Document:

Exhibit 10.1

 

EMPLOYMENT AGREEMENT

 

THIS EMPLOYMENT
AGREEMENT (the “Agreement”), dated June 19, 2020, is entered into by and between Acacia Research Group LLC,
a Texas limited liability company (the “Company”), and Marc Booth (“Executive”), on the following
terms and conditions.

 

BACKGROUND

 

WHEREAS,
the Company and Executive desire to enter into this Agreement, subject to the terms and conditions as set forth below.

 

NOW,
THEREFORE, in consideration of the foregoing and the mutual covenants set forth herein, the Company and Executive, intending
to be legally bound, hereby agree as follows:

 

1.       Definitions.
For purposes of this Agreement, the following terms shall have the following meanings:

 

a.                  
“ARC” shall mean Acacia Research Corporation, a Delaware corporation.

 

b.                 
“Board” shall mean the Board of Directors of ARC.

 

2.       Position and Responsibilities. Executive
shall be employed and serve as Chief IP Officer of the Company. Executive agrees that, at all times during his employment hereunder,
Executive shall be subject to and comply with the Company’s personnel rules, policies and procedures, including but not
limited to ARC’s and the Company’s Insider Trading Policy (attached hereto as Exhibit A), Sexual Harassment
Policy (attached hereto as Exhibit B), Executive Handbook (which has been provided to Executive) and Executive Officer
Stock Ownership Guidelines (attached hereto as Exhibit C), in each case, as may be modified from time to time. Executive
shall devote his full working time and efforts to the Company’s business to the exclusion of all other employment or active
participation in other business interests, unless otherwise consented to in writing by the Company. This shall not preclude Executive
from (a) devoting time to personal and family endeavors or investments, (b) serving on community and civic boards, (c) participating
in industry or trade associations, or (d) serving on a board of a public or private company that does not directly compete with
the Company; provided, that (x) such activities do not materially interfere with Executive’s duties to the Company
or create a conflict of interest, and (y) the Board shall approve Executive’s service on any board of directors.

 

3.       Employment. Executive’s employment
with the Company may be terminated by the Company or Executive upon thirty (30) days’ written notice to the other party,
for any reason. This arrangement may not be changed during Executive’s employment, unless agreed to in writing by the Compensation
Committee of the Board (the “Compensation Committee”).

 

4.       Compensation. For all services rendered
by Executive pursuant to this Agreement, the Company shall pay Executive, subject to his adherence to all of the terms of this
Agreement, and Executive shall accept as full compensation hereunder, the following:

 

 

 

 

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a.                 
Salary.
The Company shall pay Executive an annual salary (the “Base Salary”) of $425,000. The Base Salary shall be
subject to all appropriate federal and state withholding taxes and shall be payable bi-weekly, in accordance with the normal payroll
procedures of the Company. The Base Salary shall be subject to an annual review by the Compensation Committee and, without limiting
the generality of the foregoing, it is expressly contemplated that the Base Salary shall be reduced as Executive participates
in any capital interest or similar plan or program adopted by the Company or its affiliates. In the event of an adjustment to
the Base Salary, the term “Base Salary” shall refer to the adjusted amount.

 

b.                 
Annual Bonus. Executive shall be eligible for annual cash incentive compensation (the “Annual Bonus”)
ranging from 25-75% of Base Salary as shall be determined by the Board in accordance with annual performance objectives established
by the Board on an annual basis. The Annual Bonus, if any, shall be paid to Executive in the same manner and at the same time that
other senior-level executives of the Company receive their annual bonus awards, as determined by the Board or the Compensation
Committee. In order to be eligible for an Annual Bonus, Executive must be in good standing with the Company. The Annual Bonus shall
be subject to all appropriate federal and state withholding taxes.

 

c.                  
Benefits and Perquisites. The Company shall make benefits available to Executive, including, but not limited to,
vacation and holidays, sick leave, health insurance, and the like, to the extent and on the terms made available to other similarly
situated employees of the Company. This provision does not alter the Company’s right to modify or eliminate any employee
benefit and does not guarantee the continuation of any kind or level of benefits. All such benefits shall cease upon the termination
of Executive’s employment under this Agreement.

 

d.                 
Expenses; Travel. The Company shall reimburse Executive for all reasonable out-of-pocket business and travel expenses
incurred in connection with the performance of Executive’s duties or professional activities on behalf of the Company in
accordance with the Company’s reimbursement policies.

 

5.       Confidentiality.

 

a.                  Confidential
Information. The Company and Executive recognize that Executive will acquire certain confidential and proprietary
information relating to the Company’s business and the business of the Company’s affiliates. Such confidential
and proprietary information is information that derives independent economic value, actual or potential, from not being
generally known to the public or to other persons who can obtain economic value from its disclosure or use, and is the
subject of efforts that are reasonable under the circumstances to maintain its secrecy (“Confidential
Information”). Confidential Information may include, without limitation, the following: business plans,
projections, planning and strategies, marketing plans, materials, pricing, programs and related data, product information,
services, budgets, acquisition plans, the names or addresses of any employees, independent contractors or customers,
licensing strategy, statistical data, financial information or arrangements, manuals, forms, techniques, know-how, trade
secrets, software, any method or procedure of the Company’s business, whether developed by the Company or developed, or
contributed to, by Executive during the course of Executive’s employment, or made available to Executive by the Company
or any of the Company’s affiliates in the course of Executive’s employment, or any market development, research
or expansion projects, business systems and procedures and other confidential business and proprietary information.
Confidential Information may be contained in written materials, verbal communications, the unwritten knowledge of employees,
or any other tangible medium, such as tape, computer, or other means of electronic storage of information.

 

 

 

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b.       Obligation
of Confidentiality. Executive acknowledges and agrees that all of the Confidential Information constitutes special, unique
and valuable assets of the Company and trade secrets, the disclosure of which would cause irreparable harm and substantial loss
to the Company and its affiliates. In view of the foregoing, Executive agrees that at no time will Executive, directly or indirectly,
and whether during or after his or her employment with the Company, use, reveal, disclose or make known any Confidential Information
without specific written authorization from or written direction by the Company. Executive further agrees that, immediately upon
termination or expiration of his or her employment for any reason whatsoever, or at any time upon request by the Company, Executive
will return to the Company all Confidential Information. Notwithstanding the foregoing, any restriction on Executive’s use,
disclosure, or conveyance of Confidential Information shall not apply to (i) any Confidential Information that enters the public
domain through no fault of Executive’s or any person affiliated with Executive; (ii) any Confidential Information that Executive
is required to disclose pursuant to applicable law or legal process, an order of a court of competent jurisdiction or a government
agency having appropriate authority, solely to the extent necessary to comply with such order; and (iii) any use or disclosure,
during the course of Executive’s service with the Company of Confidential Information made necessary by the proper conduct
of the business of the Company and consistent with the instructions of the Company. Nothing herein shall prohibit Executive from
providing information in connection with: (a) any disclosure of information required by law or legal process; (b) reporting possible
violations of federal or state law or regulation to any governmental agency, commission or entity or self-regulatory organization
(collectively “Government Agencies”) (c) filing a charge or complaint with Government Agencies; (d) making disclosures
that are protected under the whistleblower provisions of federal or state law or regulation (collectively the “Whistleblower
Statutes”); or (e) from responding to any inquiry from, or assisting in any inquiry, investigation or proceeding brought
by Government Agencies in connection with (a) through (e).

 

6.       Intellectual
Property. Executive agrees that any and all discoveries, concepts, ideas, inventions, writings, plans, articles, devices,
products, designs, treatments, structures, processes, methods, formulae, techniques and drawings, and improvements or
modifications related to the foregoing that are in any way related to the Company’s patent portfolios or any other
intellectual property owned by the Company or its affiliates, whether patentable, copyrightable or not, which are made,
developed, created, contributed to, reduced to practice, or conceived by Executive, whether solely or jointly with others, in
connection with Executive’s employment with the Company (collectively, the “Intellectual Property”)
shall be and remain the exclusive property of the Company, and, to the extent applicable, a “work made for hire,”
and the Company shall own all rights, title and interests thereto, including, without limitation, all rights under copyright,
patent, trademark, statutory, common law and/or otherwise. By Executive’s execution of this Agreement, Executive hereby
irrevocably and unconditionally assigns to the Company all right, title and interest in any such Intellectual Property.
Executive further agrees to take all such steps and all further action as the Company may reasonably request to effectuate
the foregoing, including, without limitation, the execution and delivery of such documents and applications as the Company
may reasonably request to secure the rights to Intellectual Property worldwide by patent, copyright or otherwise to the
Company or its successors and assigns. Executive further agrees promptly and fully to disclose any Intellectual Property to
the officers of the Company and to deliver to such officers all papers, drawings, models, data and other material
(collectively, the “Material”) relating to any Intellectual Property made, reduced to practice, developed,
created or contributed to by Executive and, upon termination, or expiration of his or her employment with the Company, to
turn over to the Company all such Material. Any intellectual property which was developed by Executive prior to
Executive’s first date of employment with the Company, or which is developed by Executive during or after the
termination of this Agreement and is not in any way related to any of the Company’s or any of its affiliates’
intellectual property, shall be owned by Executive.

