Document:

Collaboration and Services Agreement

 Exhibit 10.1 
  
 COLLABORATION AND SERVICES AGREEMENT 
  
 This COLLABORATION AND SERVICES AGREEMENT (the “Agreement”), dated as of November 28, 2005 (the
“Effective Date”), is by and between NEUROBIOLOGICAL TECHNOLOGIES, INC., a Delaware corporation (“NTI”) and NEUTRON LTD., a Bermuda limited company (“CELTIC”). NTI and CELTIC are sometimes
hereinafter referred to individually as a “Party” and collectively as the “Parties.” 
  
 WITNESSETH: 
  
 WHEREAS, pursuant to the terms of that certain Asset Purchase Agreement, dated as of September 19, 2005 (the “Purchase Agreement”),
by and between NTI and CELTIC, NTI has sold, transferred, and assigned to CELTIC certain assets relating to the pharmaceutical product XERECEPT® (as further defined in the Purchase Agreement, the “Product”); and 
  
 WHEREAS, CELTIC desires that NTI provide, and NTI has agreed to provide, certain services in connection with the research
and development of the Product; and 
  
 WHEREAS, NTI currently has
the technology, know-how, personnel, and other resources useful in the development of the Product. 
  
 NOW, THEREFORE, in consideration of the above premises and the covenants contained herein and for other good and valuable consideration the receipt and
sufficiency of which is hereby acknowledged, the Parties agree as follows: 
  
 ARTICLE 1 
 DEFINITIONS 
  
 1.1 Certain Definitions. When used in this Agreement, each of the following terms, whether used in the singular or
plural, shall have the meanings set forth in Section 1.1 or referred to in Section 1.2. Other capitalized terms used but not defined herein shall have the meanings set forth in the Purchase Agreement. 
  
 “Calendar Quarter” means any three (3) month period
ending on March 31, June 30, September 30 or December 31. 
  
 “Collaboration Inventions” means and collectively includes all Intellectual Property Rights, including information, trade secrets, data, inventions, technology, know-how, and pre-clinical,
clinical, chemical, pharmacological, toxicological, assay, control, manufacturing, and adverse event information, concerning or relating to the Product that are made, conceived and/or reduced to practice, actually and/or constructively, by
employees, consultants or subcontractors of either Party in conducting the Collaboration Work that are necessary or useful for the research, development, registration, manufacture, use, sale or other disposition of the Product.  

 
 “Commercial Product” means the Product with Marketing
Approval with respect to any country in the Territory. 

 “Dollars” or numbers preceded by the symbol “$” mean amounts in United States
Dollars. 
  
 “First Indication” means the
treatment of Peritumoral Brain Edema. 
  
 “NTI
Knowledge” shall mean the actual knowledge of any of NTI’s officers or senior managers. 
  
 “NTI Technology” means any Intellectual Property Rights which were owned or licensed by NTI prior to the Effective Date, including
Licensed IP but expressly excluding the Acquired Intellectual Property, or which are developed by NTI subsequent to the Effective Date and are outside the scope and unrelated to the Product or the subject matter of this Agreement. For the avoidance
of doubt, NTI Technology expressly excludes any Collaboration Inventions. 
  
 “Territory” means, collectively, the U.S. Territory and the ROW Territory. 
  
 “ROW Territory” shall mean all nations, states, possessions and territories that are not a part of the U.S. Territory. 
  
 “U.S. Territory” shall mean the United States, its
territories and possessions, including the Commonwealth of Puerto Rico. 
  
 1.2 Other Definitions. Certain other terms are defined in the Sections cited below: 
  

			
	 Definition

	  	 Section

	 Collaboration Work
	  	2.1
	 Confidential Information
	  	8.1
	 Damages
	  	6.1
	 Effective Date
	  	Preamble
	 Notice Period
	  	9.3
	 Product
	  	Preamble
	 Purchase Agreement
	  	Preamble
	 Research Expenses
	  	2.6
	 Steering Committee
	  	2.2(a)
	 Term
	  	9.1

  
 1.3
Interpretation. The headings preceding the text of Articles and Sections included in this Agreement and the headings to the Schedules hereto are for convenience of reference only and should not be deemed a part of this Agreement or be given
any effect in interpreting this Agreement. The use of masculine, feminine or neuter gender or the single or plural form of words herein shall not limit the applicability of any provision of this Agreement to such gender or form. The use of the term
“including” or “include” shall in all cases herein mean “including, without limitation,” or “include, without limitation,” respectively. Underscored references to Articles, Sections or Schedules shall refer to
those portions of this Agreement. The use of the terms “hereunder,” “hereof” and words of similar import shall refer to this Agreement as a whole and not to any particular Article or Section of, or Schedule to, this Agreement.

  
 ARTICLE 2 
 PRODUCT DEVELOPMENT 
  
 2.1 General. The Steering Committee will have sole authority and responsibility for the clinical development of the Product for all indications,
including the First Indication (collectively, the “Collaboration Work”). Subject to the Purchase Agreement, CELTIC will have sole authority and responsibility for any commercialization of the Product in each jurisdiction within the
Territory that CELTIC determines in its sole discretion, is feasible and commercially attractive for the commercialization of the Product, such authority and responsibility to include the filing and maintenance of any and all applicable Marketing
Approvals. The Collaboration Work will be allocated among the Parties in accordance with Section 2.3 and Schedule A hereto. 
  
 2.2 Steering Committee. 
  
 (a) Promptly after the Effective Date, the Parties shall form a steering committee (the “Steering Committee”) to which
CELTIC shall have the right to designate such number of representatives as CELTIC deems appropriate from time to time and NTI shall have the right to designate two (2) representatives. CELTIC’s representatives shall include one or more of
its managing partners from time to time and NTI’s representatives shall be its chief executive officer and such other representative as it deems fit from time to time. CELTIC shall designate the Chairman of the Steering Committee. Subject to
the foregoing, the respective individual representatives of any Party to the Steering Committee may be removed and replaced from time to time at the discretion of such Party by sending written notice of such action to the other Party. Each
representative of NTI and CELTIC shall have one (1) vote to cast in matters coming to a vote before the Steering Committee. Except as provided in Section 2.11, all decisions of the Steering Committee shall be made by majority vote of the
representatives on the Steering Committee. In the event an issue arises that the Steering Committee cannot resolve by majority vote, the Chairman shall cast an additional tie-breaking vote; provided, however, that no such vote shall require NTI to
spend money or devote human resources above those committed herein, without NTI’s express written approval. 
  
 (b) The Steering Committee shall meet once per Calendar Quarter, or at such other intervals as the Steering Committee may decide, at such
times and at such locations as shall be decided by the Steering Committee, provided such meetings shall be held only outside of the territories of the United States or the United Kingdom. Meetings may be held in person or via teleconference.
At least fifteen (15) business days prior to each regularly scheduled meeting of the Steering Committee, the Steering Committee shall cause a written report to be submitted to the Parties concerning the progress of any Collaboration Work, such
report to include a summary of (i) progress achieved since the previous meeting; (ii) critical issues or problems encountered or anticipated; and (iii) a statement of goals for the scheduled activities. CELTIC shall provide an agenda
and minutes of each meeting of the Steering Committee. Minutes shall be deemed approved unless NTI objects to the accuracy of such minutes within ten (10) days of its receipt thereof. The parties agree that the Steering Committee shall meet and
otherwise exercise its functions and duties only outside of the territories of the United States or the United Kingdom and their respective territories. 

 (c) Notwithstanding any of the foregoing, until the earlier of: (x) FDA approval of
the First Indication, (y) the third anniversary of the Effective Date or (z) the consummation of a Change of Control with respect to NTI, all decisions relating to clinical trial designs and regulatory affairs, including regulatory
submissions and communications with the FDA in respect of the First Indication in the U.S. shall be subject to the unanimous consent of the Steering Committee. 
  

2.3 Collaboration Work. The Steering Committee shall have sole authority and responsibility for the conduct and allocation of Collaboration
Work. Although it is the present intent of the Parties that a substantial amount of Collaboration Work will be performed by NTI or its Affiliates, the Steering Committee may allocate all or any portion of the Collaboration Work to Persons other than
NTI, including CELTIC, CELTIC’s Affiliates or third party contract research organizations and consultants. Plans for Collaboration Work shall be subject to periodic revision by the Steering Committee for any reason deemed appropriate by the
Steering Committee, including based upon timelines of Collaboration Work, results obtained or changes in competitive products or market forces. In the event that, after instructing NTI to perform any Collaboration Work, the Steering Committee
requests NTI to cease performing such Collaboration Work or reallocates such Collaboration Work from NTI to other Persons, the Steering Committee shall give NTI ninety (90) days prior written notice thereof and CELTIC’s sole obligation to
NTI with respect to such Collaboration Work shall be to pay NTI any fees for services rendered then due and owing to NTI because of such Collaboration Work hereunder as well as all actual costs, including committed costs, paid by NTI to complete
activities associated with the termination and orderly close out of such Collaboration Work, provided that CELTIC shall not pay any such costs incurred under any agreement entered into by NTI after the date NTI receives written notice of such
reallocation. Subject to Section 8.1, information generated by Collaboration Work will be freely shared between the Parties upon the reasonable request from one Party to the other. No allocation or reallocation of Collaboration Work
shall require NTI to spend money or devote human resources above those committed pursuant to Schedule A without NTI’s express written approval. 
  
