SLC LICENSE AGREEMENT

This Amendment No. 3 to the SLC License Agreement (this “Amendment No. 3”) is entered into as of December 11, 2013 (the “Amendment Effective Date”), by and between Scientific Learning Corporation, Inc., a Delaware corporation (“SLC”) and Posit Science Corporation (f/k/a Neuroscience Solutions Corporation), a California corporation (“NSC”).

RECITALS:

AGREEMENT:

 

The Parties therefore agree as follows:

 

1.

The following new definitions are hereby added to Section 1 (Definitions) of the License Agreement:

 

“Acquirer” means any person or Entity that: (i) owns or controls, directly or indirectly, all or substantially all of a party’s assets or the outstanding voting securities or equity interests of a party after a Change in Control occurs that involves that party, and (ii) was an unaffiliated party to that party at any time prior to the initiation of that Change in Control.

 

“Entity” means any corporation (including any non-profit corporation), general partnership, limited partnership, limited liability partnership, joint venture, estate, trust, cooperative, foundation, society, political party, union, company (including any limited liability company or joint stock company), firm or other enterprise, association, organization or entity.

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“Option Fee” means an amount equal to four times the amount payable by NSC under this Agreement during twelve (12) months immediately preceding the effective date of a Change in Control of NSC.

“Pre-existing NSC Acquirer Product” means any product that is developed, under development, sold, marketed or otherwise made available by an Acquirer, or any person or Entity affiliated with an Acquirer, at any time prior to a Change in Control involving NSC.

“Fitting of Hearing Aids and Cochlear Implants” means activities designed to select the appropriate hearing aid or cochlear implant, and improve the performance of the selected hearing aid or cochlear implant by choosing appropriate device settings.

“Reserved SLC Field” means the fields of Fitting of Hearing Aids and Cochlear Implants.

2.

The definition of Change of Control in section 1 is deleted entirely and replaced with the following:

 

 “Change in Control” of an Entity means the occurrence of any of the following:

 

 

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3.

The last sentence of Section 1.7 (Health Field) of the License Agreement is hereby deleted in its entirety and replaced with the following:

 

“Notwithstanding the above, the Health Field shall not include: (i) product or services, whether or not in the preceding clauses (a) through (c), that are sold or marketed in the Educational Field (without regard to the last sentence of Section 1.6) and (ii) only with respect to the Non-Core SLC Patents, the Reserved SLC Field.”

 

4.

The last sentence of Section 1.15 (“SLC Patents”) of the License Agreement is hereby deleted in its entirety and replaced with the following:

 

“SLC Patents do not include existing or future patents held by a third party that merges or consolidates with SLC, or otherwise acquires SLC, in a transaction involving a Change In Control of SLC or to whom SLC assigns the Agreement (other than the SLC Patents existing immediately prior to such Change In Control).”

 

 The next to last sentence of Section 3.1 (Ownership) of the License Agreement is hereby deleted in its entirety and replaced with the following:

“Except for the licenses expressly granted in Section 2.1, 2.2, and 2.3, SLC and its licensors reserve and retain all rights with respect to the (i) Patents (including the Non-Core SLC Patents and including the full right to enforce or assign such patents to any third party and (ii) SLC Software.

5.

The first sentence of Section 2.4(d) (Sublicense in Connection with Sale of a Division) of the License Agreement is hereby deleted in its entirety and replaced with the following:

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“Notwithstanding the provisions of Section 2.4(a) to the contrary, NSC may, without the express written consent of SLC, sublicense the license rights granted to it under (i) Section 2.1 but only with respect to the Core SLC Patents, and (ii) Sections 2.2 and 2.3, to a third party (provided that with regard to both (i) and (ii) above, such third party is not a Competitor as defined in Section 9.4) in connection with the sale by NSC of a “Division” (as defined below) to such third party, provided that such sublicense shall (x) be exclusive (even as to NSC) in a defined sub-field of use within the Health Field which subfield encompasses and is limited to the health indications addressed by the products and services of the Division, which exclusivity may be limited in geographic territory, and (y) be granted pursuant to a written sublicense agreement that imposes on the sublicensee terms consistent with, and no less protective of SLC’s and its licensors’ rights than, the terms imposed on NSC under this Agreement.”

6.

Section 4.2 (Base Royalty) of the License Agreement is hereby deleted in its entirety and replaced with the following:

“In consideration of the license rights granted under Section 2, NSC shall pay to SLC a nonrefundable base royalty (“Base Royalty”) equal to the product obtained by multiplying: (a) 0.4% (the “Applicable Base Royalty Percentage”) by (b) Net Sales.”

7.

Sub-section (b) of the second sentence of Section 4.10 (Minimum Annual Base Royalty Payments) of the License Agreement is hereby deleted in its entirety and replaced by the following:

“(b) for every year thereafter, Fifteen thousand dollars ($15,000) per year, less in each year the Base Royalties reported and paid for Net Sales accrued during the first quarter of such calendar year, regardless of actual Net Sales during such years.”

8.

Section 11.5 (Assignment) of the License Agreement is hereby deleted in its entirety and replaced with the following:

 

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9.

Exhibit A (Licensed Patents) to the License Agreement shall be amended (i) by re-designating as ‘Non-Core’ those SLC Patents that are listed on Exhibit A to this Amendment No. 3 (in order to make such re-designated SLC Patents non-exclusive), and (ii) with regard solely to the foregoing patents, re-designating as “No” the “NSC Cost” column in Exhibit A to the License Agreement (to indicate that NSC shall have no obligation to pay Prosecution Expense for any patent re-designated hereby as “Non-Core”).

For clarity, (i) SLC Patents listed on Exhibit B to this Amendment No. 3 shall remain “Core SLC Patents”; (ii) SLC Patents listed on Exhibit C to this Amendment No. 3 shall remain “Non-Core”; (iii) jointly owned patents termed SLC Patents in the Licensed Agreement that are not subject to this Amendment No. 3 are listed in Exhibit D to this Amendment No. 3, and (iv) patents listed on Exhibit E to this Amendment No. 3 shall remain Third Party Patents.

 

10.

SLC acknowledges and agrees that (i) no further patent prosecution payments are due from NSC for the period prior to the effective date (ii) and that the minimum payment in calendar year 2013 is $15,000 and the royalty rate for calendar year 2013 is 0.4%, and (iii) that NSC has made $26,260.46 in royalty payments to SLC for calendar year 2013 as of the date of this Amendment.

11.

This Amendment No. 3 will be effective as of the Amendment Effective Date.  Except as otherwise provided in this Amendment No. 3, the terms of the License Agreement will remain in full force and effect.

IN WITNESS WHEREOF, and intending to be legally bound, the parties have caused this Amendment No. 3 to be made and executed by their duly authorized representatives.

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EXHIBIT 10.1

 

Exhibit A: Core Patents to be Converted to Non-Core

 

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EXHIBIT 10.1

 

Exhibit B: Core Patents to Remain Core (US patents unless otherwise noted in text)

Exhibit C: Non-Core Patents to Remain Non-Core (all are US patents)

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Exhibit D: Jointly Assigned Patents Not Affected By This Amendment (all are US patents, all are Core)

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Exhibit E: Third-Party Patents Not Affected By This Amendment (all are US patents, all are Core)

 

 

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