 

 

 

 

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7.       Covenants.

 

a.               
Exclusive
Service; Non-Solicitation. During the term of Executive’s employment, Executive agrees not to perform services for any
other entity, group or individual if such service would be in conflict with or interfere in any way with the Company’s business
interests (as reasonably determined by the Company). During the term of Executive’s employment and for a period of eighteen
(18) months after termination of Executive’s employment for any reason, Executive shall not (a) solicit for employment and
then employ any employee of the Company or any of its affiliates or any person who is an independent contractor involved with
the Company or any of its affiliates (or any person who was during the prior six months an employee or independent contractor
of the Company or any of its affiliates), (b) pursue or otherwise solicit any Customer or Investment Opportunity of the Company
or any of its affiliates, or (c) induce, attempt to induce or knowingly encourage any Customer or Investment Opportunity of the
Company or any of its affiliates to divert any business or income from the Company or any of its affiliates or to stop or alter
the manner in which they are then doing business with the Company or any of its affiliates. In addition, in the event of the termination
of Executive’s employment for any reason, Executive, for a period of two years following Executive’s termination of
employment for any reason, will not serve as a director, officer, employee or consultant to any public company engaged in the
business of acting as a patent assertion entity (“PAE”); provided that (i) Executive may be employed by or provide
services to an affiliated group that has a business unit that acts as a PAE, which business unit comprises no more than fifteen
percent (15%) of such affiliated group’s overall business as measured by revenue, provided that Executive does not provide
any direct services to the business unit (for the avoidance of doubt, it shall not be a violation of this Agreement for Executive
to render services to a different business unit or to serve the parent of such business unit), and comply with Executive’s
obligations with respect to the Company’s Confidential Information and (ii) Executive may become employed by or provide
services to any private equity fund, hedge fund, or other similar investment vehicle that invests in or holds a position in a
public entity that acts as a PAE, provided that Executive’s services to such investment vehicle or its managers or advisors
do not involve investment or management decisions with respect to any of such investment vehicle’s public portfolio companies
engaged as PAEs and Executive does not use any of the Company’s Confidential Information. The term “Customer”
shall mean any individual or business firm that was or is a customer or client of, or one that was or is a party in an investor
agreement with, or whose business was actively solicited by, the Company or any of its affiliates at any time, regardless of whether
such customer was generated, in whole or in part, by Executive’s efforts. The term “Investment Opportunity”
means any opportunity in which the Company or any of its affiliates or subsidiaries at any time sought to invest, regardless of
whether such opportunity was generated, in whole or in part, by Executive’s efforts.

 

b.               
Return of the Company’s Property. Upon the termination of Executive’s employment in any manner, Executive
shall immediately surrender to the Company all lists, books and records of, or in connection with, the Company’s business,
and all other property belonging to the Company.

 

c.               
Cooperation. During the term of this Agreement and thereafter, Executive agrees to cooperate with the Company and
its affiliates, agents, accountants and attorneys concerning any matter with which Executive was involved during Executive’s
employment. Such cooperation shall include, but not be limited to, providing information to, meeting with and reviewing documents
provided by the Company and its affiliates, agents, accountants and attorneys during normal business hours or other mutually agreeable
hours upon reasonable notice and being available for depositions and hearings, if necessary and upon reasonable notice. If Executive’s
cooperation is required after the termination of Executive’s employment, the Company shall reimburse Executive for any reasonable
out of pocket expenses incurred in performing Executive’s obligations hereunder.

 

d.               
Non-Disparagement. During the term of this Agreement and thereafter, Executive shall not make any statements (whether
written, electronic or oral) that disparage, denigrate, malign or criticize the Company or any of its affiliates, businesses,
products, directors, officers or employees. Notwithstanding the foregoing, in no event shall the provisions of this Section 7(d)
prohibit Executive from making truthful statements to the extent required by law or legal process.

 

 

 

 

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8.       General
Provisions.

 

a.               
Successors and Assigns. The rights of the Company under this Agreement may, without the consent of Executive, be
assigned by the Company, in its sole and unfettered discretion, to any person, firm, corporation or other business entity that
at any time, whether by purchase, merger or otherwise, directly or indirectly, acquires all or substantially all of the assets
or business of the Company. The Company will require any successor (whether direct or indirect, by purchase, merger or otherwise)
to all or substantially all of the business or assets of the Company expressly to assume and to agree to perform this Agreement
in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place;
provided, however, that no such assumption shall relieve the Company of its obligations hereunder. As used in this
Agreement, the “Company” shall mean the Company as hereinbefore defined and any successor to its business and/or
assets as aforesaid that assumes and agrees to perform this Agreement by operation of law or otherwise. Executive shall not be
entitled to assign any of Executive’s rights or obligations under this Agreement. This Agreement shall inure to the benefit
of and be enforceable by Executive’s personal or legal representatives, executors, administrators, successors, heirs, distributees,
devisees and legatees. If Executive should die while any amount is at such time payable to Executive hereunder, all such amounts,
unless otherwise provided herein, shall be paid in accordance with the terms of this Agreement to Executive’s devisee, legatee,
or other designee or, if there be no such designee, to Executive’s estate.

 

b.                 Remedies.
Each of the parties to this Agreement will be entitled to enforce its rights under this Agreement specifically, to recover
damages by reason of any breach of any provision of this Agreement and to exercise all other rights existing in its favor.
The parties agree and acknowledge that money damages may not be an adequate remedy for any breach of the provisions of this
Agreement and that any party may in its sole discretion apply to any court of law or equity of competent jurisdiction for
injunctive relief without the need for an undertaking in order to enforce or prevent any violations of the provisions of this
Agreement.

 

c.                  
Severability and Reformation. The parties intend all provisions of this Agreement to be enforced to the fullest extent
permitted by law. If, however, any provision of this Agreement is held to be illegal, invalid, or unenforceable under present or
future law, such provision shall be fully severable, and this Agreement shall be construed and enforced as if such illegal, invalid,
or unenforceable provision were never a part hereof and the remaining provisions shall remain in full force and effect. Moreover,
any provision so affected shall be limited only to the extent necessary to bring the Agreement within the applicable requirements
of law.

 

d.                 
Governing Law and Venue. This Agreement is to be governed by and construed in accordance with the laws of the State
of New York applicable to contracts made and to be performed wholly within such State, and without regard to the conflicts of laws
principles thereof. Any suit brought and any and all legal proceedings to enforce this Agreement whether in contract, tort, equity
or otherwise, shall be brought in the state or federal courts sitting in Manhattan, New York, the parties hereto hereby waiving
any claim or defense that such forum is not convenient.

 

e.                  
Arbitration of Disputes.

 

(a)              
Agreement to Arbitrate. The parties hereby agree that any and all disputes, claims or controversies arising out of or
relating to this Agreement, the employment relationship between the parties, or the termination of the employment relationship,
that are not resolved by their mutual agreement shall be resolved by final and binding arbitration by a neutral arbitrator. This
agreement to arbitrate includes any claims that the Company may have against Executive, or that Executive may have against the
Company and any of its affiliates or its or their officers, directors, employees, agents and representatives.

 

 

 

 

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(b)              
Covered Claims. The claims covered by this agreement to arbitrate include, but are not limited to, claims for: wrongful
termination; breach of any contract or covenant, express or implied; breach of any duty owed to Executive by the Company or to
the Company by Executive; personal, physical or emotional injury; fraud, misrepresentation, defamation, and any other tort claims;
wages or other compensation due; penalties; benefits; reimbursement of expenses; discrimination or harassment, including but not
limited to discrimination or harassment based on race, sex, color, pregnancy, religion, national origin, ancestry, age, marital
status, physical disability, mental disability, medical condition, or sexual orientation; retaliation; violation of any local,
state, or federal constitution, statute, ordinance or regulation (as originally enacted and as amended), including but not limited
to Title VII of the Civil Rights Act of 1964, Age Discrimination in Employment Act of 1967, Americans With Disabilities Act, Fair
Labor Standards Act, Executive Retirement Income Security Act, Immigration Reform and Control Act, Consolidated Omnibus Budget
Reconciliation Act, Family and Medical Leave Act, California Fair Employment and Housing Act, California Family Rights Act, California
Labor Code, California Civil Code, and the California Wage Orders or similar laws of other states. This Agreement shall not apply
to any dispute if an agreement to arbitrate such dispute is prohibited by law.