 2.4 Drug Approval Applications. CELTIC shall have sole authority and responsibility for preparing and filing applications for Marketing Approval of
the Product in the Territory. Such applications shall be filed in CELTIC’S name, CELTIC shall be responsible for prosecuting them, and CELTIC shall be the owner of all ensuing Marketing Approvals. NTI shall provide reasonable cooperation and
assistance to CELTIC in the application for or other acquisition of any Marketing Approvals, including making available (i) such of NTI’s then-current employees, consultants and advisors (including, where applicable, any named inventors)
knowledgeable about the Product, and (ii) any information, data, reports, studies or results in NTI’s possession or under its control and related to the Product. CELTIC shall reimburse NTI for any reasonable and documented expenses
incurred by or on behalf of NTI’s employees, consultants and advisors, including consultants’ fees, in providing such cooperation and assistance. 
  
 2.5 Research and Development Efforts. NTI will use its Commercially Reasonable Efforts to perform and complete the Collaboration Work set forth
opposite its name on Schedule A. 

 2.6 Research Funding. During the Term and subject to the terms and conditions of this Agreement,
CELTIC shall bear the reasonable and documented costs and expenses of the Collaboration Work (the “Research Expenses”) as set forth in this Section 2.6. 
  
 (a) The Steering Committee shall, prior to commissioning any
Collaboration Work to a Party, solicit such Party’s good faith estimate as to (i) the actual dollar amount of Research Expenses that would be incurred by such Party in performing such Collaboration Work and (ii) how long it would take
such Party to perform such Collaboration Work. Such Party shall, promptly after the Steering Committee’s solicitation therefor, report such good faith estimate in writing to the Steering Committee, and, if such good faith estimate is accepted
by the Steering Committee in writing, then such Party shall perform such Collaboration Work for such amounts and during such time period. 
  
 (b) Upon reasonable written notice to NTI, CELTIC shall have the right, either itself or using CELTIC’s independent certified public
accountants, to audit those books and records as may be necessary to verify the accuracy of the reports furnished by NTI to CELTIC pursuant to Section 2.9. If an independent certified public accountant is used by CELTIC for the conduct
of such audits, the report prepared by such independent public accountant shall be provided to NTI at the same time it is sent or otherwise provided to CELTIC and shall contain the conclusions of the independent public accountant regarding the
audit. In the event an audit conducted by an independent public accountant concludes there has been any overpayment by CELTIC, NTI shall remit to CELTIC within thirty (30) days after NTI’s receipt of the auditor’s report, (i) the
amount of such overpayment and (ii) if such overpayment exceeds five percent (5%) of the total amount paid or payable for the calendar year then being audited, the reasonable fees and expenses of CELTIC in commissioning or performing such
audit, subject to reasonable substantiation. Any NTI information received or obtained by CELTIC in connection with an audit under this Section 2.6 is Confidential Information for purposes of Section 8.1. 
  
 2.7 Access to Personnel. NTI shall make available to CELTIC, upon
reasonable notice and during normal business hours, the reasonable assistance of all of NTI’s then-current employees, consultants, and advisors (including, where applicable, any named inventors) who are knowledgeable about Collaboration
Inventions and/or Acquired Intellectual Property in order to facilitate CELTIC’s efforts to develop and commercialize the Product. CELTIC shall reimburse NTI for any reasonable and documented expenses incurred by or on behalf of NTI’s
employees, pre-approved consultants and advisors, including the reasonable and documented fees of pre-approved consultants, in providing such cooperation and assistance. 
  
 2.8 Mutual Cooperation. The Parties shall cooperate with each other in connection with the performance of the
Collaboration Work, including, without limitation, by developing reasonable procedures with respect to information sharing, transfer of data and similar matters. Each Party shall make available on a timely basis to the other Party all information
and materials reasonably requested in respect of the Collaboration Work. CELTIC hereby grants NTI a non-exclusive, fully-paid, royalty-free license to use CELTIC’s documentation, data and other 

 
materials to the extent reasonably required to perform the Collaboration Work. This Section 2.8 does not transfer title or other rights to any
such materials or other assets of CELTIC. 
  
 2.9 Books and
Records. During the Term, NTI shall keep materially complete and accurate books and records of the Collaboration Work it performs and reasonable supporting documentation of all out-of-pocket costs incurred in connection with the Collaboration
Work, and shall make such books and records available to CELTIC upon reasonable notice and during normal business hours. 
  
 2.10 Manufacturing and Supply. NTI agrees that CELTIC may require NTI to supply, at the cost of CELTIC, clinical quantities of the Product in the
Territory. 
  
 2.11 Other Indications. Notwithstanding
anything herein, until the earlier of: (x) FDA approval of the First Indication, (y) the third anniversary of the Effective Date or (z) the consummation of a Change of Control with respect to NTI, the Steering Committee shall not
authorize, and CELTIC shall not engage in any tests or trials of the Product for any indications other than malignant brain tumors, nor make any regulatory submissions relating to the foregoing, that NTI reasonably believes may adversely affect in
any material respect the application for FDA approval of the First Indication. 
  
 ARTICLE 3 
 PRODUCT COMMERCIALIZATION 
  
 3.1 General. Subject to its obligations set forth in the Purchase Agreement, CELTIC shall have sole authority,
responsibility for and discretion over the manufacture, marketing, distribution and sale of Commercial Products in the Territory. CELTIC shall set prices for Commercial Products in the Territory and shall obtain all Marketing Approvals as may be
required in connection with such pricing. CELTIC will prepare or have prepared any and all advertising and education materials for the Commercial Products in the Territory. Decisions regarding matters such as advertising and promotion shall be made
in the sole discretion of CELTIC. CELTIC shall be responsible for developing and registering trademarks for the Commercial Products in the Territory and shall be the sole owner of all such trademarks. 
  
 ARTICLE 4 
 FEES; PAYMENTS 
  
 4.1 Fees and Expenses. CELTIC shall reimburse NTI for the reasonable and documented out-of-pocket expenses actually incurred by NTI in its performance under this Agreement, including reasonable and documented travel and lodging
expenses actually incurred in connection with the development of the Product. NTI shall invoice CELTIC for such fees and expenses monthly, based on the operating costs it allocates to the Product in its financial statements; provided, however, that
such allocation shall not include any amounts in respect of overhead or fixed costs (e.g., office, organization, management, lease, insurance or other overhead items.) All invoiced amounts shall be due and payable within forty-five (45) days
after the date of the invoice. If CELTIC fails to make any payment due under this Section 4.1 when it is due, then such late payment shall bear interest at a rate equal to four percent (4%) above the 

 
then-applicable prime commercial lending rate of Citibank, N.A. San Francisco, California (or the maximum amount permitted by law, if less) from the date
first due until the date paid, provided that, no such interest will accrue or be payable if any applicable non-payment or late payment is subject to a bona fide dispute between the Parties. 
  
 4.2 Taxes. In addition to the fees and other amounts payable by CELTIC
to NTI under this Agreement, CELTIC shall pay any applicable taxes or assessments, including any sales, use or excise taxes, that may be levied or assessed by any government or other taxing authority in connection with the performance by NTI of the
Collaboration Work, or any receipts therefor, other than federal, state or local income or withholding taxes (including both regular and alternative minimum taxes) or other federal, state or local taxes based upon NTI’s income (whether gross or
net), taxable income or alternative taxable income. Official receipts indicating proof of payment of any such taxes shall be secured and made available to the other Party upon request as evidence of payment. 
  
 ARTICLE 5 
 REPRESENTATIONS AND WARRANTIES 
  
 5.1 Representations and Warranties of CELTIC and NTI. CELTIC and NTI each hereby represent and warrant to the other that: 
  
 (a) This Agreement is a legal and valid obligation binding upon each Party and enforceable in accordance
with its terms. The execution, delivery, and performance of this Agreement by each Party does not conflict with any agreement, instrument, or understanding, oral or written, to which it is a party or by which it is bound, nor violate any law or
regulation of any court, governmental body, or administrative or other agency having jurisdiction over it. Each Party expressly represents and warrants that it has full power and authority to execute and deliver this Agreement and to perform the
obligations contemplated hereby. 
  
 (b) Each
Party will duly and punctually perform all duties, agreements, covenants, and undertakings on the part of the Party contained in this Agreement. 
  
 (c) All of its employees, officers, and consultants have executed written agreements requiring assignment to the Party of all inventions
made during the course of and as a result of their association with such Party and obliging the individual to maintain as confidential the Confidential Information of such Party. 
  
 (d) To its knowledge, no consent, approval, waiver, order or authorization of, or registration, declaration
or filing with, any Governmental Entity is required in connection with its execution, delivery and performance of this Agreement, or any agreement or instrument contemplated by this Agreement. 
  
 (e) It will not knowingly infringe any Third Party
Intellectual Property Rights in the course of performing any Collaboration Work or otherwise performing its obligations hereunder. 

  
 ARTICLE 6 
 INDEMNITY AND INSURANCE 
  
 6.1 Indemnification of NTI by CELTIC. CELTIC agrees to indemnify, hold harmless, and defend NTI and its shareholders, directors, officers,
employees, and agents from and against any and all costs, losses, liabilities, fines, penalties, demands, damages, expenses, court costs, costs of counsel, consultants, and experts (regardless of outcome) (“Damages”) arising
directly or indirectly out of any Third Party claim or action arising from: 
  
 (a) any breach of any representation or warranty made by CELTIC in this Agreement or any agreement, instrument, or document delivered by CELTIC pursuant to the terms of this Agreement; 
  
 (b) any violation of applicable law, or other act or
omission of CELTIC with respect to the operation of CELTIC’s business or any of CELTIC’s activities under this Agreement; 
  
 (c) the breach by CELTIC of any material term of this Agreement; or 
  
 (d) the negligence or intentional misconduct of CELTIC or any of its agents or employees, except to the
extent such claims result from conduct of NTI or its shareholders, directors, officers, employees, agents or sublicensees. 
  
 Nothing in the provisions of this Section 6.1 shall prevent NTI from instituting direct actions against CELTIC or from obtaining direct
damages in any such action. 
  
