Audit Committee Charter

I. Purpose

The purpose of the Audit Committee (the "Committee") of the board of directors (the "Board") of Neurobiological Technologies, Inc. (the "Company") is to:

• oversee the accounting and financial reporting processes of the Company and audits of its financial statements and review the effectiveness of the Company's internal control over financial reporting;
  
  
• take, or recommend that the Board take, appropriate action to oversee the qualifications, independence and performance of the Company's independent auditors; and
  
  
• prepare the report required by the rules of the Securities and Exchange Commission (the "SEC") to be included in the Company's annual proxy statement.

II. Composition

The Committee shall be composed of three or more directors, as determined by the Board, each of whom shall (1) be "independent" as defined in Rule 4200(a)(15) under the Marketplace Rules of the National Association of Securities Dealers, Inc.; (2) meet the criteria for independence set forth in Rule 10A-3(b)(1) promulgated under Section 10A(m)(3) of the Securities Exchange Act of 1934, as amended (the "Exchange Act") and the applicable rules and regulations (the "Regulations") of the SEC, subject to the exemptions provided in Rule 10A-3(c) under the Exchange Act; and (3) not have participated in the preparation of the financial statements of the Company or a current subsidiary of the Company at any time during the past three years.

Each member of the Committee must be able to read and understand fundamental financial statements, including a company's balance sheet, income statement, and cash flow statement. At least one member of the Committee shall be an "audit committee financial expert," as that term is defined in the Regulations, and shall have past employment experience in finance or accounting, requisite professional certification in accounting, or any other comparable experience or background which results in the individual's financial sophistication, including being or having been a chief executive officer, chief financial officer or other senior officer with financial oversight responsibilities.

The members of the Committee shall be appointed by the Board and may be replaced or removed by the Board with or without cause. Resignation or removal of a director from the Board, for whatever reason, shall automatically and without any further action constitute resignation or removal, as applicable, from the Committee. Any vacancy on the Committee, occurring for whatever reason, may be filled only by the Board. The Board shall designate one member of the Committee to be Chairman of the committee.

III. Compensation

A member of the Committee may not, other than in his or her capacity as a member of the Committee, the Board or any other committee established by the Board, receive directly or indirectly from the Company any consulting, advisory or other compensatory fee from the Company.

IV. Meetings

The Committee shall meet as often as it determines is appropriate to carry out its responsibilities under this charter, but not less frequently than quarterly. A majority of the members of the Committee shall constitute a quorum for purposes of holding a meeting and the Committee may act by a vote of a majority of the members present at such meeting.

The Committee shall meet at least once each year in separate executive sessions with management and the independent auditor to discuss matters that any of them or the Committee believes could significantly affect the financial statements and should be discussed privately.

The Committee shall have such direct and independent interaction with members of management, including the Company's chief financial officer and chief accounting officer, as the Committee believes appropriate.

V. Responsibilities and Authority

1. Review of Charter
   
   
• The Committee shall review and reassess the adequacy of this Charter annually and recommend to the Board any amendments or modifications to the Charter that the Committee deems appropriate.
  
  
2. Matters Relating to Selection, Performance and Independence of Independent Auditor
   
   
• The Committee shall be directly responsible for: the appointment, retention and termination, and for determining the compensation, of a "registered public accounting firm" (as that term is defined in Section 2(a) of the Sarbanes-Oxley Act of 2002) to serve as the Company's independent auditor engaged for the purpose of preparing or issuing an audit report or performing other audit, review or attest services for the Company; overseeing the work of the independent auditor (including the resolution of any disagreements between management and the independent auditor regarding financial reporting); evaluating the performance of the independent auditor and, if so determined by the Committee, replacing the independent auditor; it being acknowledged that the independent auditor is ultimately accountable to the Board and Committee, as representatives of the stockholders.
  
  
• The Committee shall instruct the independent auditor that the independent auditor shall report directly to the Committee.
  
  
• The Committee shall pre-approve all auditing services and the terms thereof (which may include providing comfort letters in connection with securities underwritings) and non-audit services (other than non-audit services prohibited under Section 10A(g) of the Exchange Act or the applicable rules of the SEC or the Public Company Accounting Oversight Board) to be provided to the Company by the independent auditor; provided, however, the pre-approval requirement is waived with respect to the provision of non-audit services for the Company if the "de minimus" provisions of Section 10A(i)(1)(B) of the Exchange Act are satisfied. This authority to pre-approve non-audit services may be delegated to one or more members of the Committee, who shall present all decisions to pre-approve an activity to the full Committee at a subsequent Committee meeting.
  
  
• The Committee may review and approve the scope and staffing of the independent auditors' annual audit plan(s).
  
  
• The Committee shall ensure the receipt of, and evaluate the written disclosures and the letter that the independent auditor submits to the Committee regarding the auditor's independence in accordance with the applicable rules of the PCAOB, discuss such reports with the auditor, oversee the independence of the independent auditor and, if so determined by the Committee in response to such reports, take appropriate action to address issues raised by such evaluation.
  
  
• The Committee shall coordinate with the independent auditor to ensure the regular rotation of the audit partners (including, without limitation, the lead and concurring partners) as required under the Exchange Act and Regulation S-X.
  
  
3. Audited Financial Statements and Annual Audit
   
   
• The Committee shall meet with management and with the independent auditor, together and separately, to discuss the annual financial statements and the report of the independent auditor thereon, and to discuss significant issues encountered in the course of the audit work, including: restrictions on the scope of activities; access to required information; significant matters regarding internal controls over financial reporting, including any additional audit procedures performed in light of any significant deficiencies or material weaknesses in the design or operation of internal control over financial reporting identified during the course of the annual audit, and the adequacy of disclosures about changes in internal control over financial reporting; the adequacy of the disclosure of off-balance sheet transactions, arrangements, obligations and relationships in reports filed with the SEC; and the appropriateness of the presentation of any non-GAAP financial measures (as defined in the Regulations) included in any report filed with the SEC or in any public disclosure or release.
  
