Exhibit 10.24

Certain identified information has been excluded from the exhibit because it is both (i) not material and (ii) would likely cause competitive harm to the Company, if publicly disclosed. Double asterisks denote omissions.

AGREEMENT

AGREEMENT, dated as of May 5, 1994 between THE TRUSTEES OF COLUMBIA UNIVERSITY IN THE CITY OF NEW YORK, a New York Corporation (“Columbia”), and SCHRÖDINGER, INC. (“Schrödinger”), a California corporation.

WHEREAS, Schrödinger holds the copyrights in the software program PS-GVB v1.0;

WHEREAS, the PS-GVB v1.0 program incorporates portions of code developed at Columbia, the California Institute of Technology and the University of Texas at Austin, as well as by Schrödinger;

WHEREAS, the authors of the portions of code incorporated in the PS-GVB v1.0 program that were developed at Columbia have assigned their rights therein to Columbia; and

WHEREAS, Columbia wishes to license to Schrödinger the portions of code incorporated in the PS-GVB v1.0 program that were developed at Columbia and any improvements to the PS-GVB v1.0 program that will be developed at Columbia in the future, and Schrödinger wishes to obtain such a license in order to be able to market the PS-GVB v1.0 program and modifications and improvements thereto as a commercial product or commercial products;

NOW, THEREFORE, the parties agree as follows:

1.    Definitions.

a.    “Affiliate” shall mean any corporation or other business entity which directly or indirectly controls, is controlled by, or is under common control with another corporation or business entity. Control means ownership or other beneficial interest in 50% or more of the voting stock or other voting interest of a corporation or other business entity.

b.    “Columbia Code” shall mean the portions of code incorporated in the Software developed at Columbia and existing on the effective date of this Agreement, and associated documentation.

c.    “Columbia Improvements” shall mean (i) all corrections, modifications and improvements to the Software (including improvements to Columbia Code), other than New Modules, developed at Columbia, which are (a) assigned to Columbia pursuant to its Statement of Policy on Proprietary Rights in the Intellectual Products of Faculty Activity in effect at the time such corrections, modifications or improvements are disclosed to Columbia in accordance with such Statement of Policy, or (b) otherwise assigned to Columbia, and (ii) associated documentation.

d.    “Columbia New Module Code” shall mean (i) the portions of code developed at Columbia and incorporated in a New Module which are (a) assigned to Columbia pursuant to its Statement of Policy on Proprietary Rights in the Intellectual Products of Faculty Activity in effect at the time such portions of code are disclosed to Columbia in accordance with such Statement of Policy, or (b) otherwise assigned to Columbia, and (ii) associated documentation.

e.    “Gross Revenues” shall mean all fees or other payments received by Schrödinger or an Affiliate under a license or sub-license granted for the use of the Software or a New Module or an agreement for maintenance of the Software or a New Module.

f.    “New Module” shall mean corrections, modifications or improvements to the Software priced and/or marketed by Schrödinger as a separate software product and not as a new release of the Software, including each new version or release thereof. A New Module may require the Software in order to function or may incorporate all or a portion of the Software.

 

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g.    “Non-Columbia Code” shall mean (i) the portions of code incorporated in the Software or the New Modules other than the Columbia Code, Columbia Improvements, or Columbia New Module Code, and (ii) associated documentation.

h.    “Software” shall mean the electronic structure software program PS-GVB v1.0 and all modifications and improvements thereto, including each new version or release thereof, other than New Modules.

2.    License Grant and Title.

a.    Subject to the terms and conditions hereinafter set forth, Columbia hereby grants to Schrödinger:

(i)    a perpetual worldwide license to use and to sub-license the Columbia Code in the Software and in the New Modules, and to market the Columbia Code as part of the Software and of the New Modules;

(ii)    a perpetual worldwide license to use and to sub-license the Columbia Improvements in the Software and in the New Modules and to market the Columbia Improvements as part of the Software and of the New Modules; and (iii) a perpetual worldwide license to use and to sub-license the Columbia New Module Code in the New Modules and to market the Columbia New Module Code as part of the New Modules.

 

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b.    The license granted under Section 2.a.(i) hereof shall be an exclusive license. The licenses granted under Sections 2.a.(ii) and 2.a.(iii) hereof shall be non-exclusive, provided that upon written notification by Schrödinger of an impending new release of the Software or a New Module, Columbia will make reasonable efforts to obtain assignments from any authors of Columbia Improvements or Columbia New Module Code incorporated in such new release who have not previously assigned such Columbia Improvements or Columbia New Module Code to Columbia and, in the event Columbia is successful in obtaining such assignments from all such authors, Columbia shall so notify Schrödinger in writing. Upon such written notification, the license granted to Schrödinger under Section 2.a.(ii) or 2.a.(iii) with respect to the Columbia Improvements or Columbia New Module Code incorporated in such new release of the Software or a New Module shall become an exclusive license, and the representation and warranty by Columbia under Section 2.d. hereof shall thereupon apply, without the necessity of further action, to such Columbia Improvements or Columbia New Module Code. If Columbia is not successful in obtaining assignments from all authors of Columbia Improvements or Columbia New Module Code incorporated in any new release of the Software or a New Module, Columbia shall nonetheless refrain from granting any other license with respect to such Columbia Improvements or Columbia New Module Code, subject to the provisions of Section 8 hereof.

