Exhibit 10.38







	




Exhibit 10.38 




LEASE
TERMINATION AGREEMENT



THIS LEASE TERMINATION
AGREEMENT (this “Agreement”) is made as of October 1, 2003,
between Rotunda Partners II, a California limited liability company
(“Landlord”), and Scientific Learning Corporation, a Delaware
corporation (“Tenant”).



RECITALS



Whereas, Landlord
and Tenant entered into a lease dated March 21, 2000 (the “Original
Lease”), in which Landlord leased to Tenant, and Tenant leased from
Landlord premises located in 300 Frank H. Ogawa Plaza, Oakland, CA (the
“Building”) consisting of approximately 69,483 rentable square
feet as described in the Lease (the “Original Leased
Premises”).



Whereas, The
parties wish to terminate the Original Lease subject to the terms and conditions
contained in this Agreement and to concurrently enter into a new lease for
different space in the Building (the “New Lease”).



        NOW,
THEREFORE, the parties hereby agree as follows:



        1.
Termination of Original Lease. The Original
Lease shall terminate effective as of September 30, 2003 (the “Termination
Date”).



        2.
Termination Fee. Tenant shall pay to Landlord, the amount of
$2,200,000 (the “Termination Fee”),
by separate checks, in monthly installments of $146,666.67,
commencing on October 1, 2003, and continuing on the first of each month until
paid in full. The Termination Fee shall be used by Landlord to reimburse
Landlord for commissions and tenant-improvement expenses relating to
Tenant’s initial build-out under the Original Lease (prior to Tenant’s
original occupancy of the Original Leased Premises in March 2001) of that
portion of the Original Leased Premises which Tenant is vacating in accordance
with this Agreement, and also to pay for commissions and tenant improvements
expenses in connection with re-leasing that portion of the original Premises
that the Tenant is vacating in accordance with this Agreement.



        3.
Release. Tenant and Landlord each acknowledge to the other that upon full
compliance with the terms of this Agreement, Landlord and Tenant shall each have
fully performed all of their respective obligations under the Original Lease.



        4.
Vacation of Original Premises. On or before
the Termination Date, Tenant shall vacate the Original Leased Premises and
surrender control and possession of the Original Premises to Landlord in its
then current condition, with the understanding that Tenant may remove from the
Original Premises any cubicles or other furniture that it reasonably wishes to
use in the sixth and seventh (penthouse) floor spaces that it will be occupying
in the Building, and Landlord shall be entitled to retain any furniture left in
the Original Premises following the Termination Date.



        5.
No Consent Required. Landlord represents and warrants to
Tenant that Landlord has the full right, legal power and actual authority to
enter into this Agreement and to terminate the Original Lease, and has obtained
the consent of any and all persons, firms or entities, including Landlord’s
lenders and equity partners, as is required to enter into this Agreement and to
terminate the Original Lease. Notwithstanding the termination of the Original
Lease and the release of liability contained herein, the representations and
warranties set forth in this paragraph shall survive the Termination Date and
Landlord shall be liable to Tenant for any inaccuracy or any breach thereof.



        6.
Miscellaneous.










	 	        (a)
Voluntary Agreement. The parties have read this Agreement and the mutual
releases contained in it, and on advice of counsel they have freely and voluntarily
entered into this Agreement.






	

















	 	        (b)
Attorneys’ Fees. If either party commences an action against the other
party arising out of or in connection with this Agreement, the prevailing party shall be
entitled to recover from the losing party reasonable attorneys’ fees and costs of
suit.






	 	        (c)
Successors. This Agreement shall be binding on and inure to the benefit of the
parties and their successors.






	 	        (d)
Counterparts. This Agreement may be executed in two or more counterparts, each of
which shall be deemed to be a duplicate original, but all of which together shall
constitute one and the same instrument.






	 	        (e)
Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of California.






	 	        (f)
Additional Documents. Each of the parties hereto specifically agree to
execute such other and further instruments and documents, as may be reasonably required to
effectuate the terms, conditions and objectives of this Agreement.






	 	        (g)
Entire Agreement. This Agreement constitutes the entire understanding of the
parties hereto and supersedes all prior agreements, understandings, discussions,
statements and negotiations of the parties relating to the subject matter herein
contained.






	 	        (h)
Authority. Each party signing this Agreement represents and warrants that each
person signing on such party’s behalf is authorized to execute and deliver this
Agreement, and that this Agreement will thereby become binding upon Landlord and Tenant,
respectively.






	 	        (i)
Forwarding Address. All notices to Tenant shall hereafter be deemed to be delivered
to  Tenant if sent to Tenant at the following address:






	 	300 Frank H. Ogawa Plaza, 6th floor

Oakland, CA  94612

Attn: General Counsel






	 	        (j)
Cross-Default. The parties acknowledge that a default in the payment of the
Termination Fee which remains uncured ten (10) days following Tenant’s receipt of
Landlord’s notice of non-payment, shall constitute a default under Article 12 of the
Lease, and shall entitle Landlord to exercise any and all remedies available to it under
such Article.






	 	        (k)
Late Fees. The amounts due under Section 2 of this Agreement shall be
subject to the Late Fee provisions of Section 3.4 of the Lease.






	














	



IN WITNESS
WHEREOF, the parties hereto have executed this Lease Termination Agreement
as of the date first written above.













	




Dated: October 7, 2003		LANDLORD:


ROTUNDA PARTNERS II, a California Limited Liability Company


By: /s/ Mark A. Moss

——————————————

Mark A. Moss

Managing Member










	




Dated: October 7, 2003 		TENANT:


SCIENTIFIC LEARNING CORPORATION, a Delaware corporation


By: /s/ Robert C. Bowen

——————————————

Robert C. Bowen

CEO