Exhibit 10.2


 


SETTLEMENT AGREEMENT


 


This Settlement Agreement (the “SETTLEMENT
AGREEMENT”) is entered into effective on January 27, 2010, by and between
Plaintiffs-Appellees ACACIA RESEARCH CORPORATION and COMBIMATRIX CORPORATION (“PLAINTIFFS”),
and Defendant-Appellant NATIONAL UNION FIRE INSURANCE COMPANY OF PITTSBURGH, PA
(“NATIONAL UNION”), with reference to the following facts:


 


R E C I T A L S


 


A.                                                                                                       Effective January 22, 1999, NATIONAL UNION issued to PLAINTIFFS its Directors,
Officers and Corporate Liability Insurance Policy, D & O  Gold No. 857-85-90. (hereinafter referred to as the “POLICY”).


 


B.                                                                                                       On November 28, 2000, Nanogen, Inc., sued CombiMatrix
Corporation and Dr. Donald D. Montgomery in United States District Court for
the Southern District of California as Case Number 00CV2369JM (RBB), which was
subsequently submitted as a Claim to NATIONAL UNION under the POLICY and
assigned Claim Number 297-011357 (hereinafter the “CLAIM”), and which lawsuit
was thereafter settled.


 


C.                                                                                                       On April 22, 2005, ACACIA RESEARCH CORPORATION filed its Complaint
against NATIONAL UNION in the Superior Court of the State of California for the
County of Orange. The case was subsequently removed by NATIONAL UNION to the
United States District Court for the Central District of California, Western
Division, and PLAINTIFFS thereafter prosecuted the action as Case Number SA CV
05-501 PSG (MLGx) (hereinafter referred to as the “ACTION”).


 


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D.                                                                                                            On May 22, 2008, the Court entered its Amended Judgment in the
ACTION in favor of PLAINTIFFS and against NATIONAL UNION (hereinafter referred
to as the “JUDGMENT”).


 


E.                                                                                                             On May 20, 2008, NATIONAL UNION filed its Notice of Appeal, which
appeal remains pending before the United States Court of Appeals for the Ninth
Circuit as Case Number 08-55834 (hereinafter referred to as the “APPEAL”).


 


F.                                                                                                              PLAINTIFFS and NATIONAL UNION are collectively referred to herein as the “PARTIES.”


 


G.                                                                                                            The PARTIES are now desirous of resolving their dispute, and to conclude
the ACTION.


 


AGREEMENT


 


WHEREFORE, in consideration of
the covenants, conditions, acknowledgments, representations, and promises set
forth herein, the adequacy and sufficiency of which consideration is hereby
expressly acknowledged by the Parties, it is agreed to, by and between the
PARTIES, as follows:


 


1.                                                                                                              Terms of Payment. No later than February 12,
2010, NATIONAL UNION shall pay to PLAINTIFFS the sum of Twenty-Five Million
Dollars ($25,000,000.00).


 


2.                                                                                                              Form of Payment. The PAYMENT of
$25,000,000.00 shall be made by NATIONAL UNION to PLAINTIFFS no later than February 12,
2010, by a wire transfer to the Corbett, Steelman & Specter Attorney
Client Trust Account, Account # 02 02 000287, Routing # (ABA #)
122243703, at Commerce National Bank, 4040 MacArthur Boulevard, Suite 100,
Newport Beach, CA 92660, (949) 474-1020.


 


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3.                                                                                                              Effect of Settlement on Judgment. NATIONAL UNION’s timely PAYMENT, as above,
shall fully satisfy NATIONAL UNION’s obligations to PLAINTIFFS under the POLICY
and under the JUDGMENT. Timely payment as set forth in Paragraphs 1 and 2 above
shall be treated as a material term of the SETTLEMENT AGREEMENT, and time shall
be treated as of the essence. The failure of NATIONAL UNION to make such payment
shall permit PLAINTIFFS to recover collection of the JUDGMENT in full. In the
event that NATIONAL UNION makes the PAYMENT set forth in Paragraph 1, above, in
full, by February 12, 2010, then PLAINTIFFS shall cause to be executed and
shall file a joint stipulated dismissal of the ACTION with prejudice, pursuant
to Federal Rule of Civil Procedure 41, no later than February 19,
2010. The PARTIES shall take all other actions necessary to ensure that the
Dismissal is entered by the Clerk of the United States District Court.