c.    The licenses granted under Sections 2.a.(i), (ii) and (iii) shall not be transferable except pursuant to Section 14.b. hereof.

d.    Columbia represents and warrants to Schrödinger that, subject to the provisions of 35 U.S.C. §200 et seq., Columbia has title to the Columbia Code and that Columbia has full legal right and power to grant to Schrödinger the licenses granted under this Agreement.

e.    This Agreement shall not transfer any title or ownership rights in the Columbia Code, Columbia Improvements or Columbia New Module Code, which shall at all times remain with Columbia.

 

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f.    All rights granted by Columbia to Schrödinger under this Agreement are subject to the requirements of 35 U.S.C. §200 et seq., as amended, and implementing regulations.

3.    No Maintenance. It is understood that Columbia will provide no maintenance or installation services of any kind hereunder. Columbia may, in its sole discretion, use reasonable efforts to assist Schrödinger in correcting errors in the Columbia Code, Columbia Improvements or Columbia New Module Code brought to Columbia’s attention by Schrödinger; provided, however, that Columbia will not be considered in breach of this Agreement if it is unable to do so.

4.    Licensing of Software by Schrödinger.

Any license agreement for, or agreement for maintenance of, the Software or any New Module entered into by Schrödinger, and any agreement sub-licensing the rights granted by this Agreement, shall;

a.    make adequate provision for the protection of the confidentiality of the Columbia Code, Columbia Improvements and Columbia New Module Code provided to the licensee, by requiring protections of at least the same scope as required under Section 6 hereof;

b.    include disclaimer and indemnity provisions substantially equivalent to the disclaimer and indemnity provisions included in Sections 10 and 11 hereof; and

c.    provide that Columbia shall not be required pursuant to such agreement to provide any maintenance or installation or support services of any kind whatsoever.

5.    Calculation of Royalties.

a.    In consideration of the licenses granted under Section 2 of this Agreement, Schrödinger shall pay to Columbia royalties calculated as set forth in this Section 5.

 

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b.    Prior to the execution of this Agreement, Schrödinger will analyze the Software and estimate, based on the number of lines of code in each subprogram of the Software, the percentages of the Software that constitute Columbia Code and Non-Columbia Code. Schrödinger will submit its estimate of the percentage of the Software that constitutes Columbia Code, together with its analysis of the Software on which such estimate is based, to Columbia in writing. Schrödinger’s estimate of the percentage of the Software that constitutes Columbia Code shall be subject to Columbia’s written approval.

c.    At the time of each new release of the Software, Schrödinger will repeat its analysis of the Software, using the same methodology, and estimate the percentages of the Software that constitute (i) Columbia Code or Columbia Improvements, and (ii) Non-Columbia Code. Schrödinger will submit its estimate of the percentage of the Software that constitutes Columbia Code or Columbia Improvements to Columbia in writing, and such estimate shall be subject to Columbia’s written approval. Each new estimate determined and approved in accordance with this Section 5.c. shall apply commencing on the first release date of the new release of the Software that led to such new estimate.

d.    With respect to the Software, Schrödinger shall pay to Columbia a percentage of Gross Revenues from each release of the Software equal to the product obtained by multiplying [**] by the applicable approved estimate of the percentage of such release of the Software that constitutes Columbia Code, or Columbia Code and Columbia Improvements, determined in accordance with Section 5.b. and 5.c. hereof.

 

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e.    When a New Module is released, Schrödinger will analyze the New Module, using the same methodology previously used to analyze the Software, and estimate the percentages of the New Module that constitute (i) Columbia New Module Code and (ii) Non-Columbia Code. Schrödinger will submit its estimate of the percentage of the New Module that constitutes Columbia New Module Code to Columbia in writing, and such estimate shall be subject to Columbia’s written approval. The analysis of a New Module set forth in this Section 5.e. shall be repeated at the time of each new release of such New Module, and the new estimate of the percentage of such New Module that constitutes Columbia New Module Code determined and approved in accordance with this Section 5.e. shall apply commencing on the first release date of the new release of such New Module.

f.    With respect to each New Module, Schrödinger shall pay to Columbia a percentage of Gross Revenues from each release of such New Module equal to the product obtained by multiplying [**] by the applicable approved estimate of the percentage of such release of such New Module that constitutes Columbia New Module Code, determined in accordance with Section 5.e. hereof.

g.    The approval by Columbia of a Schrödinger estimate of percentages under any part of Section 5 shall not be unreasonably withheld or delayed beyond [**] after Schrödinger’s estimate is submitted to Columbia. If Columbia does not give a written response to such estimate within the [**] period, it shall be conclusively presumed that Columbia has approved such estimate. If Columbia’s response to the estimate is not an approval, Columbia shall specify its reason for not approving the estimate, and shall state Columbia’s estimate of such percentages.

h.    In determining whether or not to approve any estimate submitted by Schrödinger pursuant to this Section 5., Columbia shall be entitled, upon request, to review all lines of code of the release of the Software or of the New Module to which the estimate applies. Schrödinger shall provide a copy of all such lines of code to Columbia within [**] of receipt of such a request.