 6.2 Indemnification of CELTIC
by NTI. NTI agrees to indemnify, hold harmless, and defend CELTIC and its shareholders, directors, officers, employees, and agents against any and all Damages arising directly or indirectly out of any Third Party claim or action arising from:

  
 (a) any breach of any representation or
warranty made by NTI in this Agreement or any agreement, instrument, or document delivered by NTI pursuant to the terms of this Agreement; 
  
 (b) any violation of applicable law, or other any act or omission of NTI with respect to the operation of NTI’s business or any of
NTI’s activities under this Agreement; 
  
 (c) the breach by NTI of any material term of this Agreement; or 
  
 (d) the negligence or intentional misconduct of NTI or any of its agents or employees, except to the extent such claims result from conduct of CELTIC or its shareholders, directors, officers, employees, agents or
sublicensees. 
  
 Nothing in the provisions of this
Section 6.2 shall prevent CELTIC from instituting direct actions against NTI or from obtaining direct damages in any such action. 

 6.3 Conduct of Claims. If a Party or any of its shareholders, directors, officers, employees, and
agents has a right to be indemnified under Section 6.1 or 6.2 (each, an “Indemnified Party”), such Indemnified Party shall give prompt notice of such Third Party claim to the Party from whom indemnification is sought
hereunder (the “Indemnifying Party”) and shall cooperate with the Indemnifying Party. The Indemnifying Party will have the right to defend at its own expense and by counsel of its own choice any Third Party claims for which it is
obligated to provide indemnification to the Indemnified Party; provided, however, that it will not settle any such Third Party claim without the prior written consent of the Indemnified Party, which consent shall not be unreasonably
withheld. If the Indemnifying Party is defending a Third Party claim, the Indemnified Party shall have the right to be present in person or through counsel of its own choosing, at the expense of the Indemnifying Party. 
  
 6.4 Steering Committee Members. No member of the Steering Committee
shall be personally liable to any Party by reason of the actions of such person in the conduct of the business of the Steering Committee, except for actions involving fraud or willful misconduct. 
  
 6.5 Insurance. The Parties shall obtain and maintain at their own
expense appropriate insurance, in amounts customary in the pharmaceutical industry, but in no event less than $5 million general liability and $3 million covering human clinical trials, in accordance with standard commercial practices, and to cover
the indemnities granted in Sections 6.1 and 6.2, and such insurance policies shall name the other Party as an additional insured. Such insurance policies shall be written to cover claims incurred, discovered, manifested, or made in
connection with clinical development and sale of the Product in the Territory. Each Party shall provide evidence of such coverage to the other Party. Each Party shall provide at least thirty (30) days prior written notice to the other Party in
the event that such Party becomes aware that such coverage may not be renewed, is not renewed, or is canceled. 
  
 ARTICLE 7 
 INVENTIONS; INFRINGEMENT BY OTHERS; 
 PROTECTION OF PATENTS 
  
 7.1 Ownership of Collaborative Inventions. 
  
 (a) CELTIC shall solely own all right, title and interest in and to Collaboration Inventions, irrespective of the inventorship thereof.
NTI shall promptly notify CELTIC in writing of all Collaboration Inventions of which an employee, consultant or subcontractor of NTI is an inventor in sufficient detail to permit evaluation of same by CELTIC. NTI shall not disclose any
Collaboration Invention or any information related thereto to any Third Party without the prior written consent of CELTIC, and each Collaboration Invention shall be deemed CELTIC’s Confidential Information hereunder. 
  
 (b) NTI shall assign (or cause to be assigned) and hereby
does assign to CELTIC all of NTI’s right, title and interest in and to all Collaboration Inventions and any and all Intellectual Property Rights thereto, and shall execute all documents necessary to effectuate or record such transfer of title.
NTI further agrees to reasonably assist CELTIC, or its designee, upon CELTIC’s request and at CELTIC’s expense, to 

 
obtain, enforce, and defend CELTIC’s rights in Collaboration Inventions and any Intellectual Property Rights relating thereto in any and all countries,
and to execute all documents reasonably necessary for CELTIC to do so. In addition, to the extent allowed by law, any Collaboration Inventions which constitute copyrightable subject matter shall be considered “works made for hire” as that
term is defined in the United States Copyright Act. 
  
 (c) NTI agrees that if, in the course of performing any Collaboration Work, NTI incorporates into any Collaboration Invention(s) any NTI Technology, CELTIC is hereby granted and shall have a non-exclusive, fully-paid, royalty-free,
perpetual, irrevocable, worldwide license to make, have made, make derivative works of, reproduce, display, perform, use, offer for sale, sell, and import such NTI Technology in connection with the applicable Collaboration Invention(s) and/or the
Product. 
  
 (d) Upon the termination of this
Agreement, or upon CELTIC’s earlier request, NTI will deliver to CELTIC all documents and materials relating to, and all tangible embodiments of, Collaboration Inventions in NTI’s possession or control. 
  
 7.2 Infringement of Intellectual Property Rights. Each Party shall
promptly inform the other of any suspected infringement of any Acquired Intellectual Property or Collaboration Inventions by a Third Party. CELTIC shall have the right, at its sole discretion, on its own behalf and expense, to institute, prosecute
and control any action or proceeding relating to the enforcement of any Intellectual Property Rights in the Acquired Intellectual Property and the Collaboration Inventions. NTI agrees to be joined as a party if necessary to prosecute the action or
proceeding and shall provide, at CELTIC’s expense, all reasonable cooperation, including any necessary use of its name, required to prosecute such litigation. CELTIC shall have sole control of any such suit and all negotiations for its
settlement or compromise and shall bear all costs and expenses of the suit. Any amounts recovered as a result of such actions shall be dealt with as follows: (x) first, the cost of litigating such action shall be deducted and may be retained
from the amounts recovered by CELTIC; (y) second, the cost of any royalty or license payments to Third Parties shall be deducted and may be retained from the amounts recovered by CELTIC; and (z) as to any amounts remaining, CELTIC may
retain all such remainder, provided that such remainder shall be deemed to be Gross Margin or Net Sales, as applicable, occurring in the calendar quarter in which it is received and for which CELTIC shall pay NTI U.S. Profit Sharing Payments
or ROW Royalty Payments, as applicable, under Section 7.2 of the Purchase Agreement. 
  
 7.3 Declaratory Actions and Counterclaims. In the event that an action alleging invalidity or non-infringement of any of the Acquired Intellectual Property or Collaboration Inventions shall be brought against
CELTIC, CELTIC, at its sole discretion, shall have the right, to control the action at its own expense. NTI agrees to be joined as a party if necessary to prosecute the action and shall provide all reasonable cooperation, at CELTIC’s expense,
including any necessary use of its name, required to prosecute such litigation. CELTIC shall have sole control of any such suit and all negotiations for its settlement or compromise and shall bear all costs and expenses of the suit. Any recovery
obtained from such litigation, proceeding or settlement shall belong to CELTIC. 

 7.4 Infringement Charges Against a Party. If CELTIC, NTI or their respective Affiliates is
threatened with suit or sued by a third party for infringement of Intellectual Property Rights because of activities in connection with the Collaboration Work or the manufacture, offer for sale, sale, importation and/or distribution of the Product,
the Party which has been threatened with suit or sued shall promptly notify the other Party in writing of such event. CELTIC and NTI agree to take whatever reasonable action the Steering Committee deems appropriate in connection with such claim or
suit; provided, however, that (i) CELTIC shall be solely responsible for the costs (including attorneys’ fees) of defending and/or settling any such suit related solely to its performance of the Collaboration Work or the
manufacture, offer for sale, sale, importation and/or distribution of the Product, and (ii) NTI shall be solely responsible for the costs (including attorneys’ fees) of defending and/or settling any such suit related solely to its
performance of the Collaboration Work other than in strict accordance with any protocols or instructions provided by the Steering Committee. Each Party agrees that it shall cooperate with the other Party in defending the suit, even if not a party to
the suit, and shall join the suit if deemed a necessary party. Notwithstanding the foregoing, NTI shall bear all costs (including attorneys’ fees) of defending and/or settling any such suit which arises directly or indirectly out of a breach of
the representations and warranties made by NTI pursuant to Section 5.1(e) of this Agreement or Section 4.9 of the Purchase Agreement. 
  
 ARTICLE 8 
 CONFIDENTIALITY 
  
 8.1 Confidential Information. Section 6.4 of the Purchase
Agreement shall apply to all Confidential Information disclosed hereunder, and is hereby incorporated into this Agreement. 
  
 ARTICLE 9 
 TERM AND TERMINATION 
  
 9.1 Term. This Agreement shall commence on the Effective Date and,
unless terminated earlier pursuant to Sections 9.2, 9.3, 9.4 or 9.5, shall expire on the sixth (6th) anniversary of the date hereof (the “Term”). 
  
 9.2 Termination prior to Marketing Approval of First Indication. Until the earlier of: (x) FDA approval of the First Indication, or (y) the third anniversary of the Effective Date: 
  
 (a) this Agreement may only be terminated by CELTIC
(i) pursuant to Sections 9.4 or 9.5, (ii) with NTI’s prior written consent, (iii) immediately, upon the termination of the Purchase Agreement pursuant to Article 9 thereof, or (iv) immediately, upon a Change of
Control of NTI or a Sale Transaction. 
  
 (b)
this Agreement may only be terminated by NTI (i) pursuant to Sections 9.4 or 9.5, (ii) with CELTIC’s prior written consent, or (iii) immediately, upon the termination of the Purchase Agreement pursuant to Article 9
thereof. 