 

(c)              
Arbitration Process. The Parties further agree that any arbitration shall be conducted before one neutral arbitrator
selected by the parties and shall be conducted under the Employment Arbitration Rules of the American Arbitration Association (“AAA
Rules”) then in effect. Executive may obtain a copy of the AAA Rules by accessing the AAA website at www.adr.org,
or by requesting a copy from the President of the Board. By signing this Agreement, Executive acknowledges that he or she has had
an opportunity to review the AAA Rules before signing this Agreement. The arbitration shall take place in Manhattan, New York.
The arbitrator shall have the authority to order such discovery by way of deposition, interrogatory, document production, or otherwise,
as the arbitrator considers necessary to a full and fair exploration of the issues in dispute, consistent with the expedited nature
of arbitration. The arbitrator is authorized to award any remedy or relief available under applicable law that the arbitrator deems
just and equitable, including any remedy or relief that would have been available to the parties had the matter been heard in a
court. Nothing in this Agreement shall prohibit or limit the parties from seeking provisional remedies under California Code of
Civil Procedure section 1281.8 or similar state and local laws, including, but not limited to, injunctive relief from a court of
competent jurisdiction. The arbitrator shall have the authority to provide for the award of attorney’s fees and costs if
such award is separately authorized by applicable law. Executive shall not be required to pay any cost or expense of the arbitration
that he would not be required to pay if the matter had been heard in a court. The decision of the arbitrator shall be in writing
and shall provide the reasons for the award unless the parties agree otherwise. The arbitrator shall not have the power to commit
errors of law or legal reasoning and the award may be vacated or corrected on appeal to a court of competent jurisdiction for any
such error.

 

(d)              
Federal Arbitration Act. This agreement to arbitrate shall be enforceable under and subject to the Federal Arbitration
Act, 9 U.S.C. Sections 1, et. seq.

 

f.                  
Entire Agreement, Amendment and Waiver. This Agreement contains the entire understanding and agreement between the
parties, and supersedes any other agreement between the Company and Executive, whether oral or in writing, with respect to the
subject matter hereof. This Agreement may not be altered or amended, nor may any of its provisions be waived, except by a writing
signed by both parties hereto or, in the case of an asserted waiver, by the party against whom the waiver is sought to be enforced.
Waiver of any provision of this Agreement, or any breach thereof, shall not be deemed to be a waiver of any other provision or
any subsequent alleged breach of this Agreement.

 

g.                 
Clawback, Stock Ownership and Holding Period Requirements. Notwithstanding any other provision in this Agreement
to the contrary, Executive shall be subject to the written policies of the Company’s Board of Directors applicable to Company
executives, relating to recoupment or “clawback” of incentive compensation.

 

h.                  Survival
and Counterparts. The provisions of Section 1 (Definitions), Section 5 (Confidentiality), Section 6 (Intellectual
Property), Section 7 (Covenants) and Section 8 (General Provisions) of this Agreement shall survive the termination of this
Agreement. This Agreement may be executed in counterparts, with the same effect as if both parties had signed the same
document. All such counterparts shall be deemed an original, shall be construed together and shall constitute one and the
same instrument. This Agreement shall supersede any prior or other agreement governing the subject matter hereof.

 

[Remainder of Page Intentionally Left
Blank; Signature Page Follows]

 

 

 

 

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

 

 

	 	Company:
	 	 
	 	ACACIA RESEARCH GROUP LLC
	 	 	 
	 	 	 
		By:	 
	 	 	Name:
	 	 	Title:
	 	 	 
	 	 	 
	 	Executive:
	 	 	 
	 	 	 
	 	 	MARC BOOTH

 

 

 

 

 

 

 

 

 

 

 

 

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EXHIBIT A

 

INSIDER TRADING POLICY

 

 

 

 

See attached.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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INSIDER TRADING POLICY

 

Statement of Policies and Procedures

Governing Material Nonpublic Information and

The Prevention of Insider Trading

 

 

Updated: June 13, 2019

 

 

I.                  
Purpose of this Policy

 

The purchase or sale of securities
while possessing material nonpublic (“inside”) information or the disclosure of inside information (“tipping”)
to others who may trade in such securities is sometimes referred to as “insider trading” and is prohibited by federal
and state securities laws. As an essential part of your work, you may have access to material nonpublic information about Acacia
Research Corporation and/or its subsidiaries (including information about other companies with which Acacia does, or may do, business).
When we refer in this Policy to “Acacia” or the “Company,” we are referring to Acacia Research Corporation
and all its subsidiaries and divisions worldwide.

 

This Insider Trading Policy (the
“Policy”) was adopted by Acacia Research Corporation’s Board of Directors on February 1, 2019 to prevent illegal
insider trading and to avoid even the appearance of improper conduct on the part of any Company director, officer, employee or
contractor. This Policy is designed to protect and further the reputation of Acacia for integrity and ethical conduct. Remember,
however, the ultimate responsibility for complying with the securities laws, adhering to this Policy and avoiding improper transactions
rests with you. It is imperative that you use your best judgment.

 

II.               
Penalties for Insider Trading

 

The penalties for violating the
insider trading laws include imprisonment, disgorgement of profits gained or losses avoided, civil fines of up to three times the
profit gained or loss avoided, and criminal fines of up to $5.0 million for individuals and $25.0 million for entities. Individuals
and entities considered to be “control persons”1 who knew or recklessly disregarded the fact that a “controlled
person” was likely to engage in insider trading may be civilly liable for the greater of (i) $1 million or (ii) three times
the amount of the profit gained or loss avoided. Under some circumstances, individuals who trade on inside information may also
be subjected to private civil lawsuits. Moreover, as the material nonpublic information of Acacia is the property of the Company,
trading on or tipping Acacia’s confidential information could result in serious employment sanctions, including dismissal.

 

 

 

 

 

__________

1 A “control person” is an
entity or person who directly or indirectly controls another person, and could include the Company, its directors and officers.

 

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You should be aware that
stock market surveillance techniques are becoming more sophisticated all the time, and the chance that federal authorities will
detect and prosecute even a small insider trading violation is a significant one.

 

Employees who violate this
Policy may be subject to disciplinary action by the Company, including dismissal for cause. Any exceptions to the Policy, if permitted,
may only be granted by the Compliance Officer and must be provided before any activity contrary to the above requirements takes
place.

 

III.       Scope
and Applicability

 

A.                
Covered Persons. This Policy applies to Acacia’s Board of Directors and to all employees and contractors
within all of Acacia’s operations worldwide. All persons covered by this Policy are referred to as “Covered Persons.”
This Policy also applies to family members and domestic partners who share a Covered Person’s household, and any other individual
whom the Compliance Officer may designate as a Covered Person because he or she has access to material nonpublic information concerning
the Company.

 

B.                 
Covered Securities and Transactions. This Policy applies to all transactions in the Company’s equity securities,
including common stock and any other type of securities that the Company may issue, such as preferred stock, notes, bonds, convertible
debentures and warrants, and exchange-traded options (including puts and calls) and other derivative securities. This Policy applies
to sales, purchases, gifts, exchanges, pledges, options, hedges, puts, calls and short sales.

 

This Policy applies to all
investment decisions you make regarding Company securities. For example, if you have the power to direct the purchase or sale of
Company securities by virtue of your position as a director or officer of a corporation or non-profit organization, or as a trustee
of a trust or executor of an estate, then all transactions in Company securities on behalf of the corporation, organization, trust
or estate are covered by this Policy.

 

This Policy also applies
to trading in securities of another company if you learn material nonpublic information about that company in the course of your
employment or association with Acacia.

 

C.                
Delivery of the Policy; Certifications. This policy will be delivered to all Covered Persons upon its adoption by the
Company, and to all new directors, employees and where appropriate, contractors, at the commencement of their employment or service
with the Company. Thereafter, the Policy shall be distributed annually. All Covered Persons must certify their understanding of,
and intent to comply with, this Policy and send the original to the Company’s Legal Department. A copy of the certification
that all Covered Persons must sign is attached hereto as Exhibit A.

 

IV.       Definitions

 

A.                
Insider Trading. In general, “insider trading” occurs when a person purchases or sells a security while
in possession of inside information in breach of a duty of trust or confidence owed directly or indirectly to the issuer of the
security, the issuer’s stockholders or the source of the information. “Inside information” is information which
is considered both “material” and “nonpublic.” Insider trading is a crime, and it is strictly prohibited
by this Policy.