 

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6.    Confidentiality; Protection of Software Components and Related Information.

a.    Protection of Columbia Code.

(i)    Schrödinger hereby acknowledges that the Columbia Code, Columbia Improvements and Columbia New Module Code are proprietary and confidential and agrees to retain the Columbia Code, Columbia Improvements and Columbia New Module Code in confidence and not disclose the Columbia Code, Columbia Improvements and Columbia New Module Code, or any portion thereof, to third parties, except insofar as permitted by, and for the purposes of and in accordance with the terms of, this Agreement, including the licensing of the Software and New Modules to third parties and the sublicensing of the licenses granted hereby. Schrödinger (A) will protect the Columbia Code, Columbia Improvements and Columbia New Module Code in the same manner that it protects its own confidential information; (B) will permit access to the Columbia Code, Columbia Improvements and Columbia New Module Code only to its employees having a need to know for the purposes of developing, installing, maintaining, or supporting the Software or New Modules and will inform in writing such authorized employees who will have access to the Columbia Code, Columbia Improvements or Columbia New Module Code of the obligations of confidentiality under this Agreement; and (C) will not duplicate all or any part of the Columbia Code, Columbia Improvements or Columbia New Module Code, except insofar as permitted by this Agreement for the purposes authorized hereunder.

(ii)    These obligations of confidentiality are not applicable to any materials if and to the extent Schrödinger can demonstrate that such materials:

(A)    are in the public domain through no fault of Schrödinger;

 

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(B)    were known to Schrödinger prior to initial disclosure by Columbia, whether such disclosure occurred before or after the effective date of this Agreement;

(C)    were disclosed to Schrödinger by a third party having a legal right to disclose such materials.

(iii)    Any termination of this Agreement or the license granted hereunder shall not terminate Schrödinger’s obligations of confidentiality under this Section.

b.    Protection of Non-Columbia Code.

(i)    Columbia hereby acknowledges that the Non-Columbia Code is proprietary and confidential and Columbia agrees to retain any Non-Columbia Code disclosed to it by Schrödinger in confidence and not disclose same, or any portion thereof, to third parties, except insofar as permitted by, and for the purposes of and in accordance with the terms of, this Agreement. Columbia (A) will protect such Non-Columbia Code in the same manner that it protects its own confidential information; and (B) will not duplicate all or any part of such Non-Columbia Code, except insofar as permitted by this Agreement for the purposes authorized hereunder. Notwithstanding the foregoing, Columbia may disclose any Non-Columbia Code disclosed to it by Schrödinger (i) to students at Columbia performing research under the direction of Dr. Richard Friesner, provided that each such student shall have previously signed an agreement reasonably acceptable to Schrödinger to protect the confidentiality of such Non-Columbia Code, or (ii) as otherwise approved in writing by Schrödinger.

(ii)    These obligations of confidentiality are not applicable to any materials if and to the extent Columbia can demonstrate that such materials:

(A)    are in the public domain through no fault of Columbia; or

 

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(B)    were known to Columbia prior to initial disclosure by Schrödinger, whether such disclosure occurred before or after the effective date of this Agreement; or

(C)    were disclosed to Columbia by a third party having a legal right to disclose said materials.

(iii)    Any termination of this Agreement shall not terminate Columbia’s obligations of confidentiality under this Section.

7.    Reports and Payments.

a.    On or before the last business day of [**] of each year of this Agreement, Schrödinger shall submit to Columbia a written report (the “Payment Report”) stating with respect to the preceding calendar quarter, a calculation under Section 5 hereof of the amounts due to Columbia from Schrödinger, making reference to amounts due for each release of the Software and each release of each New Module.

b.    Simultaneously with the submission of each Payment Report, Schrödinger shall make payment to Columbia of the amounts due for the calendar quarter covered by the Payment Report.

c.    Schrödinger shall maintain at its principal office usual books of account and records showing its actions under this Agreement. Upon reasonable notice, such books and records shall be open to inspection and copying, at Schrödinger’s principal office, and at Columbia’s expense, during usual business hours, by an independent certified public accountant selected by the Columbia to whom Schrödinger has no reasonable objection, for [**] after the calendar quarter to which they pertain, for purposes of verifying the accuracy of the amounts paid by Schrödinger to Columbia under this Agreement.