  
• The Committee shall instruct the independent auditor to report to the Committee on all critical accounting policies of the Company, all material alternative accounting treatments of financial information within generally accepted accounting principles that have been discussed with management, ramifications of the use of such alternative accounting treatments and disclosures and the accounting treatment preferred by the independent auditor, and other material written communication between the independent auditor and management, and discuss these matters with the independent auditor and management.
  
  
• The Committee shall discuss with the independent auditors those matters brought to the attention of the Committee by the independent auditors pursuant to Statement on Auditing Standards No. 114, as it may be modified or supplemented.
  
  
• The Committee shall review and discuss with management and the independent auditor management's report on internal control over financial reporting, and, if applicable, the independent auditor's review of the effectiveness of the Company's internal control over financial reporting and its attestation report, prior to the filing of the Form 10-K.
  
  
• If brought to the attention of the Committee, the Committee shall discuss with the CEO and CFO of the Company (1) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Company's ability to record, process, summarize and report financial information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act, within the time periods specified in the SEC's rules and forms, and (2) any fraud involving management or other employees who have a significant role in the Company's internal control over financial reporting.
  
  
• The Committee shall review the management letter delivered by the independent auditor in connection with the audit, if applicable.
  
  
• The Committee shall, following such review and discussions, if so determined by the Committee, recommend to the Board that the annual financial statements be included in the Company's annual report on Form 10-K.
  
  
• The Committee shall prepare the Committee report required by Item 407(d) of Regulation S-K of the Exchange Act (or any successor provision) to be included in the Company's annual proxy statement.
  
  
• The Committee shall review significant changes to the Company's accounting principles and practices proposed by the independent auditor or management.
  
  
• The Committee shall the review the scope and results of internal audits, if any.
  
  
4. Unaudited Quarterly Financial Statements
   
   
• The Committee shall discuss with management and the independent auditor, prior to the filing of the Company's Quarterly Reports on Form 10-Q, (1) the Company's quarterly financial statements (provided, however, that this responsibility may be delegated to a member of the Committee who is a financial expert), (2) such issues as may be brought to the Committee's attention by the independent auditor pursuant to Statement on Auditing Standards No. 100, and (3) any significant financial reporting or other issues that have been identified in connection with the interim review of such financial statements.
  
  
5. Procedures for Addressing Complaints and Concerns
   
   
• The Committee shall establish procedures for (1) the receipt, retention and treatment of complaints received by the Company regarding accounting, internal accounting controls, or auditing matters and (2) the confidential, anonymous submission by employees of the Company of concerns regarding questionable accounting or auditing matters.
  
  
6. Regular Reports to the Board
   
   
• The Committee shall regularly report to and review with the Board any issues that arise with respect to the quality or integrity of the Company's financial statements, the Company's compliance with legal or regulatory requirements, the performance and independence of the independent auditors, management's assessment of internal control over financial reporting, the performance of the internal audit function and any other matters that the Committee deems appropriate or is requested to review for the benefit of the Board.
  
  
• The Committee shall provide minutes of Committee meetings to the Board, and report to the Board on any significant matters arising from the Committee's work.
  
  

Additional Authority

The Committee is authorized, on behalf of the Board, to do any of the following as it deems necessary or appropriate:

1. Engagement of Advisors
   
   
• The Committee may engage independent counsel and such other advisors it deems necessary or advisable to carry out its responsibilities and powers, and, if such counsel or other advisors are engaged, shall determine the compensation or fees payable to such counsel or other advisors.
  
  
2. Conflicts of Interest
   
   
• The Committee shall conduct an appropriate review of all related party transactions for potential conflict of interest situations on an ongoing basis, and the approval of the Committee shall be required for all such transactions. The Committee may establish such policies and procedures as it deems appropriate to facilitate such review.
  
  
3. General
   
   
• The Committee may form and delegate authority to subcommittees consisting of one or more of its members as the Committee deems appropriate to carry out its responsibilities and exercise its powers.
  
  
• The Committee may perform such other oversight functions outside of its stated purpose as may be requested by the Board from time to time.
  
  
• In performing its oversight function, the Committee shall be entitled to rely upon advice and information that it receives in its discussions and communications with management, the independent auditor and such experts, advisors and professionals as may be consulted with by the Committee.
  
  
• The Committee is authorized to request that any officer or employee of the Company, the Company's outside legal counsel, the Company's independent auditor or any other professional retained by the Company to render advice to the Company attend a meeting of the Committee or meet with any members of or advisors to the Committee.
  
  
• The Committee may conduct or authorize such inquiries into matters within the Committee's scope of responsibility as the Committee deems appropriate.
  
  
• The Committee may perform each of the responsibilities of the Committee described above.
  
  
• The Committee may appoint a chair of the Committee, unless a chair is designated by the Board.
  
  
• Cause the officers of the corporation to provide such funding as the Committee shall determine to be appropriate for payment of compensation to the Company's independent auditor and any legal counsel or other advisers engaged by the Committee, and payment of ordinary administrative expenses of the audit committee that are necessary or appropriate in carrying out its duties.
  
  

Notwithstanding the responsibilities and powers of the Committee set forth in this Charter, the Committee does not have the responsibility of planning or conducting audits of the Company's financial statements or determining whether the Company's financial statements are complete, accurate and in accordance with GAAP. Such responsibilities are the duty of management and, to the extent of the independent auditor's audit responsibilities, the independent auditor. In addition, it is not the duty of the Committee to conduct investigations or to ensure compliance with laws and regulations.