 


4.                                                                                                              Dismissal of Appeal with Prejudice. Upon the
execution and delivery of this SETTLEMENT AGREEMENT, NATIONAL UNION shall
immediately cause to be executed a “Joint Request for Dismissal (with
Prejudice)” of the APPEAL, and shall further cause such Dismissal to be filed
with the United States Court of Appeals for the Ninth Circuit no later than January 28,
2010. The PARTIES shall take all other actions necessary to ensure that the
Dismissal is entered by the Clerk of the United States Court of Appeals for the
Ninth Circuit. As part of the Joint Request for Dismissal, the PARTIES will
withdraw all requests for sanctions currently pending in the Ninth Circuit,
including but not limited to the motion that PLAINTIFFS filed with that Court
on January 14, 2009, as resolved in part in that Court’s order of March 16,
2009.


 


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5.                                                                                                              Further Action by the PARTIES. In addition to
executing this SETTLEMENT AGREEMENT, making the PAYMENT set forth above, and executing
and filing the Dismissals, each of the PARTIES further agrees to do all other
things necessary, if any, including, but not limited to, the execution of any
additional documents necessary to effectuate the intent and purposes of the
SETTLEMENT AGREEMENT, to cause entry of the above-referenced Dismissals, and so
as to cause the ACTION and the APPEAL to be dismissed with prejudice, upon the
occurrence of the conditions specified, and pursuant to the terms, set forth
herein.


 


6.                                                                                                              Mutual Releases.


 


a.              Release of NATIONAL UNION. PLAINTIFFS, on their own behalf and on
behalf of their officers, directors, parents, subsidiaries and affiliated
corporations, present and former agents, employees, independent contractors,
attorneys, predecessors, successors, and assigns, and each of them, and all of
those claiming by, through, under or in concert with it, or any of them, hereby
absolutely, forever and fully, generally and specifically release and discharge
NATIONAL UNION, and its present and former agents, employees, attorneys,
independent contractors, officers, directors, parents, subsidiaries and
affiliated corporations, predecessors, successors and assigns, and each of
them, from any and all claims, contentions, rights, debts, liabilities,
demands, accounts, accountings, reckonings, obligations, duties, promises,
costs, expenses (including but not limited to, attorneys’ fees), liens,
subrogation rights, indemnification rights, damages, losses, actions, and
causes of action, of any kind whatsoever, whether based upon contract, tort,
statute or any other legal or equitable theory of recovery, and whether fixed
or contingent, matured or unmatured, liquidated or unliquidated, known or unknown, suspected or unsuspected, which are based upon, arising out of,
or in any way related to, directly or indirectly, the POLICY, the ACTION, or
the CLAIM giving rise thereto.


 


4

















 


b.              Release of
PLAINTIFFS.
NATIONAL UNION, on its own behalf and on behalf of its officers, directors,
parents, subsidiaries and affiliated corporations, present and former agents,
employees, attorneys, predecessors, successors, and assigns, and each of them,
and all of those claiming by, through, under or in concert with it, or any of
them, hereby absolutely, forever and fully, generally and specifically release
and discharge PLAINTIFFS and their present and former agents, employees,
attorneys, independent contractors, officers, directors, parents, subsidiaries
and affiliated corporations, partners, joint venturers, attorneys,
predecessors, successors and assigns, and each of them, from any and all
claims, contentions, rights, debts, liabilities, demands, accounts,
accountings, reckonings, obligations, duties, promises, costs, expenses
(including but not limited to, attorneys’ fees), liens, subrogation rights,
indemnification rights, damages, losses, actions, and causes of action, of any
kind whatsoever, whether based upon contract, tort, statute or any other legal
or equitable theory of recovery, and whether fixed or contingent, matured or
unmatured, liquidated or unliquidated, known or unknown, suspected or
unsuspected, based upon, arising out of, or in any way related to, directly or
indirectly, the POLICY, the ACTION or the CLAIM giving rise thereto.