 9.3 Termination after Marketing Approval of First Indication. After: 
  
 (a) the earlier of (x) FDA approval of the First
Indication, or (y) three (3) years after the Effective Date, CELTIC shall have the right to terminate this Agreement (i) pursuant to Sections 9.4 or 9.5, (ii) in its sole discretion upon ninety (90) days prior written
notice to NTI, (iii) immediately, upon the termination of the Purchase Agreement pursuant to Article 9 thereof, or (iv) immediately, upon a Change of Control of NTI or a Sale Transaction. 
  
 (b) the earlier of (x) FDA approval of the First
Indication, or (y) three (3) years after the Effective Date, NTI shall have the right to terminate this Agreement (i) pursuant to Sections 9.4 or 9.5 or (ii) immediately, upon the termination of the Purchase
Agreement pursuant to Article 9 thereof. 
  
 (c)
FDA approval of the First Indication, NTI shall have the right to terminate the Agreement in its sole discretion upon ninety (90) days prior written notice to CELTIC. 
  
 9.4 Termination for Material Breach. If either Party commits a material breach of this Agreement and such breach is
not cured within sixty (60) days after written notice thereof by the non-breaching Party (the “Notice Period”), or if such breach is incapable of cure during the Notice Period, the breaching Party fails to make good faith
efforts to cure such breach during the Notice Period, then, in each such case the non-breaching Party may terminate this Agreement upon expiration of the Notice Period. 
  
 9.5 Termination for Insolvency. If either Party: 
  
 (a) makes a general assignment for the benefit of its creditors or becomes insolvent; 
  
 (b) files an insolvency petition in bankruptcy; 

 
 (c) petitions for or acquiesces in the appointment of any
receiver, trustee, or similar officer to liquidate or conserve its business or any substantial part of its assets; 
  
 (d) commences under the laws of any jurisdiction any proceeding involving its insolvency, bankruptcy, reorganization, adjustment of debt,
dissolution, liquidation, or any other similar proceeding for the release of financially distressed debtors; or 
  
 (e) becomes a party to any proceeding or action of the type described above in (c) or (d), and such proceeding or action remains
undismissed or unstayed for a period of more than sixty (60) days, then, in each case, the other Party may by written notice terminate this Agreement in its entirety with immediate effect. 
  
 9.6 Duties upon Termination; Accrued Obligations. In the event of
termination of this Agreement, all work under this Agreement shall cease to the extent practicable, and no additional work shall be undertaken or additional obligations incurred. Except where expressly provided for otherwise in this Agreement,
termination of this Agreement shall not relieve the Parties hereto of any liability which accrued hereunder prior to the effective date of such termination, nor preclude any Party from pursuing all rights and remedies it may have hereunder 

 
or at law or in equity with respect to any breach of this Agreement nor prejudice any Party’s right to obtain performance of any obligation. 

 
 9.7 Surviving Obligations. Upon the expiration or early termination
of this Agreement and except as expressly provided to the contrary herein, all rights and obligations of the Parties shall cease, except for the following obligations, which shall continue: 
  
 (a) CELTIC’S obligation to make payments pursuant to
Article 4 up to the effective date of termination and under Section 2.3 as set forth therein; 
  
 (b) any cause of action or claim of CELTIC or NTI, accrued or to accrue, because of any breach or default by the other Party prior to the
expiration or early termination of this Agreement; and 
  
 (c) the provisions of Articles and Sections 1, 6, 7, 8, 9.6, 9.7, 9.8, 10 and 11. 
  
 9.8 Bankruptcy. All rights and licenses granted under or pursuant to this Agreement or the Purchase Agreement by NTI to CELTIC are, and shall
otherwise be deemed to be, for purposes of Section 365(n) of the Bankruptcy Code, licenses of rights to “intellectual property” as defined under Section 101(52) of the Bankruptcy Code. The Parties agree that CELTIC, as a licensee
of such rights under this Agreement, shall retain and may fully exercise all of its rights and elections under the Bankruptcy Code. The Parties further agree that in the event of the commencement of a bankruptcy proceeding by or against NTI under
the Bankruptcy Code, CELTIC shall be entitled to a complete duplicate of, or complete access to, as appropriate, any such intellectual property and all embodiments of such intellectual property, and the same, if not already in its possession, shall
be promptly delivered to CELTIC (a) upon any such commencement of a bankruptcy proceeding upon written request therefor by CELTIC unless NTI elects to continue to perform all of its obligations under this Agreement, or (b) if not delivered
under (a) above, upon the rejection of this Agreement by or on behalf of NTI upon written request therefor by CELTIC. 
  
 ARTICLE 10 
 LIMITATIONS AND EXCLUSIONS OF
LIABILITY 
  
 10.1 Disclaimer of Warranties. EXCEPT AS
EXPRESSLY SET FORTH IN THIS AGREEMENT OR THE OTHER TRANSACTION DOCUMENTS, NEITHER PARTY MAKES ANY REPRESENTATION OR WARRANTY TO THE OTHER PARTY OF ANY KIND, EXPRESS OR IMPLIED, INCLUDING, WITHOUT LIMITATION, ANY WARRANTY OF TITLE, NON-INFRINGEMENT,
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. 
  
 10.2
Exclusion of Liability. IN NO EVENT SHALL EITHER PARTY, ITS DIRECTORS, OFFICERS, EMPLOYEES, AGENTS OR AFFILIATES BE LIABLE TO THE OTHER PARTY FOR ANY INDIRECT, PUNITIVE, EXEMPLARY OR CONSEQUENTIAL DAMAGES, INCLUDING BUT NOT LIMITED TO LOST
PROFITS ARISING FROM OR RELATING TO ANY BREACH OF THIS AGREEMENT, REGARDLESS OF ANY NOTICE OF THE POSSIBILITY OF SUCH DAMAGES. This Section 10.2 shall not be construed to 

 
limit either Party’s obligations under Sections 6.1 or 6.2. Notwithstanding the foregoing, the Parties have explicitly agreed that direct damages
shall not be subject to the foregoing limitation. 
  
 10.3
Limitation of Liability. EACH PARTY’S RESPECTIVE AGGREGATE LIABILITY ARISING FROM OR RELATING TO ANY BREACH OF THIS AGREEMENT SHALL BE LIMITED TO TWENTY MILLION ($20,000,000). This Section 10.3 shall not be construed to limit either
Party’s obligations under Section 6.1 or 6.2. 
  
 ARTICLE
11 
 MISCELLANEOUS 
  
 11.1 Subcontractors; Assignment. 
  
 (a) With the prior written consent of the Steering Committee, each Party shall have the right in its sole discretion to use
subcontractors, consultants or other Third Parties to perform its obligations hereunder, provided that such Party shall remain responsible for the performance of its subcontracted obligations. 
  
 (b) Except as provided in Section 11.1(a),
neither Party may assign or delegate this Agreement, nor any of its rights or obligations hereunder, without the other Party’s prior written consent; provided, however, that each Party may freely assign or delegate this Agreement:
(i) to any of its Affiliates, or (ii) in connection with the acquisition of all, or substantially all, of its assets, or any merger, acquisition or reorganization of or by the assigning Party. Any purported assignment or delegation of this
Agreement in violation of this Section 11 shall be null and void and of no effect. Subject to the foregoing provisions of this Section 11.1, this Agreement shall be binding upon and inure to the benefit of all successors and
permitted assigns of the Parties. 
  
 11.2 JURISDICTION OF
DISPUTES; WAIVER OF JURY TRIAL. IN THE EVENT ANY PARTY TO THIS AGREEMENT COMMENCES ANY LITIGATION, PROCEEDING OR OTHER LEGAL ACTION IN CONNECTION WITH OR RELATING TO THIS AGREEMENT, ANY RELATED AGREEMENT OR ANY MATTERS DESCRIBED OR CONTEMPLATED
HEREIN OR THEREIN, WITH RESPECT TO ANY OF THE MATTERS DESCRIBED OR CONTEMPLATED HEREIN OR THEREIN, THE PARTIES TO THIS AGREEMENT HEREBY (A) AGREE THAT ANY LITIGATION, PROCEEDING OR OTHER LEGAL ACTION SHALL BE INSTITUTED IN A COURT OF COMPETENT
JURISDICTION LOCATED WITHIN THE CITY OF NEW YORK, NEW YORK, WHETHER A STATE OR FEDERAL COURT; (B) AGREE THAT IN THE EVENT OF ANY SUCH LITIGATION, PROCEEDING OR ACTION, SUCH PARTIES WILL CONSENT AND SUBMIT TO PERSONAL JURISDICTION IN ANY SUCH
COURT DESCRIBED IN CLAUSE (A) OF THIS SECTION 11.2 AND TO SERVICE OF PROCESS UPON THEM IN ACCORDANCE WITH THE RULES AND STATUTES GOVERNING SERVICE OF PROCESS (IT BEING UNDERSTOOD THAT NOTHING IN THIS SECTION SHALL BE DEEMED TO PREVENT
ANY PARTY FROM SEEKING TO REMOVE ANY ACTION TO A FEDERAL COURT IN NEW YORK, NEW YORK; (C) AGREE TO WAIVE TO THE FULL EXTENT PERMITTED BY LAW ANY OBJECTION THAT THEY MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH LITIGATION, PROCEEDING OR