 

 

 

 

 

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B.                 
Materiality. A fact is considered “material” if there is a substantial likelihood that a reasonable investor
would consider it important in making a decision to buy, hold or sell securities or if disclosure of the information would be
expected to significantly alter the total mix of the information in the marketplace about the issuer of the security. Material
information can be either good or bad and is not limited to financial information. While it is impossible to list all types of
information that might be deemed “material” under particular circumstances, information dealing with the following
subjects affecting the Company is generally considered to be material:

 

		·	projections of future earnings, losses or financial liquidity problems;

		·	anticipated or actual financial results of the Company for the quarter and/or year;

		·	news of a pending or proposed joint venture, merger, acquisition, tender offer,

divestiture, recapitalization, strategic alliance,
licensing arrangement or purchase or sales of substantial assets;

		·	news of a significant sale or disposition or write-downs of assets;

		·	new major contracts, strategic partners, suppliers, customers or loss thereof;

		·	change in debt ratings;

		·	changes in dividend policies or amounts, or the declaration of a stock split;

		·	offerings of additional securities or financing developments;

		·	changes in senior management;

		·	major changes in accounting methods or policies;

		·	cybersecurity risks and incidents, including vulnerabilities and breaches;

		·	major personnel changes, labor disputes or negotiations; and

		·	significant litigation or government investigations or the resolution thereof.

 

C.                
Nonpublic
Information. Information is “nonpublic” if it has not been widely disclosed to the general public through major
newswire services, national news services and financial news services, or through filings with the Securities & Exchange Commission
(“SEC”). For purposes of this Policy, information will be considered public, i.e., no longer “nonpublic,”
after the close of trading on the second full trading day following the Company’s widespread release of the information.

 

Nonpublic information may include:

 

		·	information available to a select group of analysts or brokers or institutional investors;

		·	undisclosed facts that are the subject of rumors, even if the rumors are
widely circulated; and

		·	information that has been entrusted to the Company on a confidential basis until a public announcement
of the information has been made and enough time has elapsed for the market to respond to a public announcement of the information
(normally two trading days).

 

D.                
Tipping.
“Tipping” is the disclosure of material nonpublic information concerning the Company or its securities to an outside
person. Providing insider information to anyone who thereafter trades on the basis of that information may subject both you (the
“tipper”) and the other person (the “tippee”) to insider trading liability.

 

 

 

 

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V.       Prohibited
Activities

 

A.       Prohibitions.
Except for limited exceptions described below, the following activities are prohibited under this Policy:

 

		1.	No Covered Person may purchase, sell, transfer or effectuate any other transaction in Company
securities while in possession of material nonpublic information concerning the Company or its securities. This prohibition includes
sales of shares received upon exercise of stock options or upon vesting of Restricted Stock Units and Awards, and shares held in
the Company’s 401(k) plan.

 

		2.	No Covered Person may “tip” or disclose material nonpublic information concerning
the Company or its securities to any outside person (including family members, affiliates, analysts, investors, members of the
investment community and news media). Should a Covered Person inadvertently disclose such information to an outsider, the Covered
Person must promptly inform the Compliance Officer regarding this disclosure. The Company will take steps necessary to preserve
the confidentiality of the information, including requiring the outsider to agree in writing to comply with the terms of this Policy
and/or sign a confidentiality agreement.

 

		3.	No Covered Person may purchase Company securities on margin, hold Company
securities in a margin account, or otherwise pledge Company securities as collateral for a loan because, in the event of a margin
call or default on the loan, the broker or lender could sell the shares at a time when the Covered Person is in possession of material
nonpublic information, resulting in liability for insider trading. In addition, pledging of securities by Covered Persons, including
margin arrangements, can be perceived to undermine the alignment of their interests and incentives with the long-term interests
of other stockholders.

 

		4.	Short-term and speculative trading in Company securities, as well as hedging and other derivative
transactions involving Company securities, can create the appearance of impropriety and may become the subject of an SEC investigation,
particularly if the trading occurs before a major Company announcement or is followed by unusual activity or price changes in the
Company’s stock. These types of transactions can also result in inadvertent violations of insider trading laws and/or liability
for short-swing profits under Section 16(b) of the Securities Exchange Act of 1934.2 Therefore, it is the Company’s
policy to prohibit the following activities, even if you are not in possession of material nonpublic information:

 

		(a)	No Covered Person may trade in any interest or position relating to the future price of Company
securities, such as put or call options or other derivatives, or short sale of Company securities.

 

		(b)	No Covered Person may hedge Company securities. A “hedge” is a transaction designed
to offset or reduce the risk of a decline in the market value of an equity security, and can include, but is not limited to, prepaid
variable forward contracts, equity swaps, collars, and exchange funds.

 

		(c)	Covered Persons may not trade in securities of the Company on an active
basis, including short term speculation.2

 

 

 

__________

2 Under Section 16(b) of the Securities Exchange
Act of 1934, directors and executive officers of the Company are subject to liability for any “short-swing” profits
realized from a purchase and sale, or sale and purchase of equity securities of the Company within any period of less than six
months.

 

    	 	12	 

     

    

 

		5.	No Covered Person may trade in securities of another company if the Covered Person is in possession
of material nonpublic information about that other company which the Covered Person learned in the course of their work for Acacia.

 

B.       Exceptions
to Prohibited Activities. Prohibitions in trading securities under this Policy do not include:

 

		1.	The investment of 401(k) plan contributions in a Company stock fund in accordance
with the terms of the Company's 401(k) plan. However, any changes in your investment election regarding the Company’s stock
are subject to trading restrictions under this Policy.

 

		2.	The purchase of Company stock through periodic, automatic payroll contributions
to the Company's Employee Stock Purchase Plan (“ESPP”), if and when such ESPP is adopted. However, electing to enroll
in the ESPP, making any changes in your elections under the ESPP and selling any Company stock acquired under the ESPP are subject
to trading restrictions under this Policy.

 

		3.	The exercise of vested employee stock options, either on a “cash for stock” or “stock
for stock” basis, where no Company stock is sold to fund the option exercise3.

 

		4.	The receipt of Company stock upon vesting of Restricted Stock Units and Awards,
as well as the withholding of Company stock by the Company in payment of tax obligations.

 

		5.	Company securities purchased or sold under a Company authorized Rule 10b5-1 Trading Plan (see
Section X below).

 

		6.	Transfers of Company stock by a Covered Person into a trust for which the Covered Person is a
trustee, or from the trust back into the name of the Covered Person.

 

VI.       Company
Compliance Officer

 

The Compliance Officer may
designate one or more individuals to perform the Compliance Officer’s duties. The determinations of the Compliance Officer
under this Policy are final.

 

The duties of the Compliance Officer include, but
are not limited to, the following:

 

		1.	assisting with implementation and enforcement of this Policy;

 

		2.	circulating this Policy to all employees and ensuring that this Policy is
amended as necessary to remain up-to-date with insider trading laws;

 

		3.	pre-clearing all trading in securities of the Company by Covered Persons in accordance with the
procedures set forth in Section VIII below; and

 

		4.	providing approval of any Rule 10b5-1 plans under Section X below and any prohibited transactions
under Section V above.

 

		5.	providing a reporting system with an effective whistleblower protection mechanism.

 

 

 

 

__________

3
While vested employee stock options may be exercised at any time under this Policy, the sale of any stock acquired through
such exercise is subject to this Policy.

 

    	 	13	 

     

    

 

VII. Confidentiality
of Information Relating to the Company

 

A.                
Access to Information. Risk of insider trading violations by individuals affiliated with the Company can be substantially
limited by restricting the pool of individuals with access to material nonpublic information to the greatest extent possible. Access
to material nonpublic information about the Company, including Acacia’s business, earnings and prospects, should be limited
to officers, directors and employees of the Company on a need-to-know basis. In addition, such information should not be communicated
to anyone outside of the Company, unless such person has signed an appropriate confidentiality agreement. When communication of
material nonpublic information about the Company to employees becomes necessary, all directors, officers and employees must take
care to emphasize the need for confidential treatment of such information and adherence to the Company’s policies with regard
to confidential information.

 

B.                 
Disclosure of Information. Material nonpublic Company information is the property of Acacia and the confidentiality
of this information must be strictly maintained within the Company. Only the Chief Executive Officer and the Chief Financial Officer
are authorized to disclose material nonpublic information about the Company to the public, members of the investment community
(including analysts) or to stockholders, unless one of these officers has expressly authorized disclosure by another employee in
advance. All inquiries regarding the Company should be directed to the Chief Executive Officer or to the Chief Financial Officer
and no other comment should be provided.

 

VIII. Pre-Clearance
Required for Trading by Covered Persons

 

All Covered Persons must pre-clear planned transactions
in Company securities as provided below:

 

		1.	The Covered Person proposing to effectuate a trade or other transaction in Company securities
must notify the Compliance Officer in writing of the amount and nature of the proposed transaction no earlier than two business
days prior to the proposed transaction date.

 

		2.	The Covered Person proposing to effectuate such trade or other transaction
must certify to the Compliance Officer in writing that he or she is not in possession of material nonpublic information concerning
the Company or its securities.

 

		3.	The Compliance Officer must approve the proposed trade or other transaction
in writing.

 

		4.	Note: If the transaction order is not placed within ten (10) business days after receiving
clearance, clearance for the transaction must be re-requested since circumstances may have changed over that time period.