 


7.                                                                                                              Waiver of California Civil Code Section 1542. The PARTIES hereby waive any and all rights or benefits which they may
have with respect to their respective claims under Section 1542 of the
California Civil Code, which
provides that:


 


“A GENERAL RELEASE DOES NOT EXTEND
TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT
THE TIME OF EXECUTING THE RELEASE, KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED
HIS SETTLEMENT WITH THE DEBTOR.”


 


5

















 


The PARTIES hereby represent and warrant that they
understand the effect of this waiver and of Civil Code
Section 1542 and that they are represented and
have been fully advised of the effect of this general release by an attorney
licensed to practice law.


 


8.                                                                                                              Release of Unknown Claims. The PARTIES acknowledge
that they may hereafter discover claims and/or facts now unknown or
unsuspected, or in addition to, or different from, those which they now know or
believe to be true at present with respect to the POLICY or the ACTION.
Nevertheless, the PARTIES intend by the releases in this SETTLEMENT AGREEMENT
to release fully, finally, and forever all of their respective claims, whether
such claims are known or unknown, suspected or unsuspected, based upon the
POLICY or the ACTION.


 


9.                                                                                                              Releases Do Not Apply to SETTLEMENT AGREEMENT. The releases set forth
above are not intended to, and shall not, extend to, apply to or otherwise
release, excuse or discharge any rights, privileges, benefits, duties or
obligations of any of the PARTIES granted or existing by reason of, or
otherwise arising under, this SETTLEMENT AGREEMENT.


 


10.                                                                                                       Representations and Warranties Regarding Claims. The PARTIES represent
and warrant to each other that they: (a) are the lawful owners of
everything released hereunder; (b) have all necessary power and authority
to execute, deliver and perform this SETTLEMENT AGREEMENT, including any
necessary consent or approval from any person, and including the absence of any
duty or obligation that would prevent, or be put in breach or default by, such
Agreement; and (c) have not heretofore transferred or attempted to
transfer all or any part of any such thing in any manner whatsoever, including by
way of subrogation or operation of law. 


 


6

















 


The PARTIES agree to indemnify and hold harmless each
other with respect to any liability, cost, expense, or claim pertaining to or
arising from any assertion of any such obligation or transfer or lack of such
power or authority.


 


11.                                                                                                  Binding Effect. This SETTLEMENT AGREEMENT and all documents referred to herein, shall
bind and inure to the benefit of each of the PARTIES and their respective
successors. Except as expressly provided herein, this SETTLEMENT AGREEMENT is
not for the benefit of any person not: (a) a Party; (b) identified
as a beneficiary herein; or (c) identified
herein as a person or entity released hereby, and
is not intended to constitute a third party beneficiary contract. A person or
entity shall be deemed identified herein only if referenced by name (i.e., “John Jones”) or category (i.e., “successors,” “predecessors,” etc.).


 


12.                                                                                                  Assignment of Rights.  Concurrent with the execution of this
SETTLEMENT AGREEMENT by the PARTIES, PLAINTIFFS shall execute and deliver to
NATIONAL UNION an Assignment and Assumption Agreement (“Assignment Agreement”)
in the form attached hereto as Exhibit A, pursuant to which PLAINTIFFS
sell, transfer, assign, convey, and set over unto NATIONAL UNION, and its
affiliates, successors and assigns, on a quitclaim basis, all of their rights,
title, claims and interest in and to reimbursement and/or payment of any kind
under the Excess Liability Policy issued by Royal Insurance Company of America
to Acacia Research Corporation, policy number P SF001831 (the “Royal Excess
Policy”), and the Excess Liability Policy issued by Federal Insurance Company
to Acacia Research Corporation, policy number 8158-94-96 KCO (the “Federal
Excess Policy”) (jointly the “EXCESS CARRIERS”), with respect to the actions
and proceedings listed in the Recitals herein.