 
ACTION IN ANY SUCH COURT OR THAT ANY SUCH LITIGATION, PROCEEDING OR ACTION WAS BROUGHT IN AN INCONVENIENT FORUM; (D) DESIGNATE, APPOINT AND DIRECT CT
CORPORATION SYSTEM AS ITS AUTHORIZED AGENT TO RECEIVE ON ITS BEHALF SERVICE OF ANY AND ALL PROCESS AND DOCUMENTS IN ANY LEGAL PROCEEDING IN THE STATE OF NEW YORK; (E) AGREE TO NOTIFY THE OTHER PARTIES TO THIS AGREEMENT IMMEDIATELY IF SUCH AGENT
SHALL REFUSE TO ACT, OR BE PREVENTED FROM ACTING, AS AGENT AND, IN SUCH EVENT, PROMPTLY TO DESIGNATE ANOTHER AGENT IN THE CITY OF NEW YORK, SATISFACTORY TO NTI AND CELTIC, TO SERVE IN PLACE OF SUCH AGENT AND DELIVER TO THE OTHER PARTY WRITTEN
EVIDENCE OF SUCH SUBSTITUTE AGENT’S ACCEPTANCE OF SUCH DESIGNATION; (F) AGREE AS AN ALTERNATIVE METHOD OF SERVICE TO SERVICE OF PROCESS IN ANY LEGAL PROCEEDING BY MAILING OF COPIES THEREOF TO SUCH PARTY AT ITS ADDRESS SET FORTH IN
SECTION 11.4 FOR COMMUNICATIONS TO SUCH PARTY; (G) AGREE THAT ANY SERVICE MADE AS PROVIDED HEREIN SHALL BE EFFECTIVE AND BINDING SERVICE IN EVERY RESPECT; AND (H) AGREE THAT NOTHING HEREIN SHALL AFFECT THE RIGHTS OF ANY PARTY TO
EFFECT SERVICE OF PROCESS IN ANY OTHER MANNER PERMITTED BY LAW. EACH PARTY HERETO WAIVES THE RIGHT TO A TRIAL BY JURY IN ANY DISPUTE IN CONNECTION WITH OR RELATING TO THIS AGREEMENT, ANY RELATED AGREEMENT OR ANY MATTERS DESCRIBED OR CONTEMPLATED
HEREIN OR THEREIN, AND AGREE TO TAKE ANY AND ALL ACTION NECESSARY OR APPROPRIATE TO EFFECT SUCH WAIVER. 
  
 11.3 Injunctive Relief. Notwithstanding anything herein, either Party may seek (i) injunctive relief for the protection of such Party’s
Intellectual Property Rights or Confidential Information, and (ii) to enforce judgments, in any court of competent jurisdiction. 
  
 11.4 Notices. Any notice required or provided for by the terms of this Agreement shall be in writing and shall be (a) sent by registered or
certified mail, return receipt requested, postage prepaid, (b) sent via overnight courier service, or (c) sent by facsimile transmission, in each case properly addressed as follows: 
  
 If to CELTIC: 
  
 c/o Celtic Pharma Management L.P. 
 Wessex House 
 45 Reid Street, 4th Floor 
 Hamilton HM 12 
 Bermuda 
 Attention: General Counsel 
 Facsimile No.:
+441-299-7441 
  
 with copies to: 
  
 Celtic Pharma 
 110 East 59th Street 
 Suite 3303 

 New York, NY 10022 
 Attention: General Counsel 
 Facsimile No.: 212-668-3370 
  
 and 
  
 Mayer, Brown, Rowe & Maw LLP 
 1675 Broadway 
 New York, NY 10019 
 Attention: Philip O. Brandes 
 Facsimile No.:
212-262-1910 
  
 If to NTI: 
  
 Neurobiological Technologies, Inc. 
 3260 Blume Drive 
 Suite 500 
 Richmond, California 94806 
 U.S.A.

 Attention: President and CEO 
 Facsimile No.: 510-595-6006 
  
 with a copy to:

  
 Heller Ehrman LLP 
 4350 La Jolla Village Drive, 7th Floor 
 San
Diego, CA 92122 
 Attention: Stephen C. Ferruolo 
 Facsimile No.: 858-587-5930 
  
 Either Party may
change its address upon written notice to the other Party. 
  
 11.5 Entire Agreement. This Agreement embodies the entire understanding between the Parties relating to the subject matter hereof and supersedes all prior understandings and agreements, whether written or oral. None of the terms of
this Agreement can be amended or waived except by an instrument in writing executed by authorized representatives of each Party. 
  
 11.6 Governing Law. This Agreement shall be construed and the respective rights and obligations of the Parties determined according to the
substantive laws of the State of New York, notwithstanding any contrary conflict of laws provisions thereof; provided that matters of intellectual property law which matters shall be determined in accordance with the national intellectual property
laws relevant to the intellectual property in question. 
  
 11.7
Severability. Any term or provision of this Agreement that is invalid or unenforceable in any situation in any jurisdiction shall not affect the validity of enforceability of the remaining terms and provisions hereof or the validity or
enforceability of the offending term or provision in any other situation or in any other jurisdiction. If the final judgment of a court of competent jurisdiction declares that any term or provision hereof is invalid or unenforceable, the 

 
parties agree that the court making the determination of invalidity or unenforceability shall have the power to reduce the scope, duration, or area of the
term or provision, to delete specific words or phrases, or to replace any invalid or unenforceable term or provision with a term or provision that is valid and enforceable, and this Agreement shall be enforceable as so modified after the expiration
of the time within which the judgment may be appealed. 
  
 11.8
Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original, but all of which taken together shall constitute one and the same instrument. Facsimile signatures shall be deemed to have
the same effect as their originals. 
  
 11.9 Independent
Contractors. It is understood and agreed that the Parties are independent contractors and nothing contained in this Agreement is intended to make either Party a general or special agent, legal representative, joint venturer, partner or employee
of the other or otherwise as participants in a joint or common undertaking for any purpose. Personnel supplied by a Party shall work for that Party and shall not, for any purpose, be considered as partners, joint venturers, employees or agents of
the other Party. Each Party assumes full responsibility for the acts of its personnel while performing services hereunder and shall be responsible solely for their supervision, direction and control, compensation, benefits and taxes. Neither Party
has, expressly or by implication, or may represent itself as having, directly or indirectly, any authority to act for or on behalf of the other Party or to make contracts or enter into any agreements in the name of the other Party, or to obligate or
bind the other Party in any manner whatsoever. 
  
 11.10 Force
Majeure. Neither Party shall be held liable or responsible to the other Party nor be deemed to have defaulted under or breached this Agreement for failure or delay in fulfilling or performing any term of the Agreement when such failure or delay
is caused by or results from causes beyond the reasonable control of the affected Party, including, fire, floods, earthquakes, natural disasters, embargoes, war, acts of war (whether war be declared or not), insurrections, riots, terrorism, civil
commotions, strikes, lockouts or other labor disturbances, acts of God or acts, omissions or delays in acting by any governmental authority or the other Party to the extent beyond the reasonable control of the affected Party. 
  
 11.11 Amendment. This Agreement may be modified or amended only by
written agreement of the Parties hereto. 
  
 11.12 Delays or
Omissions. It is agreed that no delay or omission to exercise any right, power, or remedy accruing to any Party, upon any breach, default or noncompliance under this Agreement shall impair any such right, power, or remedy, nor shall it be
construed to be a waiver of any such breach, default or noncompliance, or any acquiescence therein, or of any similar breach, default or noncompliance thereafter occurring. It is further agreed that any waiver, permit, consent, or approval of any
kind or character on any part of any breach, default or noncompliance under the Agreement or any waiver by a Party of any provisions or conditions of this Agreement must be in writing and shall be effective only to the extent specifically set forth
in such writing. All remedies, either under this Agreement, by law, or otherwise afforded to the Parties, shall be cumulative and not alternative. 

 IN WITNESS WHEREOF, the Parties hereto have executed this Collaboration and Services Agreement in
duplicate originals by their duly authorized officers or representatives. 
  

					
	 NEUROBIOLOGICAL TECHNOLOGIES, INC.

		
	 By:
	 	 /s/ Paul E. Freiman

	 	 	 Name:
	 	 
	 	 	 Title:
	 	 
	
	 NEUTRON LTD.

		
	 By:
	 	 /s/ Stephen Evans-Freke

	 	 	 Name:
	 	 
	 	 	 Title:EXHIBIT 10.1

November 29, 2005

Stephen Morrison
 156 Por La Mar Circle
 Santa Barbara, CA 93103

Dear Stephen:

This letter agreement (the “Agreement”) amends and restates the employment agreement (the “Original Agreement”) dated February 19, 2001 between you, Stephen Morrison, and 724 Solutions Inc. (the “Company”), as amended on February 18, 2004.

The Company agrees to employ you and you accept such employment on a full time basis in the position of Chief Financial Officer and Senior Vice-President Corporate Services, upon the terms and conditions set forth in this Agreement. You will report directly to the Chief Executive Officer of the Company and indirectly to the Board of Directors of the Company (the “Board of Directors”).

Your duties and responsibilities shall consist of those necessary to perform the functions of the office of Chief Financial Officer and Senior Vice-President Corporate Services of the Company, including, without limitation, those duties set out in the document entitled “Board Mandate & Division of Responsibilities Between the Board of Directors & Management”.  You shall perform such duties and exercise such power as may from to time be determined by the Board of Directors of the Company.

You will devote to the business and affairs of the Company, all of the time and attention reasonably necessary to carry out the duties of your position, and will ensure that you are not at any time engaged in conduct which would constitute a conflict with the interests of the Company.  You will also comply with all Company policies as adopted by the Company from time to time.

Certain additional terms of your employment are set out on Schedule “A”, which forms an integral part of the Agreement. This Agreement together with the Confidentiality and Non-Competition Agreement attached as Schedule “B” constitute the entire agreement between the parties with respect to all of the subject matter hereof and the parties acknowledge and agree that its execution has not been induced by, nor do either of the parties rely upon or regard as material, any representations or writings whatsoever not incorporated and made a part of this Agreement.  This Agreement supersedes and replaces any prior agreements understandings, negotiations and discussions, whether oral or written, between the parties. 