 

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8.    Use for Research Purposes of Licenses Granted. Columbia reserves the right to use the Columbia Code, Columbia Improvements and Columbia New Module Code for research purposes and to permit other academic or not-for-profit research institutions to use same for research purposes.

9.    Freedom of Publication. Nothing in this Agreement shall restrict the right of Columbia, its faculty or students to publish, disseminate or otherwise disclose descriptions of the Columbia Code, Columbia Improvements or Columbia New Module Code for scholarly purposes or, in connection therewith, to disclose pertinent illustrative portions of such code.

10.    Disclaimer of Warranties.

a.    Columbia disclaims any responsibility for the accuracy or correctness of the Columbia Code, Columbia Improvements or Columbia New Module Code or for their use or application by Schrödinger or by any Affiliate, licensee or sub-licensee of Schrödinger.

b.    COLUMBIA MAKES NO REPRESENTATION OR WARRANTY EITHER EXPRESS OR IMPLIED OF ANY KIND, INCLUDING AS TO MERCHANTABILITY OR TO THE ADEQUACY OR SUITABILITY OF THE COLUMBIA CODE, COLUMBIA IMPROVEMENTS OR COLUMBIA NEW MODULE CODE FOR ANY PARTICULAR PURPOSE OR TO PRODUCE ANY PARTICULAR RESULT, EXCEPT AS EXPRESSLY STATED IN SECTION 2.d. HEREOF. NEITHER COLUMBIA, NOR ANY EMPLOYEE NOR AGENT OF COLUMBIA, SHALL HAVE ANY LIABILITY TO SCHRÖDINGER OR ANY AFFILIATE, LICENSEE OR SUB-LICENSEE OF SCHRÖDINGER OR TO ANY OTHER PERSON ARISING OUT OF THE USE OF THE COLUMBIA CODE, COLUMBIA IMPROVEMENTS OR COLUMBIA NEW MODULE CODE, WHETHER ALONE OR AS INCORPORATED IN THE SOFTWARE OR ANY NEW MODULES, BY SCHRÖDINGER OR ANY AFFILIATE, LICENSEE OR SUB-LICENSEE OF SCHRÖDINGER OR ANY OTHER PARTY FOR ANY REASON, INCLUDING BUT NOT LIMITED TO THE LACK OF MERCHANTABILITY OR INADEQUACY OR UNSUITABILITY OF THE COLUMBIA CODE, COLUMBIA IMPROVEMENTS OR COLUMBIA NEW MODULE CODE FOR ANY PARTICULAR PURPOSE OR TO PRODUCE ANY PARTICULAR RESULT, OR FOR ANY LATENT DEFECTS THEREIN, OR FOR THE FAILURE OF COLUMBIA TO PROVIDE SCHRÖDINGER OR ANY AFFILIATE, LICENSEE OR SUB-LICENSEE OF SCHRÖDINGER OR ANY OTHER PERSON ANY CORRECTIONS IN THE COLUMBIA CODE, COLUMBIA IMPROVEMENTS OR COLUMBIA NEW MODULE CODE.

 

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c.    In no event will Columbia, or its trustees, officers, agents, or employees, be liable to Schrödinger, any Affiliate, licensee or sub-licensee of Schrödinger, or any other party, for any loss or damages, consequential or otherwise, including, but not limited to, time, money, or good will, arising from the use or operation of the Columbia Code, Columbia Improvements or Columbia New Module Code.

11.    Indemnity. Schrödinger shall hold harmless, defend and indemnify Columbia and its trustees, officers, agents and employees, from and against any damages, suits, claims, liabilities, costs and expenses (including reasonable attorneys’ fees actually incurred) based on or arising out of this Agreement, including without limitation, the manufacture, packaging, marketing, use, sale, rental or lease of the Columbia Code, Columbia Improvements or Columbia New Module Code by Schrödinger, its Affiliates, or its (or their) licensees or sub-licensees.

12.    Use of Name. Schrödinger will not use the name of Columbia University for any purpose whatever without Columbia’s written consent. The name of any faculty member, other employee or student of Columbia University will not be used by Schrödinger without the written consent of such person.

 

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13.    Termination.

a.    Columbia may terminate this Agreement and the licenses granted hereunder upon [**] written notice of Schrödinger’s material breach of the Agreement and Schrödinger’s failure to cure the specified breach within [**] of receipt of said notice.

b.    Schrödinger’s obligations under Sections 6, 11 and 12 and under Sections 5 and 7 for royalty payments payable in connection with agreements for licensing, sub-licensing or maintaining the Software or any New Modules entered into by Schrödinger prior to the termination of this Agreement shall survive termination of this Agreement.

c.    Upon termination of this Agreement, the licenses granted under Section 2 hereof shall be revoked and Schrödinger shall thereafter be prohibited from using the Columbia Code, Columbia Improvements and Columbia New Module Code in the Software or any New Module and from marketing the Columbia Code, Columbia Improvements and Columbia New Module Code as part of the Software or the New Modules. Upon such termination, at the request of any licensee of Schrödinger under a license or sub-license in effect as of such termination, Columbia shall grant directly to such licensee a license to use the Columbia Code, Columbia Improvements or Columbia New Module Code incorporated in the Software or New Modules licensed by Schrödinger to such licensee, on the same terms and conditions concerning such use as those embodied in the then-existing license between Schrödinger and its licensee.