 


7

















 


NATIONAL UNION shall have all right, title and interest
including all claims, actions, causes of action and/or remedies that the
PLAINTIFFS have or may hereafter have against the Royal Insurance Company of
America under the Royal Excess Policy and against Federal Insurance Company
under the Federal Excess Policy, including, but not limited to, the right to
sue in the name of, or for the benefit of, PLAINTIFFS, subject to all defenses
and claims available to the EXCESS CARRIERS against PLAINTIFFS or NATIONAL
UNION. PLAINTIFFS hereby represent and warrant that, other than the Policies
issued by the EXCESS CARRIERS, there are no other or additional excess or other
policies pursuant to which PLATINFFS will seek recovery for the events and acts
which gave rise to the CLAIM, the ACTION, and/or this AGREEMENT. PLAINTIFFS
shall cooperate in all respects as may be reasonably requested by NATIONAL
UNION in providing any and all assistance and documentary evidence to NATIONAL
UNION, including, without limitation, attendance on reasonable notice and
without subpoena at examinations before trial and at a trial and the production
upon reasonable request by NATIONAL UNION of documents, in respect of their
claims, demands and causes of action that it has or may hereafter have against
the Royal Excess Policy and the Federal Excess Policy, at NATIONAL UNION’s
expense. PLAINTIFFS also covenant and agree that they have neither assigned,
nor expressly released nor expressly discharged the Royal Excess Policy or the
Federal Excess Policy. By this assignment, PLAINTIFFS do not make any
representation regarding the validity of such claims, and NATIONAL UNION shall
bear the sole risk, responsibility and cost in prosecuting such claims,
including the possibility that such claims may be unsuccessful or without merit
or subject to defenses or setoffs. This Assignment shall be governed by and
construed in accordance with the laws of the State of California.


 


8

















 


13.                                                                                                       No Precedential Value. This
SETTLEMENT AGREEMENT is a compromise under the unique circumstances presented
herein, and shall have no precedential value with respect to any other claim
which has been or may be submitted for coverage under any policy of insurance
issued by NATIONAL UNION or any other member company of American International
Group.


 


14.                                                                                                       Final Integrated Agreement. This
SETTLEMENT AGREEMENT and the documents referred to herein constitute the
entire, final and binding understanding between the PARTIES. There are no other
statements or representations, written or oral, express or implied, which have
been made or received and relied upon in entering into this SETTLEMENT
AGREEMENT; and all prior discussions, statements, and negotiations which have
occurred prior to the Effective Date of this SETTLEMENT AGREEMENT shall be
deemed superseded by and merged into this SETTLEMENT AGREEMENT, and shall not
be used for any purpose whatsoever.


 


15.                                                                                                       Understanding of Settlement; Voluntary Agreement. Each of the PARTIES understands and agrees to this settlement, this
SETTLEMENT AGREEMENT, and the other terms and conditions contained herein, and
in the other documents referred to herein, and has relied upon its own
judgment, belief, knowledge, understanding and expertise after careful
consultation with its own legal counsel concerning the legal effect of this
settlement and all of the terms of this SETTLEMENT AGREEMENT. Each of the
PARTIES enters into this SETTLEMENT AGREEMENT, and the other terms and
conditions contained herein, and the other documents referred to herein,
knowingly and voluntarily, in the total absence of any fraud, mistake, duress,
coercion, or undue influence and after careful thought and reflection about
this SETTLEMENT AGREEMENT, and the terms and conditions contained
herein, and the other documents referred to herein and, accordingly, by signing
this SETTLEMENT AGREEMENT, and the Dismissal, each Party hereto signifies full
understanding, agreement and acceptance thereof. 


 


9

















 


Each of the PARTIES has fully and completely investigated
the facts pertaining to this settlement, SETTLEMENT AGREEMENT and all matters
pertaining thereto as deemed necessary by each.