 

		5.	The Compliance Officer’s decision on clearance, whether approved or denied, shall be kept
confidential.

 

Pre-clearance requests should be submitted by
completing one of the forms attached hereto as Exhibit B and Exhibit C and by following all associated
instructions.

 

IX.       Blackout
Periods Applicable to Covered Persons

 

A.                
No Trading During Blackout Periods. No Covered Person may trade or effectuate any other transactions in Company securities
during regular blackout periods or during any special blackout periods designated by the Compliance Officer (except for the limited
exceptions described in Section V.B above). Remember that even during an open trading window, you may not trade in Company securities
if you are in possession of material nonpublic information concerning the Company or its securities.

 

 

 

 

    	 	14	 

     

    

 

B.                 
Regular Blackout Periods Defined. Subject to obtaining trading pre-approval from the Compliance Officer in accordance
with the procedures set forth in Section VIII above, Covered Persons may not trade in Company securities during the period that
ends ten business days prior to the end of the fiscal quarter and continues until the close of trading on the first full business
day after the Company’s public release of quarterly or annual financial results. To provide clarity, the Compliance Officer
will notify Covered Persons, in advance of each quarter end, of the date on which the blackout period begins and ends. Trades made
pursuant to an approved 10b5-1 Trading Plan (see Section X below) are exempted from this restriction.

 

C.                
Special Blackout Periods. From time to time, the Compliance Officer may determine that trading in Company securities
is inappropriate during an otherwise open trading window due to the existence of material nonpublic information. Accordingly, the
Compliance Officer may prohibit trading at any time by announcing a special blackout period. The Compliance Officer will provide
notice of any modification of the trading blackout policy or any additional prohibition on trading during the period when trading
is otherwise permitted under this Policy. The existence of a special blackout period should be considered confidential information
and Covered Persons are prohibited from communicating the existence of a special blackout period to anyone who is not a Covered
Person.

 

D.                
Blackout Periods Required by the Sarbanes-Oxley Act of 2002. In order to comply with certain provisions of the Sarbanes-Oxley
Act of 2002, no director or executive officer of the Company may, directly or indirectly, purchase, sell or otherwise acquire
or transfer any equity security of the Company during any period of time that participants in the Company’s 401(k) plan
are prohibited from trading interests in the Company’s equity securities under such plan. The “blackout period”
is defined for purposes of this rule as any period of more than three consecutive business days during which the ability of 50
percent or more of the participants or beneficiaries located in the United States under all individual account plans of the Company
to purchase or sell any equity securities of the Company under any such plan is suspended by action of the Company or a fiduciary
of the plan. The Sarbanes-Oxley Act requires the Company to timely notify affected directors and executive officers and the SEC
of any such blackout period. If you are a director or executive officer of the Company, the Compliance Officer will disapprove
any requested transaction involving equity securities of the Company that would occur during a blackout period for participants
in the Company’s 401(k) plan.

 

E.                
Hardship
Trading Exceptions. The Compliance Officer may, on a case-by-case basis, authorize trading in Company securities during a trading
blackout period due to financial or other hardship. Any person wanting to rely on this exception must first notify the Compliance
Officer in writing of the circumstance of the hardship and the amount and nature of the proposed trade. Such person will
also be required to certify to the Compliance Officer in writing no earlier than two business days prior to the proposed trade
that he or she is not in possession of material nonpublic information concerning the Company or its securities. Upon authorization
from the Compliance Officer, the person may trade, although such person will be responsible for ensuring that any such trade complies
in all other respects with this Policy.

 

X.       10b5-1
Trading Plans

 

The Compliance Officer must pre-clear
any Rule 10b5-1 trading plan4. A Rule 10b5-1 trading plan is a contract to purchase or sell securities according to
a written instruction or plan established prior to making any transactions. The Rule 10b5-1 trading plan must be adopted in good
faith and without knowledge of material nonpublic information. Covered Persons who wish to enter into a Rule 10b5-1 trading plan
must obtain the prior written approval of the Compliance Officer. Prior written approval is likewise required before a Covered
Person may modify, in any way, an approved Rule 10b5-1 trading plan. Transactions effected under an approved Rule 10b5-1 trading
plan will not require further preclearance at the time of the trade and will not be subject to the trading blackout periods under
this Policy.

 

 

 

 

_________

4
A trading plan adopted pursuant to Rule 10b5-1 under the Securities Exchange Act of 1934, if properly structured, provides
an affirmative defense to a claim that the insider traded on the basis of material nonpublic information.

 

    	 	15	 

     

    

 

In order to receive pre-clearance, a trading plan
must meet the following parameters:

 

		(1)	No trading plan may be adopted, terminated, amended, revised or otherwise
modified except during a Window Period when that individual is not then in possession of any material nonpublic information.

 

		(2)	No plan participant may engage in extra-plan, corresponding hedging positions with respect to
Company stock.

 

		(3)	The effective date of the trading plan must be not less than thirty (30) days following adoption
of the trading plan.

 

		(4)	The trading plan may not be modified more than once every six (6) months following the plan’s
adoption or any modification of the plan and such modifications shall not take effect until at least ninety (90) days after adoption
of such modification.

 

		(5)	A trading plan may be terminated upon prior written notice. If a trading plan is terminated
                                                                prior to its stated term and a new plan adopted in its place, the new trading plan shall not take effect until ninety (90)
                                                                days following its adoption. Notwithstanding the foregoing, a new trading plan adopted for the sole purpose of selling stock
                                                                to satisfy the tax obligations upon vesting of a restricted
stock grant may take effect in less than ninety (90) days following its adoption.

 

Purchases and sales made pursuant
to a Rule 10b5 -1 trading plan must still comply with all other applicable reporting requirements under federal and state securities
laws, including Form 4 filings pursuant to Section 16 of the Securities Exchange Act of 1934.

 

XI.       Instructions
for Pre-clearance for the Purchase or Sale of Acacia Stock or Exercising of Acacia Stock Options 

 

Pre-clearance for Covered Persons
is mandatory. Please request pre-clearance for a transaction by giving a copy of the Advanced Notice for Personal Trading Form
for RSAs and RSUs, attached hereto as Exhibit B, and the Pre-Clearance to Exercise Options Form for stock options, attached
hereto as Exhibit C, to Jennifer Graff.

 

 

 

 

 

 

 

 

 

 

    	 	16	 

     

    

 

EXHIBIT A

 

CERTIFICATION

 

I hereby certify that:

 

		·	I have read and understand the Company’s Insider Trading Policy Statement of Polices and
Procedures Governing Material Nonpublic Information and the Prevention of Insider Trading. I understand that the Company’s
Compliance Officer is available to answer any questions I have regarding this Insider Trading Policy.

 

		·	Since the effective date of the Insider Trading Policy, or such shorter period of time that I
have been a director, officer, employee or contractor of the Company, I have complied with the Insider Trading Policy.

 

		·	I will continue to comply with the Company’s Insider Trading Policy
for as long as I am a director, officer, employee or contractor of the Company.

 

		·	I understand that failure to comply with the Insider Trading Policy could subject me to disciplinary
action or termination of the business or employment relationship with Acacia.

 

	 	 	 	 
	Signature	 	Date	 
	 	 	 	 
	 	 	 	 
	Printed Name (Please
print legibly)	 	 	 

 

 

 

 

 

 

 

 

 

 

 

 

 

Exhibit A

    	 	 	 

     

    

 

EXHIBIT B

 

ADVANCE NOTICE FOR PERSONAL TRADING
FORM

 

	TO:	Acacia Research Corporation
	 	 
	FROM:	_____________
	 	 
	DATE:	 
	 	 
	RE:	Advance Notice for Personal Trading

 

I, the undersigned, hereby give advance notice
to Acacia Research Corporation that I intend to ☐ purchase      ☐  sell
up to______________ shares of Acacia Research Corporation common stock.

 

 ☐ These shares are held in my 401(k) plan.

 

 ☐ ______
of these shares were obtained from options that I exercised on , 20___:

 

o  
At $______ per share (the exercise price)

 

o  
Granted on ___________, 20___

I hereby certify as of the date above that:

 

		·	I have previously received and am familiar with the Company’s insider trading policy;

 

		·	I have complied with all procedures established by the Company’s insider
trading policy in connection with the transaction described above; and

 

		·	to my knowledge, I am not in possession of any material nonpublic information about the Company
and/or its affiliated companies.

 

I acknowledge that I have ten (10) business days
from the date of approval, or until the window closes, whichever is shorter, in which to complete the trade I have requested.