 

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14.    General Provisions.

a.    Notice. Any notice or other communication required or permitted to be given under this Agreement shall be sufficient if in writing and shall be considered given when mailed by certified or registered mail, return receipt requested, to the parties at the following addresses (or at such other address that a party may specify by notice hereunder):

 

If to Columbia:		Director
		Office of Science & Technology Development
		Columbia University
		411 Low Memorial Library
		New York, New York 10027
with a copy to:		Office of the General Counsel
		Columbia University
		110 Low Memorial Library
		New York, New York 10027
If to Schrödinger:		Dr. Murco Ringnalda
		President
		Schrödinger, Inc.
		80 South Lake Avenue, Suite 735
		Pasadena, California 91101
with copies to:		Dr. Richard Friesner
		[**]
and		Gerald P. Halpern, Esq.
		Halpern & Pasternack, P.C.
		100 Ring Road West, Suite 105
		Garden City, New York 11530

b.    Assignment. This Agreement and the licenses granted hereunder may not be assigned or transferred without the prior written consent of Columbia, which shall not be unreasonably withheld or delayed beyond [**] after submission to Columbia of a request for such consent, provided that in connection with such a request, the name of the proposed assignee and such additional information relating to the proposed assignee as Columbia may reasonably request shall also be submitted.

c.    Governing Law. This Agreement shall be governed by New York law applicable to agreements made and to be performed in New York.

 

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d.    Entire Agreement; Amendment. This Agreement sets forth the entire agreement between the parties and supersedes all previous agreements whether written or oral. This Agreement may be amended only by an instrument in writing duly executed on behalf of both parties.

IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the day and year first above written.

 

 

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120 West 45th Street, 32nd Floor, New York, NY 10036    Tel: (646) 366-9555  Fax: (646) 366-9550

 

September 9, 2004

VIA FEDERAL EXPRESS

The Trustees of Columbia University in the City of New York

c/o Columbia University Science and Technology Ventures

500 West 120th Street

363 Engineering Terrace, Mail Code 2206

New York, NY 10027

Attention: Beth Kauderer, Associate Director

 

Re:		Agreement (“Agreement”), dated as of May 5, 1994, between The Trustees of Columbia University in the City of New York (“Columbia”) and Schrödinger, Inc., assigned to Schrödinger, L.L.C. (“Schrödinger”) by Consent of Columbia, dated as of March 27, 2002

Dear Beth:

This letter will confirm our discussions and will constitute an amendment to the above-referenced Agreement. All defined terms referenced herein and not otherwise defined are used as defined in the Agreement.

In consideration of the mutual promises set forth herein, the receipt and sufficiency of which are hereby acknowledged, as of the date of this letter (the “Amendment Effective Date”), Columbia and Schrödinger agree as follows:

1.    Section 1.a of the Agreement shall be deleted and replaced with the following provision:

“Affiliate” shall mean any corporation or other business entity which directly or indirectly controls, is controlled by, or is under common control with another corporation or business entity. Control means ownership or other beneficial interest in 50% or more of the voting stock or other voting interest of a corporation or other business entity. D. E. Shaw Technology Ventures, L.L.C. (which is Schrödinger’s managing member as of the date hereof) shall be considered an Affiliate of Schrödinger.

2.    Section 1.e of the Agreement shall be deleted and replaced with the following provision:

“Gross Revenues” shall mean all fees or other payments received by Schrödinger and Affiliates of Schrödinger for licensing, selling, leasing, or renting any Software or New Module (each as hereinafter defined); provided, however, that fees or other payments received by Schrödinger in connection with the licensing, selling, leasing, or renting of Software or a New Module to Columbia shall not constitute Gross Revenues, and provided further that fees or other payments constituting Services Fees (as hereinafter defined) shall not constitute Gross Revenues. In the event that the Software or a New Module is sold together with other products (such sale a “Multiple Product Sale”) for a single aggregate license fee (a “Multiple Product License Fee”), Gross Revenues shall mean the fraction of the Multiple Product License Fee attributable to the Software or New Module, as calculated by multiplying the Multiple Product License Fee by a fraction whose numerator is the then-current aggregate list price of any Software or New Module included in the Multiple Product Sale (or the aggregate number of tokens associated with such Software or New Module) and whose denominator is the then-current aggregate list price of all products included in the Multiple Product Sale (or the aggregate number of tokens associated with all products included in the Multiple Product Sale).

By way of example only and without limiting the foregoing:

[**].

3.    The following provision shall be added as Section 1.i of the Agreement:

“Schrödinger Improvements” shall mean any corrections, modifications and improvements to the Columbia Code or to the Columbia New Module Code developed by employees, agents or contractors of Schrödinger or of Schrödinger’s Affiliates.