 


16.                                                                                                       Disclosure of Terms. The
PARTIES agree that the terms of this SETTLEMENT AGREEMENT, and all negotiations
leading up to this AGREEMENT, will be considered confidential. Unless required
to make disclosure pursuant to the order of a court or other government
authority of competent jurisdiction, the PARTIES will not disclose any of the
terms or negotiations to anyone other than as necessary to their directors,
officers, employees, attorneys, accountants, auditors, regulators, underwriters,
governmental or administrative agencies, and/or reinsurers, or as required by
regulation or law governing the mandatory disclosure by publicly traded
companies, or the contents and disclosure of financial statements. Before
making disclosure of the SETTLEMENT AGREEMENT in litigation, including but not
limited to the fact of the SETTLEMENT AGREEMENT or its terms, the Party seeking
to make disclosure will make a good faith effort to have a protective order
entered governing any such disclosure. Notwithstanding the foregoing, if any
shareholder initiates communications with PLAINTIFFS concerning the settlement,
PLAINTIFFS may privately disclose the amount of the settlement, but not the
identity of the payor or any other information concerning the settlement, its
terms, or this SETTLEMENT AGREEMENT.


 


10
















 


17.                                                                                                       Costs Associated with ACTION. The PARTIES expressly agree
that they shall each be liable and responsible hereafter for their own
attorneys’ fees, costs and expenses incurred in connection with the ACTION, the
negotiation and execution of the SETTLEMENT AGREEMENT and this settlement, and
shall and do waive any right to seek recovery thereof from any other Party
hereto.


 


18.                                                                                                       Ambiguities or Uncertainties. This
SETTLEMENT AGREEMENT, and any ambiguities or uncertainties herein, shall be
equally and fairly interpreted and construed without reference to the identity
of the Party or Parties preparing this document on the express understanding
and agreement that the PARTIES participated equally in the negotiation and
preparation of this SETTLEMENT AGREEMENT, or that each of the PARTIES have had
equal opportunity to do so. Accordingly, the PARTIES hereby waive the benefit
of California Civil Code Section 1654,
and any successor or amended statute, providing that in cases of uncertainty,
the language of a contract should be interpreted most strongly against the
Party who caused the uncertainty to exist.


 


19.                                                                                                       Survival of Executory Provisions. Any and all
executory provisions of this SETTLEMENT AGREEMENT and the documents referred to
herein shall survive the consummation of this settlement and shall continue in
full force and effect until fully performed and satisfied.


 


20.                                                                                                       California Law. This
settlement and SETTLEMENT AGREEMENT shall be governed by, and construed and
interpreted in accordance with, the laws of the State of California, and any
action relating hereto shall be filed in the Federal Court for the Central
District of the State of California.


 


11

















 


21.                                                                                                       Severability. In the event
that any provision(s) of this SETTLEMENT AGREEMENT as applied to any of
the PARTIES or to any circumstance should be adjudged by a court of competent
jurisdiction to be void, voidable, invalid or unenforceable, such provision
shall be deemed severed from this SETTLEMENT AGREEMENT and the remaining
portions hereof shall remain in full force and effect as if the invalid or
unenforceable provision(s) had not been a part of this SETTLEMENT
AGREEMENT.


 


22.                                                                                                       Waiver, Modification and Amendment. No breach of
this SETTLEMENT AGREEMENT, or of any provision herein, can be waived except by
an express written waiver executed by the Party waiving such breach. Waiver of
any one breach shall not be deemed a waiver of any other breach of the same or
other provisions of this SETTLEMENT AGREEMENT. This SETTLEMENT AGREEMENT may be
amended, altered, modified or otherwise changed in any respect or particular
only by a writing duly executed by each of the PARTIES or their authorized
representatives.


 


23.                                                                                                       Multiple Counterparts. This
SETTLEMENT AGREEMENT, and any document referred to herein, may be executed in
any number of counterparts, each of which may be deemed an original and all of
which together shall constitute a single instrument.


 


24.                                                                                                       Telefacsimile Signatures. This
SETTLEMENT AGREEMENT, and any document referred to herein and relating to it
may be executed and transmitted to any of the PARTIES by telefacsimile, which
telefacsimile shall be deemed to be, and may be utilized in all respects as, an
original document for all purposes.