If you are in agreement with the terms of this Agreement, please so indicate by signing in the space provided below. 

Yours truly,

John J Sims
 Chief Executive Officer

I agree to the terms of employment as described in this Agreement.

	
  
 
  	
  
 
  	
  
 
  	
  
 
  
	
  

  	
  
 
  	
  

  	
  
 
  
	
  Stephen   Morrison
  	
  
 
  	
  
Date
  	
  
 
  

Schedule “A”

ADDITIONAL TERMS

	
  
1.
  	
  
Salary.  Your salary will be USD 180,000 per annum.   You shall be eligible to participate in an annual incentive bonus program,   with a target equal to 45% of  your   base salary. The actual bonus payout shall be determined based upon the   Company’s achievement level against financial and performance objectives   determined by the Company’s Board of Directors in its discretion from time to   time.
  
	
  
 
  	
  
 
  	
  
 
  
	
  
2.
  	
  
Vacation.    You will be entitled to a vacation of 4 weeks in   each full calendar year.  Your   vacations shall be taken at such time as the Chief Executive Officer of the   Company may from time to time approve, having regard to the operations of the   Company.  A maximum of 5 unused   vacation days may be carried forward into the next calendar year.
  
	
   
  	
  
 
  	
  
 
  
	
  
3.
  	
  
Benefits.    You   will be eligible to participate in any plans generally maintained from time   to time by the Company for the benefit of the Company’ officers, including,   but not limited to, those pertaining to group life, accident, dental,   prescription, sickness and medical, and long term disability insurance on the   same terms and conditions as other similarly situated officers of the   Company.  Your share of premiums under   these plans, if any, can be deducted automatically from your paycheck on a   pre-tax basis.
  
	
  
 
  	
  
 
  	
  
 
  
	
  
4.
  	
  
Options to Purchase Shares.  Subject to approval of the Board of   Directors, and you and the Company entering into the Company’s standard   Option Agreement, the Company hereby grants to you:
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
(a)
  	
  
the option   to purchase 12,750 common shares of the Company (or the group of companies   that forms the Company), at their Fair Market Value (as defined in the 2005   Stock Incentive Plan) on the date of the grant, which option vests on and   continues from the first anniversary of the date of the grant; and
  
	
   
  	
  
 
  	
  
 
  
	
  
 
  	
  
(b)
  	
  
the option   to purchase 12,750 common shares of the Company (or the group of companies   that forms the Company), at their Fair Market Value (as defined in the 2005   Stock Incentive Plan) on the date of the grant, which option vests on and   continues from the second anniversary of the date of the grant; and
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
(c)
  	
  
the option   to purchase 12,750 common shares of the Company (or the group of companies   that forms the Company), at their Fair Market Value (as defined in the 2005   Stock Incentive Plan) on the date of the grant, which option vests on and   continues from the third anniversary of the date of the grant; and
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
(d)
  	
  
the option   to purchase 12,750 common shares of the Company (or the group of companies   that forms the Company), at their Fair Market Value (as defined in the 2005   Stock Incentive Plan) on the date of the grant, which option vests on and   continues from the fourth anniversary of the date of the grant.
  

	
  
5.
  	
  
Termination
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
(a)
  	
  
Termination of Employment.  Neither the   Company nor you makes any representation to the other that employment will   continue for a set period of time or that employment will be terminated only   under particular circumstances.  Both   the Company and you may terminate your employment at any time or for any   reason, subject to the provisions of this agreement.
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
(b)
  	
  
Termination Obligations.  You agree as follows:
  
	
   
  	
  
 
  	
  
 
  
	
  
 
  	
  
 
  	
  
(i)
  	
  
All   property, including, without limitation, all equipment, tangible proprietary   information (including confidential data), documents, books, records,   reports, notes, contracts, lists, computer disks (and other   computer-generated files and data), and copies thereof, created on any medium   and furnished to, obtained by, or prepared by you in the course of or   incident to your employment, belongs to the Company or its affiliates and   shall be returned promptly to the Company upon termination of your employment   by either the Company, for any reason (and whether for Cause or not), or you.
  
	
  
 
  	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
 
  	
  
(ii)
  	
  
All benefits   to which you are otherwise entitled shall cease upon your termination for any   reason (and whether for Cause or not), unless explicitly continued either   under this Agreement, under any specific written policy or benefit plan of   the Company or its affiliates, or as may be required by statute.
  
	
   
  	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
 
  	
  
(iii)
  	
  
Upon   termination of employment for any reason (and whether for Cause or not) under   this Agreement, you shall be deemed to have resigned from all offices and   directorships then held with the Company or any subsidiary.  You shall sign any document or do such   things that are reasonably required by the Company to give effect to any such   resignation.  Should you fail to do   so, any director of the Company is hereby irrevocably authorized in your name   and on his behalf to sign any document or do any thing that is required to   give effect thereto.
  
	
  
 
  	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
 
  	
  
(iv)
  	
  
Your   obligations under this section    “Termination” shall survive the termination of this Agreement and the   termination of employment for any reason (and whether for Cause or not).
  

	
  
 
  	
  
 
  	
  
(v)
  	
  
Following   any voluntary termination of employment or termination for Good Reason by   you, you shall, where reasonably requested by the Company, reasonably   cooperate with the Company for a reasonable period of time after such   termination of employment in the orderly transition of duties and work   assignments to other employees of the Company and its affiliates, provided   that the Company continues to pay you compensation on a per diem basis, at a   rate equal to your base salary in effect at your date of termination, during   any such reasonable period of time that your cooperation is requested.  You shall also reasonably cooperate, at   the Company’s expense, in the defense of any action brought by any third   party against the Company and its affiliates that relates in any way to your   acts or omissions while employed by the Company and its affiliates.
  
	
  
 
  	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
(c)
  	
  
Termination upon Death.  If you die during your employment, this   Agreement shall automatically terminate.
  
	
   
  	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
(d)
  	
  
Termination upon Disability.  If during your   employment, you shall become physically or mentally incapacitated and as a   result thereof you are unable to perform the essential functions of your   position with or without a reasonable accommodation, for a continuous period   of more than 120 days, then the Company and you specifically agree that this   Agreement has been frustrated, and therefore the Company is entitled to   terminate your employment on one month’s notice or grant you one month’s   salary in lieu of notice.
  
	
  
 
  	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
(e)
  	
  
Termination of Employment Term Without Cause.    Subject to Section (g), the Company reserves the right to terminate your   employment without Cause at any time upon paying to the you a lump sum amount   (the “Severance Amount”) equal to the sum of the following:
  
	
  
 
  	
  
 
  	
  
 
  	
  
 
  
	
   
  	
  
 
  	
  
(i)
  	
  
nine (9)   months of your then current base salary; and
  
	
  
 
  	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
 
  	
  
(ii)
  	
  
the product   nine (9) multiplied by your Average Monthly Bonus,
  
	
  
 
  	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
 
  	
  
in each   case, less statutory deductions and withholdings, which amount the parties   agree is pay-in-lieu of reasonable notice. You agree to release the Company   and its affiliates from any action, cause of action, claim or demand against   the Company or any other person, which may arise as a consequence of such   termination and to sign a waiver and release to this effect in a form   satisfactory to the Company as a condition to receiving payment under this   Section (e). For purposes of this Agreement, “Average Monthly Bonus” means an   amount equal to the quotient obtained by dividing the total amount of bonus   earned by you in the twelve (12) months immediately prior to the date of your   termination by twelve (12).
  

	
  
 
  	
  
(f)
  	
  
  Termination for Good Reason.  You may terminate your employment for Good   Reason at any time.  Upon such   termination for Good Reason, the Company shall pay you the Severance   Amount.  You agree to release the   Company and its affiliates from any action, cause of action, claim or demand   against the Company or any other person, which may arise as a consequence of   such termination and to sign a waiver and release to this effect in a form   satisfactory to the Company as a condition to receiving payment under this   Section (f).  For purposes of this   Agreement, “Good Reason” will exist at any time following the occurrence of   one or more of the following events without your written consent:

	
  
 
  	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
 
  	
  
(i)
  	
  
subject to   Section (g), the assignment to you of any duties materially inconsistent with   your position, authority, duties or responsibilities pursuant to this   Agreement or any other action by the Company that results in a material   diminution in such position, authority, duties or responsibilities;
  
	
   
  	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
 
  	
  
(ii)
  	
  
a reduction   in your compensation and benefits as set forth in Schedule “A”; or
  
	
  
 
  	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
 
  	
  
(iii)
  	
  
relocation,   without your consent of your place of employment by more than fifty (50)   miles;
  
	
  
 
  	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
 
  	
  
provided,   however, that you shall not terminate your employment hereunder unless you   first give notice of your intention to terminate and the grounds for such   termination, and the Company has not, within thirty (30) days following   receipt of such notice, cured such Good Reason.
  