4.    The following provision shall be added as Section 1.j of the Agreement:

“Services Agreement” shall mean an agreement between Schrödinger or an Affiliate of Schrödinger and one or more third parties under which Schrödinger undertakes to perform services using Software or a New Module on behalf of, or in collaboration with, such third parties in return for fees or other payments (any such fees or payments, “Services Fees”); provided, however, that fees or other payments received by Schrödinger in connection with a Services Agreement between Schrödinger and Columbia, shall not constitute Services Fees, and provided further that fees or other payments constituting Gross Revenues shall not constitute Services Fees.

5.    The following provision shall be added as Section 1.k of the Agreement:

“Unassigned Improvements” shall mean any corrections, modifications and improvements to the Columbia Code or the Columbia New Module Code made by Columbia and/or by faculty members, other employees, or students of Columbia that have not been assigned to Columbia, solely to the extent that Columbia is legally entitled to such assignments.

 

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6.    Section 2.a of the Agreement shall be deleted and replaced with the following provision:

Subject to the terms and conditions hereinafter set forth, Columbia hereby grants to Schrödinger:

(i)    a worldwide license to reproduce, use, execute, copy, compile, operate, sublicense and distribute the Columbia Code in connection with (A) the marketing, licensing and distribution of the Columbia Code, the Software, and/or one or more New Modules and (B) providing services pursuant to a Services Agreement or Services Agreements;

(ii)    reproduce, use, execute, copy, compile, operate, sublicense and distribute the Columbia Improvements and/or Columbia New Module Code in connection with (A) the marketing, licensing and distribution of the Columbia Code, the Software, and/or one or more New Modules (B) providing services pursuant to a Services Agreement or Services Agreements;

(iii)    a worldwide license to develop Schrödinger Improvements (and permit Schrödinger’s Affiliates to do so); and

(iv)    a worldwide license to use the Columbia Code (and permit Schrödinger’s Affiliates to do so) for purposes of (A) conducting scientific or technical research, and (B) back-up and disaster recovery.

For avoidance of doubt, it is the intent of Columbia, by the foregoing licenses, to grant Schrödinger and its Affiliates all necessary rights and licenses under any patents arising out of or relating to the Columbia Code or the Columbia New Module Code, trademarks, copyrights and any other intellectual property and proprietary rights held by Columbia (not including patents other than those arising out of or relating to the Columbia Code or Columbia New Module Code) to the extent such patents arising out of or relating to the Columbia Code or Columbia New Module Code, trademarks, copyrights and any other intellectual property and proprietary rights would otherwise be infringed by Schrödinger’s or, as applicable, Schrödinger’s Affiliates’ use of the Columbia Code or Columbia New Module Code in accordance with this Agreement. Nothing in this Agreement confers by estoppel, implication, or otherwise any license or rights under any patents of Columbia other than patents arising out of or relating to the Columbia Code or the Columbia New Module Code.

 

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7.    Section 2.b of the Agreement shall be deleted and replaced with the following provision:

The licenses granted under Section 2.a hereof shall be worldwide, exclusive licenses whose term shall be (subject to the terms and conditions of this Agreement) perpetual. Columbia will make reasonable efforts to obtain assignments from any authors of Unassigned Improvements proposed to be incorporated in any new release of Software or any New Module who have not previously assigned such Unassigned Improvements to Columbia and, in the event Columbia is successful in obtaining such assignments from any such authors, (i) Columbia shall so notify Schrödinger in writing, and (ii) such Unassigned Improvements for which Columbia has obtained assignments shall be deemed to be, as applicable, Columbia Improvements or Columbia New Module Code. Columbia shall not deliver an Unassigned Improvement to Schrödinger unless Columbia has obtained assignments from all authors of such Unassigned Improvement.

8.    The following provision shall be added as Section 2.g of the Agreement:

Schrödinger shall not sublicense the Columbia Code or the Columbia New Module Code to be incorporated in a product that is not sold directly by Schrödinger or distributed on Schrödinger’s behalf by a distributor of Schrödinger.

9.    Section 4 of the Agreement shall be deleted and replaced with the following provision:

4.    Licensing of Software by Schrödinger.

Schrödinger shall cause any license agreement for, or agreement for maintenance of, Software or a New Module entered into between Schrödinger and a customer of Schrödinger, and any agreement sub-licensing the rights granted by this Agreement, to:

a.    make adequate provision for the protection of the confidentiality of the Columbia Code, Columbia Improvements and Columbia New Module Code provided to the licensee, by requiring protections of at least the same scope as required under Section 6 hereof;

b.    include a disclaimer provision that is substantially equivalent to that set forth in Section 10 hereof; and

c.    provide that Columbia shall not be required pursuant to such agreement to provide any maintenance or installation or support services of any kind, whatsoever.