 

_____________________________

Signature:

 

MANAGEMENT APPROVAL:

 

 

 

_____________________________

 

Date:_________________________

 

 

 

 

 

 

 

 

Exhibit B

    	 	 	 

     

    

 

EXHIBIT C

 

PRE-CLEARANCE TO EXERCISE OPTIONS

 

I, ________________ hereby notify Acacia Research
Corporation (the “Corporation”) that I elect to purchase____________ shares (the “Exercised Shares”)
of the Corporation’s Common Stock (“Common Stock”) at the option exercise price of ________ per share
(the “Exercise Price”) pursuant to that certain option granted to me under the Acacia Research Corporation
20__Stock Incentive Plan on ____________, 20__(the “Option”).

 

Type of Option 

 

_______ Incentive Option (ISO)
                                        _______ Non-Statutory Option (Non-Qual)

 

Type of Transaction

____      Cash Exercise
(Purchase of the option shares with the intent to hold the shares for sale at a future date). NOTE: If you choose to
do a cash exercise, you may not sell the acquired share without subsequent approval during a period when the trading window
is open. Please refer to the Acacia Insider Trading Policy.

____      Cashless Exercise (Same-day
purchase of the option shares and immediate sale of all the shares on the open market.)

____      Sell-to-Cover Exercise (Purchase
of the option shares and immediate sale of less than all the shares). NOTE: If you choose to do a Sell-to-Cover exercise,
you may not sell the remaining shares without subsequent approval during a period when the trading window is open. Please refer
to the Acacia Insider Trading policy.

 

Concurrently with the delivery of this Notice of
Exercise to the Corporation, I shall pay, or cause to be paid to the Corporation the Exercise Price for the Exercised Shares in
accordance with the provisions of my agreement with the Corporation (or other documents) evidencing the Option and shall deliver
whatever additional documents may be required by such agreement as a condition for exercise.

 

I hereby certify as of the date above that: 

		·	I have previously received and am familiar with the Corporation’s Insider Trading Policy;

		·	I have complied with all procedures established by the Corporation’s Insider Trading Policy
in connection with the transaction described above; and

		·	To my knowledge, I am not in possession of any material nonpublic information about the Corporation
and/or its affiliated companies.

 

I acknowledge that I have ten (10) business days
from the date of approval, or until the window closes, whichever is shorter, in which to complete the trade I have requested. I
also acknowledge that I will notify Jennifer Graff by email as soon as I have given my broker any exercise instructions.

 

	 	 	 	 
	Date	 	Signature	 
	 	 	 	 
	MANAGEMENT APPROVAL:	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	Date: _______________	 	 	 

 

 

 

 

 

 

Exhibit C

    	 	 	 

     

    

 

EXHIBIT B

 

SEXUAL HARASSMENT POLICY

 

 

 

 

See attached.

 

 

 

 

 

 

 

 

 

 

 

 

 

    	 	20	 

     

    

 

HARASSMENT, DISCRIMINATION AND RETALIATION PREVENTION
POLICY

 

Acacia Research Corporation (the
“Company”) is committed to providing a workplace free of sexual harassment and discrimination (which includes harassment
or discrimination based on pregnancy, childbirth, breastfeeding and related medical conditions) as well as unlawful harassment
and discrimination based on such factors as race, color, religious creed (including religious dress and grooming practices), creed,
family status, national origin (including language use restrictions), ancestry, age for individuals over forty years of age, physical
disability (including HIV/AIDS), mental disability, medical condition (including cancer), genetic information, genetic condition,
genetic characteristics, actual or perceived marital status, registered domestic partner status, sexual orientation, gender, gender
identity, gender expression, alienage or citizenship status, domestic violence victim status, consumer credit history, caregiver
status, unemployment status, arrest records and conviction status under certain circumstances to the extent required by applicable
law, sexual and reproductive health decisions, military and veteran status, denial or use of family and medical care leave, and
any other factor made unlawful by federal, state, or local law. Discrimination and harassment are also prohibited on the basis
of a perception that a person has any of the above characteristics, or that the person is associated with a person who has, or
is perceived to have, any of the above characteristics. The Company strongly disapproves of and will not tolerate any form or unlawful
harassment or discrimination, including against employees or applicants by managers, supervisors, or co-workers, as well as by
third parties in the workplace or with whom the employee comes into contact in connection with their employment.

 

This policy applies to all Company
employees, paid or unpaid interns, volunteers, and any other persons providing services to the Company pursuant to a contract.
The Company also maintains a separate policy prohibiting sexual harassment, entitled “Sexual Harassment Prevention Policy,
New York Employees,” that supplements this policy and that applies only to all employees, paid or unpaid interns, volunteers,
contractors and any other persons providing services to or conducting business with the Company in New York. To the extent there
is any conflict between this policy and the Company’s Sexual Harassment Policy, New York Employees, the Sexual Harassment
Policy, New York Employees will control over this policy as to those individuals subject to that policy.

 

Harassment includes verbal, physical,
and visual conduct, as well as communication through electronic media of any type, that creates an intimidating, offensive or hostile
working environment or interferes with work performance. Such conduct constitutes harassment when (1) submission to the conduct
is made either an explicit or implicit condition of employment; (2) submission to or rejection of the conduct is used as the basis
for an employment decision; or (3) the harassment interferes with an employee’s work performance or creates an intimidating,
hostile or offensive work environment. Harassing conduct can take many forms and includes, but is not limited to, slurs, jokes,
statements, gestures, pictures, or cartoons regarding an employee’s sex, race, color, national origin, religion, age, physical
disability, medical condition, ancestry, marital status, sexual orientation, gender, gender identity, veteran status, or other
protected status.

 

Sexually harassing conduct in
particular includes all of these prohibited actions as well as other unwelcome conduct such as requests for sexual favors, unwelcome
sexual advances, verbal conduct of a sexual nature (like name calling, suggestive comments, or lewd talk) or physical conduct
(including assault, unwanted touching, intentionally blocking normal movement or interfering with work because of sex or any other
protected basis). An employee who unlawfully harasses a co-worker may be personally liable for the harassment.

 

If
you believe you or a co-worker has been subjected to any form of unlawful discrimination or harassment, including sexual harassment,
you should immediately contact your supervisor or report the issue directly to the Director of Human Resources, either orally
or in writing. A manager or supervisor who learns of any misconduct which may be in violation of this policy or learns of an employee’s
complaint or concern about a possible violation of this policy must immediately report the issue to the Company’s Director
of Human Resources.

 

 

 

 

    	 	21	 

     

    

 

Upon receipt of any complaint,
the Company will immediately undertake a prompt, impartial, and thorough investigation conducted by qualified personnel, preserving
confidentiality to the extent possible. All complaints under this policy will receive a timely response, documentation and tracking
of progress, and timely closure. The investigation will provide all parties appropriate due process and reach reasonable conclusions
based on the evidence collected, as well as determine appropriate options for remedial action to resolve the situation. If at the
end of the investigation misconduct is found, the Company will take appropriate remedial measures. If you have a complaint being
investigated under this policy, you can find out about the progress of the investigation by contacting the Director of Human Resources.

 

Retaliation against Company
employees or any other person for the good faith reporting of possible acts or incidents of discrimination or harassment, as well
as for participating in any workplace investigation, will not be tolerated. If you believe you or a co-worker has been subjected
to any form of unlawful retaliation, you should immediately contact your supervisor or the Director of Human Resources, either
orally or in writing. Upon receipt of a retaliation complaint, the Company will undertake an investigation consistent with the
provisions of this policy. Company employees shown to have engaged in such retaliation will be disciplined, up to and including
discharge.

 

Sexual harassment and retaliation
for opposing sexual harassment or participating in investigations of sexual harassment are illegal. In addition to notifying the
Company about discrimination, harassment or retaliation complaints, affected employees may also direct their complaints to the
federal, state and/or local agencies with responsibility for enforcing laws related to harassment, discrimination or retaliation,
such as the California Department of Fair Employment and Housing (DFEH), New York State Division of Human Rights, or any of the
local offices of the U.S. Equal Employment Opportunity Commission (EEOC).

 

The U.S. Equal Employment
Opportunity Commission, California Department of Fair Employment and Housing, New York State Division of Human Rights and other
agencies are authorized to accept and investigate complaints of employment discrimination, harassment and/or retaliation, and to
mediate settlements. Certain agencies, such as the California Fair Employment and Housing Commission (FEHC), have authority to
issue accusations against employers, conduct formal hearings, and award reinstatement, back pay, damages, and other affirmative
relief. State and federal law also prohibit retaliation against employees because they have filed a complaint with the EEOC, New
York State Division of Human Rights, DFEH or other state agencies, participated in an

investigation, proceeding, or hearing with such agencies,
or opposed any practice made unlawful by applicable state or federal law.

 

The deadline for filing complaints
with the DFEH or New York State Division of Human Rights is one (1) year from the date of the alleged unlawful conduct. You can
contact the nearest DFEH office or the FEHC at the locations listed in the Company’s DFEH poster or by checking the state
government listings online or in the local telephone directory. The New York State Division of Human Rights main office contact
information is: NYS Division of Human Rights, One Fordman Plaza, Fourth Floor, Bronx, New York 10458, (718) 741-8400, www.dhr.ny.gov.