	
   
  	
  
 
  	
  
 
  
	
  
 
  	
  
(g)
  	
  
Special Considerations on Change of Control.   Notwithstanding Section (e) and Section (f)(i), you acknowledge and agree   that if a Change of Control has occurred, and in connection with that Change   of Control, (i) the acquirer (or its affiliate) offers you employment or   continues your employment in a position that is, when taken as a whole,   comparable in all significant respects to your position, authority, duties   and responsibilities with the Company prior to such Change of Control (it   being understood that your title, reporting relationship, responsibilities or   authority may change as a result of the Change of Control), and (ii) your   employment is not terminated by the acquirer (or its affiliate) within twelve   (12) months of the Change of Control, then the Company shall not be obligated   to pay you the Severance Amount. For purposes of the foregoing, “Change of   Control” means any one person, corporation or other entity
acquires directly   or indirectly (i) 50% or more of the Company’s voting securities, or (ii) all   or substantially all of the Company’s assets.
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
(h)
  	
  
Termination of Employment Term for Cause.   the Company may at any time and without notice immediately terminate your   employment for Cause and you shall have no right to receive any compensation   or benefit hereunder (with the exception of compensation earned but unpaid as   of the termination date).  For   purposes of this Agreement, “Cause” will exist at any time following the   occurrence of one or more of the following events:
  

	
  
 
  	
  
 
  	
  
(i)
  	
  
any willful   act of personal dishonesty, fraud or misrepresentation taken by you in connection   with his responsibilities as an employee which was intended to result in your   substantial gain or personal enrichment at the expense of  the Company or its affiliates;
  
	
  
 
  	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
 
  	
  
(ii)
  	
  
your   conviction of a felony (other than driving-related offenses), or the   equivalent in a jurisdiction other than the United States, on account of any   act which was materially injurious to the Company or any of its affiliates,   or the reputation of the Company or any of its affiliates, as reasonably   determined by the Board of Directors of the Company;
  
	
   
  	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
 
  	
  
(iii)
  	
  
your willful   and continued failure to substantially perform your principal duties and   obligations of employment (other than any such failure resulting from   incapacity due to physical or mental illness;
  
	
  
 
  	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
 
  	
  
provided,   that for purposes of this Section (h), no act or failure to act shall be   considered “willful” unless done or omitted to be done by you in bad faith   and without reasonable belief that the act or omission was in or not opposed   to the best interests of  the Company;   provided, further, that the Company shall not terminate your employment under   clause (iii) of this Section (h) unless the Company first gives notice of its   intention to terminate and the grounds for such termination, and you have   not, within thirty (30) days following receipt of such notice, cured such   failure.
  
	
  
 
  	
  
 
  	
  
 
  
	
   
  	
  
(i)
  	
  
Voluntary Termination Period.  You may terminate this Agreement upon   giving of 12 weeks’ prior notice to the Company (or such lesser period of   time as the parties may agree upon), in which case this Agreement shall   terminate at the expiration of such 12 week period without any other notice   or any payment of salary or benefit plan contributions subsequent to the   termination of this Agreement.
  
	
  
 
  	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
(j)
  	
  
Repayment of Bonuses and Other Advances.  You agree to permit the Company or its   affiliates to deduct the amount of any advanced bonuses or other monies   advanced to you during your employment and so designated as advanced amounts,   from any compensation due you under this Section “Termination”.
  
	
  
 
  	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
(k)
  	
  
Treatment of Stock Options, Restricted Stock and Other Securities.  Notwithstanding any other provisions of   this Agreement, upon any termination of you for any reason and whether for   Cause or not, any options, restricted stock or other securities held by you   but subject to vesting which is contingent upon continued employment with the   Company or its affiliates shall be governed by the provisions of the   applicable stock plans and repurchase and award agreements.
  

Schedule “B”

724 Solutions Inc.

Confidentiality and Non-Competition Agreement

                    In consideration of my employment by 724 Solutions Inc. (the “Company”), the Company’s promise to disclose to me confidential and proprietary information and trade secrets of the Company, and the compensation now and hereafter paid to me, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the undersigned hereby agrees with the Company as follows:

          1.       Recognition of Company’s Rights; Nondisclosure.   At all times during the term of my employment and thereafter, I will hold in strictest confidence and will not disclose, use, lecture upon, or publish any of the Company’s Proprietary Information (defined below), except as such disclosure, use, or publication may be required in connection with my work for the Company, or unless the President or the Board of Directors of the Company expressly authorizes such in writing.  The term “Proprietary Information” shall mean trade secrets, confidential knowledge, data, or any other proprietary information of the Company and each of its subsidiaries or affiliated companies.  By way of illustration but not limitation, “Proprietary Information” includes (a) inventions, foreign and domestic patent rights, copyrights, sui
generis rights, trade secrets, mask work rights, ideas, processes, formulas, data, programs, other works of authorship, know-how, improvements, discoveries, developments, designs, and techniques (hereinafter, such included Proprietary Information is collectively referred to as “Works”); (b) information regarding plans for research, development, new products and services, marketing and selling, business plans, budgets and unpublished financial statements, licenses, prices and costs, suppliers, and customers; and (c) information regarding the skills and compensation of other employees of the Company.  However, I shall not be obligated under this paragraph with respect to information I can document is or becomes readily publicly available without restriction through no fault of mine.

          2.       Third Party Information.  I understand, in addition, that the Company may from time to time receive from third parties confidential or proprietary information (“Third Party Information”) subject to a duty on the Company’s part to maintain the confidentiality of such information and to use it only for certain limited purposes.  During the term of my employment and thereafter, I will hold Third Party Information in the strictest confidence and will not disclose (to anyone other than Company personnel who need to know such information in connection with their work for the Company) or use, except in connection with my work for the Company, Third Party Information unless expressly authorized by an executive officer of the Company in writing.

          3.       Assignment of Works.  

                              (a)  Company shall own and I hereby assign to the Company all my right, title, and interest in and to any and all Works (and all Proprietary Rights with respect thereto), whether or not patentable or registrable under copyright or similar statutes, that were made or conceived or reduced to practice or learned by me, either alone or jointly with others, during the period of my employment with the Company to the fullest extent allowable by law, and I will promptly disclose such Works to Company.  If I use or disclose my own or any third party’s confidential information or intellectual property when acting within the scope of my employment or otherwise on behalf of Company, Company will have and I hereby grant Company a perpetual, irrevocable, worldwide royalty-free, non-exclusive, sublicensable right and license to exploit and
exercise all such confidential information and intellectual property rights.

                              (b)  I acknowledge that all original works of authorship that are made by me (solely or jointly with others) during the term of my employment with the Company and that are within the scope of my employment and protectable by copyright are “works made for hire,” as that term is defined in the United States Copyright Act (17 U.S.C. § 101).  Works assigned to the Company by this paragraph 3 are hereinafter referred to as “Company Works.”

                              (c)  To the extent allowable by law, Company Works includes all rights of paternity, integrity, disclosure and withdrawal and any other rights that may be known as or referred to as “moral rights,” “artist’s rights,” droit moral rights,” or the like (collectively “Moral Rights”).  To the extent I retain any such Moral Rights under applicable law, I hereby waive such Moral Rights and consent to any action with respect to such Moral Rights by or authorized by Company and specifically grant Company the right to alter such Company Works.  I will confirm any such waivers and consents from time to time as requested by Company.

          4.       Enforcement of Proprietary Rights.  I will assist the Company in every proper way to obtain and from time to time enforce United States and foreign Proprietary Rights relating to Company Works in any and all countries.  To that end I will execute, verify, and deliver such documents and perform such other acts (including appearances as a witness) as the Company may reasonably request for use in applying for, obtaining, perfecting, evidencing, sustaining, and enforcing such Proprietary Rights and the assignment thereof.  In addition, I will execute, verify, and deliver assignments of such Proprietary rights to the Company or its designee.  My obligation to assist the Company with respect to Proprietary Rights relating to such Company Works in any and all countries shall continue beyond the termination of my employment, but the Company shall
compensate me at a reasonable rate after my termination for the time actually spent by me at the Company’s request on such assistance.

                    In the event the Company is unable for any reason, after reasonable effort, to secure my signature on any document needed in connection with the actions specified in the preceding paragraph, I hereby irrevocably designate and appoint the Company and its duly authorized officers and agents as my agent and attorney in fact, to act for and in my behalf to execute, verify, and file any such documents and to do all other lawfully permitted acts to further the purposes of the preceding paragraph thereon with the same legal force and effect as if executed by me.  I hereby waive and quitclaim to the Company any and all claims, of any nature whatsoever, that I now or may hereafter have for infringement of any Proprietary Rights assigned hereunder to the Company.

          5.       Obligation to Keep Company Informed.  During the period of my employment, I will promptly disclose to the Company fully and in writing and will hold in trust for the sole right and benefit of the Company any and all Works.  In addition, I will disclose all patent applications filed by me during the three (3) years after termination of my employment with the Company.

          6.       Prior Inventions.  Inventions, if any, patented or unpatented, that I made prior to the commencement of my employment with the Company are excluded from the scope of this Agreement.  To preclude any possible uncertainty, I have set forth on Exhibit A attached hereto a complete list of all inventions that I have, alone or jointly with others, conceived, developed, or reduced to practice or caused to be conceived, developed, or reduced to practice prior to commencement of my employment with the Company, that I consider to be my property or the property of third parties and that I wish to have excluded from the scope of this Agreement.  If disclosure of any such invention on Exhibit A would cause me to violate any prior confidentiality agreement, I understand that I am not to list such inventions in Exhibit A but am to inform the Company that all
inventions have not been listed for that reason.

          7.       Other Activities; Non-Competition; Non-Solicitation.

	
  
 
  	
  
          (a)          During   the term of my employment with the Company, I will not, directly or   indirectly, participate in the ownership, management, operation, financing or   control of, or be employed by or consult for or otherwise render services to,   any person, corporation, firm, or other entity that competes in the State of   California, or in any other state in the United States, or in any country in   the world with the Company in the conduct of the business of the Company as   conducted or as proposed to be conducted, nor shall I engage in any other   activities that conflict with my obligations to the Company.
  