10.    Sections 5.a through 5.d of the Agreement shall be deleted and replaced with the following provision:

5.a.    Schrödinger shall pay to Columbia a “Software Royalty” equal to a percentage of Gross Revenues equal to the product obtained by multiplying [**]% by [**].

 

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11.    Sections 5.e through 5.h of the Agreement shall be deleted and replaced with the following provision:

5.b. Schrödinger shall pay to Columbia a “New Module Royalty” equal to a percentage of Gross Revenues equal to the product obtained by multiplying [**]% by [**].

12.    The following provision shall be added as Section 5.c of the Agreement:

In the event Schrödinger enters into a Services Agreement, for each Software product or New Module used in connection with such Services Agreement, for each year in which such Software product or New Module is used for any amount of time in connection with such Services Agreement, Schrödinger will pay to Columbia a “Services Agreement Royalty” equal to the product obtained by multiplying:

(a) the greater of:

 

(i)

the then-current Floor Percentage, or

 

(ii)

a percentage of Gross Revenues equal to the product obtained by [**].

For purposes hereof, “[**]” shall mean [**]. For purposes hereof, “[**]” shall mean [**].

“Schrödinger-Columbia Agreements” shall mean, collectively: (i) that certain Agreement, dated May 5, 1994, between Columbia and Schrödinger, Inc., subsequently assigned to Schrödinger by Consent, dated March 27, 2002; (ii) that certain Agreement, dated July 15, 1998, between Columbia and Schrödinger, Inc., subsequently assigned to Schrödinger by Consent, dated March 27, 2002; and (iii) that certain Agreement, dated September, 2001, between Columbia and Schrödinger, Inc., subsequently assigned to Schrödinger by Consent, dated March 27, 2002.

13.    The following provision shall be added as Section 5.d of the Agreement:

In the event Gross Revenues or Services Fees are paid to Schrödinger in the form of equity securities, Schrödinger may (in Schrödinger’s sole discretion) pay the relevant Software Royalty, New Module Royalty or Services Agreement Royalty either in cash (such cash payment to equal the product obtained by multiplying (i) the fair market value of the equity securities constituting such Gross Revenues or Services Fees by (ii) the percentage of the Gross Revenues or Services Fees owed by Schrödinger to Columbia hereunder as a Software Royalty, New Module Royalty or Services Agreement Royalty) or, to the extent permitted by law, by transferring to Columbia a portion of the equity securities received by Schrödinger in payment of the Gross Revenues or Services Fees, such portion to equal the percentage of the Gross Revenues or Services Fees owed by Schrödinger to Columbia hereunder as a Software Royalty, New Module Royalty or Services Agreement Royalty.

 

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14.    Section 7.c of the Agreement shall be modified such that the phrase “or software expert” is added following the phrase “independent certified public accountant.”

15.    Section 10.b of the Agreement shall be deleted and replaced with the following provision:

COLUMBIA MAKES NO REPRESENTATION OR WARRANTY, EITHER EXPRESS OR IMPLIED OF ANY KIND, INCLUDING AS TO MERCHANTABILITY OR TO THE ADEQUACY OR SUITABILITY OF THE COLUMBIA CODE, COLUMBIA IMPROVEMENTS OR UNASSIGNED IMPROVEMENTS, OR COLUMBIA NEW MODULE CODE FOR ANY PARTICULAR PURPOSE OR TO PRODUCE ANY PARTICULAR RESULT, EXCEPT AS EXPRESSLY STATED IN SECTION 2.d. HEREOF. EXCEPT FOR COLUMBIA’S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT, NEITHER COLUMBIA NOR ANY EMPLOYEE NOR AGENT OF COLUMBIA SHALL HAVE ANY LIABILITY TO SCHRÖDINGER OR ANY AFFILIATE, LICENSEE OR SUB-LICENSEE OF SCHRÖDINGER OR TO ANY OTHER PERSON ARISING OUT OF THE USE OF THE COLUMBIA CODE, COLUMBIA IMPROVEMENTS OR UNASSIGNED IMPROVEMENTS, OR COLUMBIA NEW MODULE CODE, WHETHER ALONE OR AS INCORPORATED IN THE SOFTWARE OR A NEW MODULE, BY SCHRÖDINGER OR ANY AFFILIATE, LICENSEE OR SUB-LICENSEE OF SCHRÖDINGER OR ANY OTHER PARTY FOR ANY REASON, INCLUDING BUT NOT LIMITED TO THE LACK OF MERCHANTABILITY OR INADEQUACY OR UNSUITABILITY OF THE COLUMBIA CODE, COLUMBIA IMPROVEMENTS OR UNASSIGNED IMPROVEMENTS, OR COLUMBIA NEW MODULE CODE FOR ANY PARTICULAR PURPOSE OR TO PRODUCE ANY PARTICULAR RESULT, OR FOR ANY LATENT DEFECTS THEREIN, OR FOR THE FAILURE OF COLUMBIA TO PROVIDE SCHRÖDINGER OR ANY AFFILIATE, LICENSEE OR SUB-LICENSEE OF SCHRÖDINGER OR ANY OTHER PERSON ANY CORRECTIONS IN THE COLUMBIA CODE, COLUMBIA IMPROVEMENTS OR UNASSIGNED IMPROVEMENTS, OR COLUMBIA NEW MODULE CODE.