 


25.                                                                                                       Captions. Sections,
paragraphs and other captions or headings contained in this SETTLEMENT
AGREEMENT are inserted as a matter of convenience and for reference, and in no way
define, limit, extend or otherwise describe the scope or intent of this
SETTLEMENT AGREEMENT or any provision hereof and shall not affect in any way
the meaning or interpretation of this SETTLEMENT AGREEMENT.


 


12

















 


26.                                                                                                       Recitals. The Recitals
set forth at the beginning of this SETTLEMENT AGREEMENT shall not be admissible to
prove the truth of the matters asserted therein in any action or proceeding
involving any of the PARTIES (other than an action or proceeding brought to
enforce the terms of this SETTLEMENT AGREEMENT), nor do any of the PARTIES
intend such Recitals to constitute admissions of fact by any of them.


 


27.                                                                                                       Miscellaneous. In the
language of this document and the documents referred to herein, singular and
plural numbers, and masculine, feminine and neuter genders, shall be deemed to
include all others, and the word “person” shall include corporations,
partnerships and every other entity, as the context may require.


 


28.                                                                                                       Effective Date. The term “Effective
Date” shall mean and refer to January 27, 2010, and this SETTLEMENT
AGREEMENT shall be effective as of such date.


 


IN WITNESS WHEREOF, the PARTIES
evidence their agreement, consent and acceptance of this SETTLEMENT AGREEMENT
by executing this SETTLEMENT AGREEMENT in the spaces provided below:


 


 


	
  DATED:
  January 27, 2010

  	
  ACACIA RESEARCH CORPORATION, a

  
	
   

  	
  Delaware
  Corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Robert L. Harris

  
	
   

  	
   

  	
  Robert
  L. Harris

  
	
   

  	
  Title:

  	
  President

  



 


13

















 


	
  DATED: January 27, 2010

  	
  COMBIMATRIXCORPORATION, 

  
	
   

  	
  a Delaware Corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Amit Kumar

  
	
   

  	
   

  	
  Amit Kumar

  
	
   

  	
  Title:

  	
  President

  
	
   

  	
   

  
	
   

  	
   

  
	
  DATED: January 27, 2010

  	
  CHARTIS
  CLAIMS, INC., on behalf of NATIONAL UNION FIRE INSURANCE COMPANY OF
  PITTSBURGH, PA,

  
	
   

  	
  a Pennsylvania insurance company

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Lauren Levy

  
	
   

  	
   

  	
  Lauren Levy

  
	
   

  	
  Title:

  	
  Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  APPROVED AS TO FORM AND CONTENT:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  CORBETT, STEELMAN & SPECTER

  	
  SIDLEY
  AUSTIN LLP

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ Richard B. Specter

  	
   

  	
  By:

  	
  /s/
  Eric A. Shumsky

  
	
   

  	
   

  	
   

  	
   

  	
  Eric
  A. Shumsky

  
	
   

  	
  Richard
  B. Specter

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Attorneys
  for PLAINTIFFS

  	
  Attorneys
  for NATIONAL UNION

  
						



 


14

















 


EXHIBIT A


 


ASSIGNMENT AND ASSUMPTION AGREEMENT


 


The undersigned, ACACIA RESEARCH CORPORATION AND
COMBIMATRIX CORPORATION (“Assignors”), hereby assign, transfer, sell, convey,
and set over unto NATIONAL UNION FIRE INSURANCE COMPANY OF PITTSBURGH,
PENNSYLVANIA (“Assignee”), on a quitclaim basis, for good and valuable
consideration, receipt of which is hereby acknowledged by Assignors, all of
Assignors’ rights, title, claims, and interest in and to reimbursement and/or
payment of any kind under the Excess Liability Policy issued by Royal Insurance
Company of America to Acacia Research Corporation, policy number P SF00183, and
the Excess Liability Policy issued by Federal Insurance Company to Acacia
Research Corporation, policy number 8158-94-96 KCO, (collectively the “Excess
Policies”), subject to the terms and conditions of this Assignment Agreement;
and the Assignee hereby also agrees as follows:


 


1.                                      In
consideration of Assignee’s agreements contained herein, the Assignors, subject
to paragraph 3(A) hereof, hereby assign to Assignee all of their legal
rights under the Excess Policies to recover reimbursement of legal fees, costs,
and expenses incurred by Assignors, together with any bad faith refusal to
defend claims, and, subject to paragraph 3(B) hereof, hereby assigns to
Assignee all of their legal rights under the Excess Policies to recover
indemnity for any judgment or settlement in any of the Actions and Proceedings
that are the subject of that certain Settlement Agreement (“Settlement
Agreement”) executed by the parties dated January 27, 2010 (the “Assignment”),
under the Excess Policies, with respect to those claims submitted under the
policy issued by Assignee to Acacia Research Corporation (the “Policy”) for
certain legal proceedings that are the subject of the Settlement Agreement.


 


1

















 


2.                                      The Assignors
shall execute all papers required and do everything that may be reasonably
necessary to secure Assignee’s rights pursuant to this Assignment Agreement,
including the execution of such documents as reasonably requested by Assignee
to maintain a declaratory judgment action under the Excess Policies in place,
and instead, of Assignors. In the event Assignee opts to pursue declaratory
relief actions, Assignee shall have no obligation to pay the wages of any
employee of Assignors that may be required to provide deposition or trial
testimony in connection with such action. In the event that any of Assignors’
employees requests legal counsel for deposition or trial, in any action
commenced by Assignee pursuant to this Assignment Agreement, Assignee’s choice
of counsel will represent such employee(s) and Assignee will pay such
counsel’s legal fees, costs, and expenses.


 


3.                                      (A) Actions for
Recovery of Defense Costs. By entering into this
Assignment Agreement, Assignee is not obligated to bring a declaratory judgment
action or any claim under the Excess Policies. Even if Assignee decides not to
institute any such litigation for the recovery of attorneys’ fees, costs,
expenses, or bad faith refusal to defend claims, Assignors agree that, in
accordance with the terms of this Assignment Agreement, they hereby waive the
right to and cannot file any such an action against their insurance carriers.


 


In the event Assignee decides to commence litigation
under either of the Excess Policies to seek reimbursement of attorneys’ fees,
costs, expenses, or bad faith penalties resulting from a duty to defend,
Assignee shall have the sole discretion to settle such claims. To the extent
Assignee obtains a recovery of legal fees, costs, expenses, or bad faith
recovery arising from a refusal to defend, under the Excess Policies„ by
declaratory judgment or otherwise, the Assignors acknowledge and agree that
they have relinquished any and all rights to such recovery to Assignee pursuant
to this Assignment Agreement.


 


2

















 


(B) Actions for Recovery of Indemnity.
Assignors assign to Assignee all rights they may have under the Excess Policies
with respect to any settlement or judgment against Assignors, or any of them,
in any of the actions or proceedings which are the subject of the Settlement
Agreement. Even if Assignee decides not to institute any such litigation for
recovery of indemnity, Assignors agree that, in accordance with the terms of
this Assignment Agreement, they hereby waive the right to and cannot file any
such an action against their insurance carriers. To the extent Assignee obtains
a recovery of indemnity, under the Excess Policies, by declaratory judgment or
otherwise, the Assignors acknowledge and agree that they have relinquished any
and all rights to such recovery to Assignee pursuant to this Assignment
Agreement.


 


4.                                      By this assignment,
Assignors do not make any representation regarding the validity of claims under
the Excess Policies and Assignee shall bear the sole risk, responsibility and
cost in prosecuting such claims, including the possibility that such claims may
be unsuccessful or without merit or subject to defense or setoff.


 


5.                                      Assignors agree
to cooperate with Assignee in the commencement and prosecution of a declaratory
judgment action under the Excess Policies, at Assignee’s sole expense. Assignee
will provide Assignors with copies of all pleadings filed in connection with
such declaratory judgment action, and the Assignors may associate with Assignee
in prosecution of the declaration judgment action to the extent that issues
raised therein may affect the reputation or day-to-day business of Assignors. 