 

Additional information
regarding governmental agencies responsible for accepting complaints and addressing issues related to harassment, discrimination
or retaliation for Company employees in New York is included in the Company’s Sexual Harassment Prevention Policy, New
York Employees.

 

 

 

 

 

 

 

 

    	 	 	 

     

    

 

EXHIBIT C

 

EXECUTIVE OFFICER STOCK OWNERSHIP GUIDELINES

 

 

 

See attached.htgm-ex41_7.htm

Exhibit 4.1

THIS WARRANT AND THE SHARES ISSUABLE HEREUNDER HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR THE SECURITIES LAWS OF ANY STATE AND, EXCEPT AS SET FORTH IN SECTIONS 6.3 AND 6.4 BELOW, MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED UNLESS AND UNTIL REGISTERED UNDER SAID ACT AND LAWS OR IN FORM AND SUBSTANCE SATISFACTORY TO THE COMPANY, SUCH OFFER, SALE, PLEDGE OR OTHER TRANSFER IS EXEMPT FROM SUCH REGISTRATION.

WARRANT TO PURCHASE COMMON STOCK

 

		
	
Company:  
	
HTG MOLECULAR DIAGNOSTICS, INC., a Delaware corporation

	
Number of Shares:  
	
643,413

	
Type/Series of Stock:
	
Common Stock

	
Warrant Price:  
	
$0.7771  

	
Issue Date:  
	
June 24, 2020

	
Expiration Date:  
	
June 24, 2030 See also Section 6.1(b).

	
Credit Facility:
	
This Warrant to Purchase Common Stock (“Warrant”) is issued in connection with that certain Loan and Security Agreement of even date herewith between Silicon Valley Bank and the Company (as the same may from time to time be amended, modified, supplemented or restated, collectively, the “Loan Agreement”).

 

THIS WARRANT CERTIFIES THAT, for good and valuable consideration, SILICON VALLEY BANK (together with any successor or permitted assignee or transferee of this Warrant or of any shares issued upon exercise hereof, “Holder”) is entitled to purchase the number of fully paid and non-assessable shares (the “Shares”) of the above-stated common stock (the “Common Stock”) of the above-named company (the “Company”) at the above-stated Warrant Price, all as set forth above and as adjusted pursuant to Section 2 of this Warrant, subject to the provisions and upon the terms and conditions set forth in this Warrant.  Reference is made to Section 6.4 of this Warrant whereby Silicon Valley Bank shall transfer this Warrant to its parent company, SVB Financial Group.

SECTION 1.  EXERCISE.

1.1Method of Exercise.  Holder may at any time and from time to time exercise this Warrant, in whole or in part, by delivering to the Company the original of this Warrant together with a duly executed Notice of Exercise in substantially the form attached hereto as Appendix 1 and, unless Holder is exercising this Warrant pursuant to a cashless exercise set forth in Section 1.2, a check, wire transfer of same-day funds (to an account designated by the Company), or other form of payment acceptable to the Company for the aggregate Warrant Price for the Shares being purchased.

1.2Cashless Exercise.  On any exercise of this Warrant, in lieu of payment of the aggregate Warrant Price in the manner as specified in Section 1.1 above, but otherwise in accordance with the requirements of Section 1.1, Holder may elect to receive Shares equal to the value of this Warrant, or portion hereof as to which this Warrant is being exercised.  Thereupon, the Company shall issue to the Holder such number of fully paid and non-assessable Shares as are computed using the following formula:

X = Y(A-B)/A

where:

	
 
	
X =
	
the number of Shares to be issued to the Holder;

	
 
	
Y =
	
the number of Shares with respect to which this Warrant is being exercised (inclusive of the Shares surrendered to the Company in payment of the aggregate Warrant Price);

	
 
	
A =
	
the fair market value (as determined pursuant to Section 1.3 below) of one Share; and

	
 
	
B =
	
the Warrant Price.

1.3Fair Market Value.  If the Company’s Common Stock is then traded or quoted on a nationally recognized securities exchange, inter-dealer quotation system or over-the-counter market (a “Trading Market”), the fair market value of a Share shall be the closing price or last sale price of a share of Common Stock reported for the Business Day immediately before the date on which Holder delivers this Warrant together with its Notice of Exercise to the Company.  If the Company’s Common Stock is not traded in a Trading Market, the Board of Directors of the Company shall determine the fair market value of a Share in its reasonable good faith judgment.

1.4Delivery of Shares and New Warrant.  Within a reasonable time after Holder exercises this Warrant in the manner set forth in Section 1.1 or 1.2 above, the Company shall deliver to Holder the Shares to be issued to Holder upon such exercise in book-entry position (or, at the Holder’s request, a certificate representing such Shares) and, if this Warrant has not been fully exercised and has not expired, a new warrant of like tenor representing the Shares not so acquired.

1.5Replacement of Warrant.  On receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of this Warrant and, in the case of loss, theft or destruction, on delivery of an indemnity agreement reasonably satisfactory in form, substance and amount to the Company or, in the case of mutilation, on surrender of this Warrant to the Company for cancellation, the Company shall, within a reasonable time, execute and deliver to Holder, in lieu of this Warrant, a new warrant of like tenor and amount.

1.6Treatment of Warrant upon Acquisition of Company.

(a)Acquisition.  For the purpose of this Warrant, “Acquisition” means any transaction or series of related transactions involving:  (i) the sale, lease, exclusive license, or other disposition of all or substantially all of the consolidated assets of the Company and its consolidated subsidiaries, other than a sale, lease, exclusive license or other disposition of all or substantially all of the consolidated assets of the Company and its consolidated subsidiaries to an entity, more than 50% of the combined voting power of the voting securities of which are owned by stockholders of the Company in substantially the same proportions as their ownership of the outstanding voting securities of the Company immediately prior to such sale, lease, exclusive license or other disposition; or (ii) any merger or consolidation of the Company into or with another person or entity (other than a merger or consolidation effected exclusively to change the Company’s domicile), or any other corporate reorganization, in which the stockholders of the 

2

 

Company in their capacity as such immediately prior to such merger, consolidation or reorganization, own less than a majority of the Company’s (or the surviving or successor entity’s) outstanding voting power immediately after such merger, consolidation or reorganization.

(b)Treatment of Warrant at Acquisition.  In the event of an Acquisition in which the consideration to be received by the Company or its stockholders consists solely of cash, solely of Marketable Securities or a combination of cash and Marketable Securities (a “Cash/Public Acquisition”), and the fair market value of one Share as determined in accordance with Section 1.3 above would be greater than the Warrant Price in effect on such date immediately prior to such Cash/Public Acquisition, and Holder has not exercised this Warrant pursuant to Section 1.1 or Section 1.2 above as to all Shares, then this Warrant shall automatically be deemed to be exercised pursuant to Section 1.2 above (a “Cashless Exercise”) as to all Shares for which this Warrant has not previously been exercised, effective immediately prior to and contingent upon the consummation of a Cash/Public Acquisition.  In connection with such Cashless Exercise, Holder shall be deemed to have restated each of the representations and warranties in Section 4 of the Warrant as of the date thereof and the Company shall promptly notify the Holder of the number of Shares (or such other securities) issued upon exercise.  In the event of a Cash/Public Acquisition where the fair market value of one Share as determined in accordance with Section 1.3 above would be less than the Warrant Price in effect immediately prior to such Cash/Public Acquisition, then this Warrant will expire immediately prior to the consummation of such Cash/Public Acquisition.

(c)Upon the closing of any Acquisition other than a Cash/Public Acquisition defined above, the acquiring, surviving or successor entity shall assume the obligations of this Warrant, and this Warrant shall thereafter be exercisable for the same securities and/or other property as would have been paid for the Shares issuable upon exercise of the unexercised portion of this Warrant as if such Shares were outstanding on and as of the closing of such Acquisition, subject to further adjustment from time to time in accordance with the provisions of this Warrant.

(d)As used in this Warrant, “Marketable Securities” means securities meeting all of the following requirements:  (i) the issuer thereof is then subject to the reporting requirements of Section 13 or Section 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and is then current in its filing of all required reports and other information under the Act and the Exchange Act; (ii) the class and series of shares or other security of the issuer that would be received by Holder in connection with the Acquisition were Holder to exercise this Warrant on or prior to the closing thereof is then traded in a Trading Market, and (iii) following the closing of such Acquisition, Holder would not be restricted from publicly re-selling all of the issuer’s shares and/or other securities that would be received by Holder in such Acquisition were Holder to exercise or convert this Warrant in full on or prior to the closing of such Acquisition, except to the extent that any such restriction (x) arises solely under federal or state securities laws, rules or regulations, and (y) does not extend beyond six (6) months from the closing of such Acquisition.

SECTION 2.  ADJUSTMENTS TO THE SHARES AND WARRANT PRICE.

