between the parties with respect to the subject matter hereof, and
no statement, representation, warranty or covenant has been made by either
party with respect thereto except as expressly set forth herein. This
Agreement shall not be altered, modified, amended or terminated except by a
written instrument signed by each of the parties hereto. Any waiver of any
term or provision hereof, or of the application of any such term or provision
to any circumstances, shall be in writing signed by the party charged with
giving such waiver. Waiver by either party hereto of any breach hereunder by
the other party shall not operate as a waiver of any other breach, however
similar to the breach waived. No delay on the part of the Company or the
Employee in the exercise of any of its or his or her respective rights or
remedies shall operate as a waiver thereof, and no single or partial exercise
by the Company or the Employee of any such right or remedy shall preclude
other or further exercise thereof.

                      13. TERMINATION OF PRIOR EMPLOYMENT AGREEMENT; RELEASE
OF CLAIMS; RECEIPT OF WAGES AND OTHER COMPENSATION. The Company and the
Employee agree that the Employment Agreement previously entered into between
the Company and the Employee is hereby terminated and of no further force or
effect. The Employee hereby expressly waives, releases, acquits and forever
discharges the Company and its divisions, subsidiaries, affiliates, parents,
related entities, partners, officers, directors, shareholders, investors,
executives, managers, employees, agents, attorneys, representatives,
successors and assigns, from any and all claims, demands, and causes of
action which the Employee has or claims to have, whether known or unknown, of
whatever nature, which exist or may exist on Employee's behalf from the
beginning of time up to and including the date of this Agreement. The
Employee acknowledges


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and agrees that, prior to the Employee's execution of this Agreement, the
Employee has received payment for all wages, salary, bonuses, accrued
vacation, and all other compensation owed to the Employee by the Company. As
used in this paragraph, "claims," "demands," and "causes of action" include,
but are not limited to, claims based on contract, whether express or implied,
fraud, stock fraud, defamation, wrongful termination, estoppel, equity, tort,
retaliation, intellectual property, personal injury, spoliation of evidence,
emotional distress, public policy, wage and hour law, statute or common law,
claims for severance pay, claims related to stock options and/or fringe
benefits, claims for attorneys' fees, vacation pay, debts, accounts,
compensatory damages, punitive or exemplary damages, liquidated damages, and
any and all claims arising under any federal, state, or local statute, law,
or ordinance prohibiting discrimination on account of race, color, sex, age,
religion, sexual orientation, disability or national origin, including but
not limited to, the Age Discrimination in Employment Act, Title VII of the
Civil Rights Act of 1964 as amended, the Americans with Disabilities Act, the
Family and Medical Leave Act or the Employee Retirement Income Security Act.

14. 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 or 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 or
unenforceable, shall not be affected thereby, and each provision hereof shall be
enforced to the fullest extent permitted by law. If any provision of this
Agreement, or any part thereof, is held to be invalid or unenforceable because
of the scope or duration of or the area covered by such provision, the parties
hereto agree that the court making such determination shall reduce the scope,
duration and/or area of such provision (and shall substitute appropriate
provisions for any such invalid or unenforceable provisions) in order to mare
such provision enforceable to the fullest extent permitted by law and/or shall
delete specific words and phrases, and such modified provision shall then be
enforceable and shall be enforced. The parties hereto recognize that if, in any
judicial proceeding, a court shall refuse to enforce any of the separate
covenants contained in this Agreement, then that invalid or unenforceable
covenant contained in this Agreement shall be deemed eliminated from these
provisions to the extent necessary to permit the remaining separate covenants to
be enforced.

                      15. SURVIVABILITY. The provisions of this Agreement
which by their terms call for or reasonably contemplate performance
subsequent to termination of the Employee's employment hereunder, or of this
Agreement, shall so survive such termination.

                      16. GOVERNING LAW. This Agreement shall be governed by
and construed in accordance with the laws of the State of Illinois without
regard to its conflict of laws provisions.

                      17. TITLES AND CAPTIONS. All paragraph titles or
captions in this Agreement are for convenience only and in no way define,
limit, extend or describe the scope or intent of any provisions hereof.

                      18. REMEDIES. In the event that any party hereto shall
default in the performance of any of such party's obligations hereunder, in
addition to any and all other rights or remedies which a non-defaulting party
hereto may have against such defaulting party, such defaulting party shall be
liable to the non-defaulting party for all court costs and attorneys' fees


                                       9
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incurred by the non-defaulting party in connection with the enforcement of
such non-defaulting party's rights and remedies against such defaulting party.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]



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

                    SPYONIT.COM, INC.

                    By:   /s/ [ILLEGIBLE]
                              ---------------------------



                    724 SOLUTIONS INC.

                    By:   /s/ DAVID PASIEKA
                              ---------------------------
                              Name:  David Pasieka
                              Title:  Senior Vice President - Application
                    Hosting



                    EMPLOYEE

                    /s/ RICHARD W. COSTOLO
                        ------------------
                        Richard W. Costolo



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                                   SCHEDULE A

                      COMPENSATION AND BENEFITS OF EMPLOYEE



1.       DUTIES. You shall serve in the position of Senior Vice President,
          Notification Services and/or in such other positions to which the
          Company from time to time may place you.

2.       BASE SALARY AND BONUS. Your Base Salary shall be $170,000 per year,
          paid in accordance with the Company's standard payroll practices and
          subject to all legally required or customary withholdings. You will
          also be eligible to earn a bonus of up to 20% of your Base Salary
          pursuant to a bonus from time to time in effect for similar
          Employees of the Company.

3.       STOCK OPTIONS. Subject to you and Parent entering into Parent's
          standard U.S. Option Agreement, Parent hereby grants to you:

                  (a) The option to purchase 10,000 common shares of Parent
(or the group of companies that forms Parent), at their Market Price (as
defined in the U.S. Stock Option Plan) on the date hereof, which option vests
on and continues from the first anniversary of your employment; and

                  (b) The option to purchase an additional 10,000 common
shares of Parent, at their Market Price on the date hereof, which option
vests on and continues from the second anniversary of the date hereof; and

                  (c) The option to purchase an additional 10,000 common
shares of Parent, at their Market Price on the date hereof, which option
vests on and continues from the third anniversary of the date hereof.

Please note that the terms and conditions of the Option Agreement govern the
options granted in this agreement and from time to time. In particular, you
should note that your entitlement to unvested options will be automatically
forfeited if your employment with the Company terminates for any reason.

4. RETENTION BONUSES. The Employee shall be entitled to receive a bonus equal
to (i) $225,000 on the first anniversary of the date hereof, (ii) $450,000 on
the second anniversary of the date hereof, and (iii) $400,000 on the third
anniversary of the date hereof.