16.    The following provision shall be added as Section 11.b of the Agreement:

Insurance.

i.    During the term of this Agreement and for a period of [**] following its termination, Schrödinger shall maintain comprehensive general liability insurance on a claims made basis, including product liability insurance, with reputable and financially secure insurance carriers reasonably acceptable to Columbia to cover the activities of Schrödinger, its Affiliates and its sublicensees, for minimum limits of $[**] combined single limit for bodily injury and property damage per occurrence and in the aggregate. Such insurance shall include Columbia and its trustees, directors, officers, employees, and agents as additional insureds. Schrödinger shall furnish a certificate of insurance evidencing such coverage, with [**] written notice to Columbia of cancellation or material change.

 

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ii.    Schrödinger’s insurance shall be primary coverage; any insurance Columbia may purchase shall be excess and noncontributory.

iii.    Schrödinger shall at all times comply with all statutory workers’ compensation and employers liability requirements covering its employees with respect to activities performed under this Agreement.

17.    Section 13.a of the Agreement shall be deleted and replaced with the following provision:

Columbia may terminate this Agreement and the licenses granted hereunder upon [**] written notice of Schrödinger’s material breach of the Agreement and Schrödinger’s failure to cure the specified breach within [**] of receipt of said notice. Schrödinger may terminate this Agreement upon [**] written notice of Columbia’s material breach of the Agreement and Columbia’s failure to cure the specified breach within [**] of receipt of said notice.

18.    Section 13.b of the Agreement shall be deleted and replaced with the following provision:

The following provisions shall survive termination of this Agreement: Sections 5, 6, 7, 11, 12, and 13; provided, however, that if Schrödinger terminates this Agreement pursuant to Section 13.a, Section 5 shall not survive termination of this Agreement.

19.    The following provision shall be added as Section 13.d of the Agreement:

Notwithstanding anything in this Agreement to the contrary, following any termination of this Agreement, to the extent Schrödinger has licensed, without any right to further sublicense, Software or New Modules to third parties pursuant to the rights granted in Section 2 herein, (i) such third parties shall retain perpetually the right to use such Software or New Modules as delivered by Schrödinger (notwithstanding the termination of this Agreement), (ii) Schrödinger shall have a perpetual right to continue providing support to such third parties in connection with their use of such Software or New Modules (notwithstanding the termination of this Agreement), and (iii) Schrödinger may, upon Columbia’s approval (which shall not be unreasonably withheld or delayed) use the Columbia Code, Columbia Improvements and Columbia New Module Code to provide services pursuant to a Services Agreement entered into prior to the effective date of termination.

 

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20.    Section 14.b of the Agreement shall be deleted and replaced with the following provision:

Assignment. This Agreement and the licenses granted hereunder shall be assignable by Schrödinger to (i) an Affiliate of Schrödinger, or (ii) an entity in connection with a reorganization, merger, consolidation, acquisition, or other restructuring involving all or substantially all of the voting securities and/or assets of Schrödinger. Except as otherwise set forth in the foregoing sentence, this Agreement and the licenses granted hereunder may not be assigned or transferred without the prior written consent of Columbia, which shall not be unreasonably withheld or delayed beyond [**] after submission to Columbia of a request for such consent, provided that in connection with such a request, the name of the proposed assignee and such additional information relating to the proposed assignee as Columbia may reasonably request shall also be submitted.

21.    The following provision shall be added as Section 14.e of the Agreement:

Force Majeure. Neither party shall be deemed in default hereunder, nor shall it hold the other party responsible for, any cessation, interruption or delay in the performance of its obligations hereunder due to earthquake, flood, fire, storm, natural disaster, act of God, war, act of terrorism, armed conflict, labor strike, lockout, or boycott, provided that the party relying upon this section (i) shall have given the other party written notice thereof promptly and, in any event, within [**] of discovery thereof and (ii) shall take all steps reasonably necessary under the circumstances to mitigate the effects of the force majeure event upon which such notice is based.

All other terms of the Agreement will remain unchanged. In the event of any inconsistency between this letter and the Agreement, this letter will control.

If the foregoing agrees with your understanding, kindly countersign both enclosed copies of this letter and return one copy to the attention of Alice L. Geene, Schrödinger’s Corporate Counsel, at the address above and by facsimile at (646) 366-9550.

 

Agreed and accepted:

 

THE TRUSTEES OF COLUMBIA UNIVERSITY IN THE CITY OF NEW YORK
By:		/s/ Michael J. Cleare, PhD.
Name:		Michael J. Cleare, PhD.
Title:		Executive Director Science & Technology Ventures

 

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