	
   
  	
  
 
  
	
  
 
  	
  
          (b)          In   consideration of the premises hereof and in further consideration of the   Company’s promise to disclose to me confidential and proprietary information   and trade secrets of the Company and the Company’s promise to provide me with   immediate specialized training, and the experience I will gain throughout my   employment with the Company, and for other good and valuable consideration,   the receipt and sufficiency of which is hereby acknowledged, I hereby agree   that for a period of one (1) year after the date that my employment with the   Company is terminated, for any reason, I will not, directly or indirectly,   (i) compete in the state of California, or in any other State of the   United States, or in any country in the world where the Company engages in   business, or proposes to engage in business, on the date of
the termination   of my employment with the Company, or (ii) participate in the ownership,   management, operation, financing, or control of, or be employed by or consult   for or otherwise render services to, any person, corporation, firm, or other   entity that competes in the state of California, or in any other State of the   United States, or in any country in the world with the Company in the conduct   of the business of the Company as conducted and as proposed to be conducted   on the date of termination of my employment.    Notwithstanding the foregoing, I am permitted to own up to 5% of any   class of securities of any corporation that is traded on a national   securities exchange or through Nasdaq.
  
	
  
 
  	
  
 
  
	
  
 
  	
  
          (c)             During the term   of my employment and for a period of one (1) year after my employment with   the Company is terminated for any reason, I will not, directly or indirectly,   individually or on behalf of any other person, firm, partnership,   corporation, or business entity of any type, hire, solicit, assist or in any   way encourage any current employee or consultant of the Company or any   subsidiary of the Company to terminate his or her employment relationship or   consulting relationship with the Company or subsidiary nor will I hire or   solicit the employment services of any former employee of the Company or any   subsidiary of the Company whose employment has been terminated for less than   six (6) months.
  
	
   
  	
  
 
  
	
  
 
  	
  
          (d)          For   a period of one (1) year after my employment with the Company is terminated   for any reason, I will not, directly or indirectly, individually or on behalf   of any other person, firm, partnership, corporation, or business entity of   any type, solicit, contact, call upon, communicate with, or attempt to   communicate with, any Customer of the Company.
  

          8.       No Improper Use of Materials.  I understand that I shall not use the proprietary or confidential information or trade secrets of any former employer or any other person or entity in connection with my employment with the Company.  During my employment by the Company I will not improperly use or disclose any proprietary or confidential information or trade secrets, if any, of any former employer or any other person or entity to whom I have an obligation of confidentiality, and I will not bring onto the premises of the Company any unpublished documents or any property belonging to any former employer or any other person or entity to whom I have an obligation of confidentiality unless consented to in writing by that former employer, person, or entity.

          9.       No Conflicting Obligation.  I represent that my performance of all the terms of this Agreement and as an employee of the Company does not and will not breach any agreement between me and any other employer, person or entity.  I have not entered into, and I agree I will not enter into, any agreement either written or oral in conflict herewith.

          10.     Return of Company Documents.  When I leave the employ of the Company, I will deliver to the Company all drawings, notes, memoranda, specifications, devices, formulas, and documents, together with all copies thereof, and any other material containing or disclosing any Company Works, Third Party Information, or Proprietary Information of the Company.  I further agree that any property situated on the Company’s premises and owned by the Company, including disks and other storage media, filing cabinets or other work areas, is subject to inspection by Company personnel at any time with or without notice.

          11.     Legal and Equitable Remedies.  Because my services are personal and unique and because I will have access to and become acquainted with the Proprietary Information of the Company, the Company shall have the right to enforce this Agreement and any of its provisions by injunction, specific performance, or other equitable relief, without bond and without prejudice to any other rights and remedies that the Company may have for a breach of this Agreement.

          12.     Authorization to Notify New Employer.  I hereby authorize the Company to notify my new employer about my rights and obligations under this Agreement following the termination of my employment with the Company.

          13.     Notices.  Any notices required or permitted hereunder shall be given to the appropriate party at the address specified in the Employment Agreement between me and the Company.  Such notice shall be deemed given upon personal delivery to the appropriate address or if sent by certified or registered mail, three days after the date of mailing.

          14.     General Provisions.

                              14.1     Governing Law.  This Agreement will be governed by and construed according to the laws of the State of California without regard to conflicts of law principles.

                              14.2     Exclusive Forum.  I hereby irrevocably agree that the exclusive forum for any suit, action, or other proceeding arising out of or in any way related to this Agreement shall be in the state or federal courts in California, and I agree to the exclusive personal jurisdiction and venue of any court in California.

                              14.3     Entire Agreement.  This Agreement sets forth the entire agreement and understanding between the Company and myself relating to the subject matter hereof and supercedes and merges all prior discussions between us.  No modification of or amendment to this Agreement, nor any waiver of any rights under this Agreement, will be effective unless in writing signed by the party to be charged.  Any subsequent change or changes in my duties, salary, or compensation will not affect the validity or scope of this Agreement.  As used in this Agreement, the period of my employment includes any time during which I may be retained by the Company as a consultant.

                              14.4     Assignment. You acknowledge that the Company may assign this agreement and the benefits of your covenants and obligations under this agreement to any person who purchases all or substantially all the assets of the Company.  In addition, this agreement and the rights and obligations of the Company may be assigned at any time by the Company to an affiliate of the Company.  Subject to the forgoing, neither this agreement nor any rights or obligations hereunder shall be assignable by any party without the prior written consent of the other party.  Subject thereto, this agreement shall enure to the benefit of and be binding upon the parties and their respective heirs, executors, administrators, legal personal representatives, successors
(including any successor by reason of amalgamation or statutory arrangement of any party) and permitted assigns.

                              14.5     Severability.

                              (a)     I acknowledge and agree that each agreement and covenant set forth herein constitutes a separate agreement independently supported by good and adequate consideration and that each such agreement shall be severable from the other provisions of this Agreement and shall survive this Agreement.

                              (b)     I understand and agree that Section 7 of this Agreement is to be enforced to the fullest extent permitted by law.  Accordingly, if a court of competent jurisdiction determines that the scope and/or operation of Section 7 is too broad to be enforced as written, the Company and I intend that the court should reform such provision to such narrower scope and/or operation as it determines to be enforceable, provided, however, that such reformation applies only with respect to the operation of such provision in the particular jurisdiction with respect to which such determination was made.  If, however, Section 7 is held to be illegal, invalid, or unenforceable under present or future law, and not subject to reformation, then (i) such provision
shall be fully severable, (ii) this Agreement shall be construed and enforced as if such provision was never a part of this Agreement, and (iii) the remaining provisions of this Agreement shall remain in full force and effect and shall not be affected by the illegal, invalid, or unenforceable provision or by its severance.

                              14.6     Successors and Assigns.

                    This Agreement will be binding upon my heirs, executors, administrators, and other legal representatives and will be for the benefit of the Company, its successors and assigns.

                              14.7     Survival.  The provisions of this Agreement shall survive the termination of my employment for any reason and the assignment of this Agreement by the Company to any successor in interest or other assignee.  I further understand and agree that the phrase “term of employment” contained herein shall include any period of time during which I am retained by the Company as a consultant and/or independent contractor.

                              14.8     Waiver.  No waiver by the Company of any breach of this Agreement shall be a waiver of any preceding or succeeding breach.  No waiver by the Company of any right under this Agreement shall be construed as a waiver of any other right.  The Company shall not be required to give notice to enforce strict adherence to all terms of this Agreement.

                              14.9     Headings.  The headings to each section or paragraph of this Agreement are provided for convenience of reference only and shall have no legal effect in the interpretation of the terms hereof.  

                    This Agreement shall be effective as of November 29, 2005.

                    I UNDERSTAND THAT THIS AGREEMENT AFFECTS MY RIGHTS TO INVENTIONS I MAKE DURING MY EMPLOYMENT, RESTRICTS MY RIGHT TO DISCLOSE OR USE THE COMPANY’S PROPRIETARY INFORMATION DURING OR SUBSEQUENT TO MY EMPLOYMENT, AND PROHIBITS ME FROM COMPETING WITH THE COMPANY AND/OR FROM SOLICITING EMPLOYEES AND CUSTOMERS OF THE COMPANY FOR ONE (1) YEAR AFTER MY EMPLOYMENT WITH THE COMPANY IS TERMINATED FOR ANY REASON.

                    I HAVE READ THIS CONFIDENTIALITY AND NON-COMPETE AGREEMENT  CAREFULLY AND UNDERSTAND ITS TERMS.  I HAVE COMPLETELY FILLED OUT EXHIBIT A TO THIS AGREEMENT.

	
  Dated:   ___________________ 2005.
  	
  
 
  	
  

  
	
  
 
  	
  
 
  	
  
Stephen   Morrison
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
 
  	
  
156 Por La Mar Circle
  
	
  
 
  	
  
 
  	
  
Santa Barbara, California
  
	
  
 
  	
  
 
  	
  
93103
  
	
  
 
  	
  
 
  	
  
 
  
	
  
ACCEPTED AND   AGREED TO:
  	
  
 
  	
  
 
  
	 
	  
	  

	
   
  	
  
 
  	
  
 
  
	
  

  	
  
 
  	
  
 
  
	
  
John Sims
  	
  
 
  	
  
 
  
	
  
Chief   Executive Officer
  	
  
 
  	
  
 
  

EXHIBIT A

_________________________________

_________________________________

Ladies and/or Gentlemen:

          1.     The following is a complete list of all inventions or improvements relevant to the subject matter of my employment by 724 Solutions Inc. (the “Company”) that have been made or conceived or first reduced to practice by me alone or jointly with others prior to my employment by the Company that I desire to remove from the operation of the Company’s Confidentiality and Non-Compete Agreement.

	
  x
  	
  
No   inventions or improvements.
  

______See below:

______Additional sheets attached.

          2.     I propose to bring to my employment the following materials and documents of a former employer:

______No materials or documents.

______See below:

	
  
 
  	
  
 
  
	
   
 	
  

  
	
   
 	
  
Signature
  
	
   
 	
  
 
  
	
  
 
  	
  
 
  
	
  
 
  	
  

  
	
  
 
  	
  
Date

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