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Exhibit 10.3

Amendment No. 1 to
SLC License Agreement
 
This Amendment No. 1 (this “Amendment”) to the SLC License Agreement (the
“License Agreement”) is effective as of July 1, 2010 (“Effective Date”) between
Scientific Learning Corporation, a Delaware corporation (“SLC”) and Posit
Science Corporation (formerly known as Neuroscience Solutions Corporation, a
California corporation (“NSC”). NSC and SLC may be referred to herein
individually as a “party” and collectively as the “parties.”

Recitals
 
A.
SLC and NSC have entered into the SLC License Agreement effective September 30,
2003.

 
B.
SLC and NSC now wish to amend certain provisions of that Agreement.

Agreement
 
1.
The introductory paragraph of Section 4.3 of the License Agreement is hereby
amended to read in full as follows, effective July 1, 2010:

 
4.3 Pass-Through Royalty.  In consideration of the rights granted under Section
2.2, NSC shall pay to SLC an additional nonrefundable pass-through royalty
(singly, the “Pass-Through Royalty” and together with the Base Royalty, the
“Royalties”) equal to four percent (4%) of Net Sales related to Royalty-Bearing
Offerings that: (a) are covered by a Third Party Patent; or (b) would
constitute, but for the license granted to NSC under Section 2.2, a direct or
indirect infringement of any pending or issued claim within a Third Party
Patent, including infringement by contributing to or inducing the infringement
of others; or (c) would otherwise require SLC to pay the Regents a royalty in
accordance with the terms of the UC License as in effect on the Effective Date
(“Pass-Through Net Sales”).   The Pass-Through Royalty Rate shall be reduced as
provided in the following subsections (i) through (iv) in accordance with the
Amendments No. 3 and No. 5 to the UC License:
 
2.
New subsection (iv) is hereby added to Section 4.3 of the License Agreement,
effective as of July 1, 2010, as set forth in full below:

 
(iv)  As provided by Amendment No. 5 to the UC License, to encourage NSC to make
use of the Third Party Patents in their remaining limited term, the Pass-Through
Royalty rate will be reduced each calendar year, subject to the following
terms.  Effective July 1, 2010 and October 1, 2010, the Pass-Through Royalty
rate shall be reduced by a quarter point (0.25%) and effective at the beginning
of each calendar quarter thereafter the Pass-Through Royalty rate shall be
reduced by one-eighth point (0.125%); provided that (a) the Pass-Through Royalty
rate shall not be less than 2.0% and (b) the rate reduction shall occur only if
the resulting total Pass-Through Royalty payment for the applicable year-to-date
period, together with the royalty paid by SLC to the Regents with respect to the
Third Party Patent on SLC’s own net sales for that same period (collectively the
“Regents Royalty”) exceeds the Regents Royalty payment for the corresponding
prior year period. For clarity, given the current 3.5% royalty rate and assuming
no additional reductions under Section 4.3(ii), as long as the Regents Royalty
payment increases for each year-to-date period compared to the prior year, the
Regents Royalty Rate will step down as follows:
 
 
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Period:
New Rate:
Q3 2010
3.25%
Q4 2010
3.00%
Q1 2011
2.875%
Q2 2011
2.75%
Q3 2011
2.625%
Q4 2011
2.5%
Q1 2012
2.375%
Q2 2012
2.25%
Q3 2012
2.125%
Q4 2012
2.00%

 
3.
Section 4.6 (b) of the License Agreement is hereby amended to read in full as
follows, effective retroactively to September 30, 2003:

 
c.  In the event NSC sells a Bundled Offering where it is not paid a fixed price
per unit, but is instead paid on the basis of any of (i) the number of people to
whom the Bundled Offering will be offered, (ii) the number of people who use the
Bundled Offering to a designated milestone, or (iii) a measure of benefit from
usage (any of which is hereafter a “Performance Sale”), then, for purposes of
computing the Calculated Allocation under this Section 4.6 for a Performance
Sale, (A) if a Bundled Offering includes elements for which no List Price has
been established (Unpriced Elements),  the denominator of the fraction used in
determining the Calculated Allocation shall include only the elements in the
Bundled Offering that do have a List Price, provided  that the Bundled Price
must include the revenue associated with the Unpriced Elements, and (B)
beginning July 1, 2010, in consideration of the post-sale marketing that must be
done in connection with a Performance Sale, NSC may include as one of the
Non-Royalty Bearing Components of each Performance Sale a marketing allowance
equal to twenty percent (20%) of the List Prices of the Royalty Bearing
Offerings in the Bundled Offerings that make up that Performance Sale.
 
4.
New subsection (g) is hereby added to Section 4.6 of the License Agreement,
effective as of July 1, 2010, as set forth in full below:

 
g.  Certain Transactions.  In the event of a new Bundled Offering brought to
market after July 1, 2010, in which NSC needs to pay royalties to three or more
patent holders because the Bundled Offering uses royalty bearing inventions from
a variety of patent holders (the “Holders”), and for which there are not List
Prices for each element, Royalties shall be calculated as the Royalty Rate
multiplied by the product of (i) Net Sales multiplied by (ii) the Patent Ratio
(defined below).  As used herein the “Patent Ratio” means a ratio in which the
numerator is one (1) and the denominator is the sum of the Holders, plus, if NSC
patents are used, one. For clarity, the parties agree that the Pass-Through
Royalty and the base Royalty are each counted as one Holder.
 
5.
Notwithstanding any other provision of this Amendment No. 1, this Amendment No.
1 shall not enable NSC to recoup or seek a refund or credit with respect to
royalties already paid to SLC, on its own behalf or to pass-through to the UC
Regents.

 
 
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6.
Except as expressly amended by this Amendment No. 1, the License Agreement shall
remain in full force and effect.

 
In Witness Whereof, the parties hereto have caused their duly authorized
representatives to execute and deliver this Amendment as of the Effective Date.
 
Scientific Learning Corporation
       
By: 
/s/ D. Andrew Myers
   
Name: D. Andrew Myers
   
Title:   Chief Executive Officer
             
Posit Science Corporation
         
By:
/s/ Steven P. Aldrich
   
Name: Steven P. Aldrich
   
Title:  Chief Executive Officer
 

 
 
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