 


3

















 


Assignee
agrees to refrain from taking any action which would be contrary to any
confidentiality agreement between the parties or any protective or other court
order in the actions and proceedings that are the subject of the Settlement
Agreement, if any.


 


6.                                      PLAINTIFFS
hereby represent and warrant that, other than the Policies issued by the EXCESS
CARRIERS, there are no other or additional excess or other policies pursuant to
which PLATINFFS will seek recovery for the events and acts which gave rise to
the CLAIM, the ACTION, and/or this AGREEMENT.


 


7.                                      In the event
that a difference of opinion arises between Assignors and Assignee as to any
matters omitted from this Assignment Agreement, the parties agree to use their
best efforts to reach a mutually acceptable resolution.


 


8.                                      No failure on
the part of Assignee to exercise, and no delay in exercising, any of its rights
under this Assignment Agreement shall be construed or deemed to be a waiver
thereof.


 


9.                                      Assignors and
Assignee agree that this Assignment Agreement shall not constitute, nor be
construed as: (I) an admission by Assignee of any liability for or with
respect to the actions and proceedings that are the subject of the Settlement
Agreement; (II) an admission by Assignee that it has any liability for the
actions or proceedings under the Policy; and/or (III) a waiver by
Assignors or Assignee of any of their respective rights, privileges, and
defenses under the Policy, at law or in equity, and all such rights are
mutually reserved.


 


10.                               If any part or
parts of this Assignment Agreement are determined to be null and void, the
remainder of the Assignment Agreement shall be given full force and effect.


 


4

















 


11.                               This Assignment
Agreement shall not be construed as a waiver by Assignors or Assignees of any
of their rights, privileges, and/or defenses, under the Policy, at law, and in
equity, with respect to any monies paid in satisfaction of the settlement that
is the subject of the Settlement Agreement.


 


12.                               This Assignment
Agreement inures to the benefit of Assignee, its successors and assigns
forever.


 


13.                               The parties
further agree that this Agreement does not in any way resolve any indemnity
issues under the Excess Policies, or any of them, arising from the actions and
proceedings that are the subject of the Settlement Agreement.


 


14.                               This Agreement
may be executed in any number of counterparts, each of which when executed and
delivered shall be deemed an original, but which together shall constitute one
instrument. Delivery of executed signature pages hereof by facsimile
transmission shall constitute effective and binding execution and delivery of
this Agreement.


 


5

















 


IN WITNESS WHEREOF, Assignors and Assignee have duly
executed this Agreement as of this 27th day of January 2010.


 


ASSIGNOR
ACACIA RESEARCH CORPORATION:


 


	
  DATED:
  January 27, 2010

  	
  ACACIA RESEARCH CORPORATION, a

  
	
   

  	
  Delaware
  Corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Robert L. Harris, II

  
	
   

  	
   

  	
  Robert
  L. Harris, II

  
	
   

  	
  Title:

  	
  President

  
	
   

  	
   

  
	
   

  	
   

  
	
  ASSIGNOR
  COMBIMATRIX CORPORATION:

  	
   

  
	
   

  	
   

  
	
  DATED:
  January 27, 2010

  	
  COMBIMATRIX CORPORATION, a

  
	
   

  	
  Delaware
  Corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Amit Kumar

  
	
   

  	
   

  	
  Amit
  Kumar

  
	
   

  	
  Title:

  	
  President

  
	
   

  	
   

  	
   

  
	
   

  
	
  ASSIGNEE NATIONAL UNION
  FIRE INSURANCE COMPANY OF PITTSBURGH, PENNSYLVANIA:

  
	
   

  	
   

  
	
  DATED:
  January 27, 2010

  	
  CHARTIS CLAIMS, INC., on behalf of NATIONAL UNION FIRE
  INSURANCE COMPANY OF PITTSBURGH, PA,

  
	
   

  	
  a
  Pennsylvania insurance company

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Lauren Levy

  
	
   

  	
   

  	
  Lauren
  Levy

  
	
   

  	
  Title:

  	
  Vice
  President

  
					



 


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