2.1Stock Dividends, Splits, Etc.  If the Company declares or pays a dividend or distribution on the outstanding shares of the Common Stock payable in securities or property (other than cash), then upon exercise of this Warrant, for each Share acquired, Holder shall receive, without additional cost to Holder, the total number and kind of securities and property which Holder would have received 

3

 

had Holder owned the Shares of record as of the date the dividend or distribution occurred.  If the Company subdivides the outstanding shares of the Common Stock by reclassification or otherwise into a greater number of shares, the number of Shares purchasable hereunder shall be proportionately increased and the Warrant Price shall be proportionately decreased.  If the outstanding shares of the Common Stock are combined or consolidated, by reclassification or otherwise, into a lesser number of shares, the Warrant Price shall be proportionately increased and the number of Shares shall be proportionately decreased.

2.2Reclassification, Exchange, Combinations or Substitution.  Upon any event whereby all of the outstanding shares of the Common Stock are reclassified, exchanged, combined, substituted, or replaced for, into, with or by Company securities of a different class and/or series, then from and after the consummation of such event, this Warrant will be exercisable for the number, class and series of Company securities that Holder would have received had the Shares been outstanding on and as of the consummation of such event, and subject to further adjustment thereafter from time to time in accordance with the provisions of this Warrant.  The provisions of this Section 2.2 shall similarly apply to successive reclassifications, exchanges, combinations substitutions, replacements or other similar events.

2.3Intentionally Omitted.

2.4Intentionally Omitted.

2.5No Fractional Share.  No fractional Share shall be issuable upon exercise of this Warrant and the number of Shares to be issued shall be rounded down to the nearest whole Share.  If a fractional Share interest arises upon any exercise of the Warrant, the Company shall eliminate such fractional Share interest by paying Holder in cash the amount computed by multiplying the fractional interest by (i) the fair market value (as determined in accordance with Section 1.3 above) of a full Share, less (ii) the then-effective Warrant Price.

2.6Notice/Certificate as to Adjustments.  Upon each adjustment of the Warrant Price, Common Stock and/or number of Shares, the Company, at the Company’s expense, shall notify Holder in writing within a reasonable time setting forth the adjustments to the Warrant Price, class and/or number of Shares and facts upon which such adjustment is based.  The Company shall, upon written request from Holder, furnish Holder with a certificate of its Chief Financial Officer, including computations of such adjustment and the Warrant Price, class and number of Shares in effect upon the date of such adjustment.

SECTION 3.  REPRESENTATIONS AND COVENANTS OF THE COMPANY.

3.1Representations and Warranties.  The Company represents and warrants to, and agrees with, the Holder as follows:

(a)The initial Warrant Price referenced on the first page of this Warrant is not greater than the lower of (i) the average of the closing price of a share of Common Stock reported on the Trading Market for the 10 consecutive trading days ending immediately prior to the Issue Date, multiplied by 1.1 and (ii) the closing price of a share of Common Stock reported on the Trading Market for the trading day ending immediately prior to the Issue Date, multiplied by 1.1.

(b)All Shares which may be issued upon the exercise of this Warrant, shall, upon issuance, be duly authorized, validly issued, fully paid and non-assessable, and free of any liens and 

4

 

encumbrances except for restrictions on transfer provided for herein or under applicable federal and state securities laws.  The Company covenants that it shall at all times cause to be reserved and kept available out of its authorized and unissued capital stock such number of securities as will be sufficient to permit the exercise in full of this Warrant.

3.2Notice of Certain Events.  If the Company proposes at any time to:

(a)declare any dividend or distribution upon the outstanding shares of the Company’s stock, whether in cash, property, stock, or other securities and whether or not a regular cash dividend;

(b)offer for subscription or sale pro rata to the holders of the outstanding shares any additional shares of any class or series of the Company’s stock (other than pursuant to contractual pre-emptive rights);

(c)effect any reclassification, exchange, combination, substitution, reorganization or recapitalization of the outstanding shares of the Common Stock; or

(d)effect an Acquisition or to liquidate, dissolve or wind up.

then, in connection with each such event, the Company shall give Holder:

(1)in the case of the matters referred to in (a) and (b) above, at least seven (7) Business Days prior written notice of the earlier to occur of the effective date thereof or the date on which a record will be taken for such dividend, distribution, or subscription rights (and specifying the date on which the holders of outstanding shares of the Common Stock will be entitled thereto) or for determining rights to vote, if any,

(2)in the case of the matters referred to in (c) and (d) above at least seven (7) Business Days prior written notice of the date when the same will take place (and specifying the date on which the holders of outstanding shares of Common Stock will be entitled to exchange their shares for the securities or other property deliverable upon the occurrence of such event and such reasonable information as Holder may reasonably require regarding the treatment of this Warrant in connection with such event giving rise to the notice).

Company will also provide information requested by Holder that is reasonably necessary to enable Holder to comply with Holder’s accounting or reporting requirements.

SECTION 4.  REPRESENTATIONS, WARRANTIES OF THE HOLDER.

The Holder represents and warrants to the Company as follows:

4.1Purchase for Own Account.  This Warrant and the Shares to be acquired upon exercise of this Warrant by Holder are being acquired for investment for Holder’s account, not as a nominee or agent, and not with a view to the public resale or distribution within the meaning of the Act.  Holder also represents that it has not been formed for the specific purpose of acquiring this Warrant or the Shares.

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4.2Disclosure of Information.  Holder is aware of the Company’s business affairs and financial condition and has received or has had full access to all the information it considers necessary or appropriate to make an informed investment decision with respect to the acquisition of this Warrant and its underlying securities.  Holder further has had an opportunity to ask questions and receive answers from the Company regarding the terms and conditions of the offering of this Warrant and its underlying securities and to obtain additional information (to the extent the Company possessed such information or could acquire it without unreasonable effort or expense) necessary to verify any information furnished to Holder or to which Holder has access.

4.3Investment Experience.  Holder understands that the purchase of this Warrant and its underlying securities involves substantial risk.  Holder has experience as an investor in securities of companies in a similar stage to the Company and acknowledges that Holder can bear the economic risk of such Holder’s investment in this Warrant and its underlying securities and has such knowledge and experience in financial or business matters that Holder is capable of evaluating the merits and risks of its investment in this Warrant and its underlying securities and/or has a preexisting personal or business relationship with the Company and certain of its officers, directors or controlling persons of a nature and duration that enables Holder to be aware of the character, business acumen and financial circumstances of such persons.

4.4Accredited Investor Status.  Holder is an “accredited investor” within the meaning of Regulation D promulgated under the Act.

4.5The Act.  Holder understands that this Warrant and the Shares issuable upon exercise hereof have not been registered under the Act in reliance upon a specific exemption therefrom, which exemption depends upon, among other things, the bona fide nature of the Holder’s investment intent as expressed herein.  Holder understands that this Warrant and the Shares issued upon any exercise hereof must be held indefinitely unless subsequently registered under the Act and qualified under applicable state securities laws, or unless exemption from such registration and qualification are otherwise available.  Holder is aware of the provisions of Rule 144 promulgated under the Act.

4.6No Voting Rights.  Holder, as a Holder of this Warrant, will not have any voting rights until the exercise of this Warrant.

SECTION 5.  GOVERNING LAW, VENUE, JURY TRIAL WAIVER, AND JUDICIAL REFERENCE.

5.1Governing Law.  This Warrant shall be governed by and construed in accordance with the laws of the State of California, without giving effect to its principles regarding conflicts of law.

5.2Jurisdiction and Venue.  The Company and Holder each submit to the exclusive jurisdiction of the State and Federal courts in Santa Clara County, California; provided, however, that nothing in this Warrant shall be deemed to operate to preclude Holder from bringing suit or taking other legal action in any other jurisdiction to enforce a judgment or other court order in favor of Holder.  The Company expressly submits and consents in advance to such jurisdiction in any action or suit commenced in any such court, and the Company hereby waives any objection that it may have based upon lack of personal jurisdiction, improper venue, or forum non conveniens and hereby consents to the granting of such legal or equitable relief as is deemed appropriate by such court.  The Company hereby waives 

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personal service of the summons, complaints, and other process issued in such action or suit and agrees that service of such summons, complaints, and other process may be made in accordance with Section 6.5 of this Warrant.

5.3Jury Trial Waiver.  TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, THE COMPANY AND HOLDER EACH WAIVE THEIR RIGHT TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION ARISING OUT OF OR BASED UPON THIS WARRANT, THE LOAN AGREEMENT OR ANY CONTEMPLATED TRANSACTION, INCLUDING CONTRACT, TORT, BREACH OF DUTY AND ALL OTHER CLAIMS. THIS WAIVER IS A MATERIAL INDUCEMENT FOR THE PARTIES’ AGREEMENT TO THIS WARRANT.  EACH PARTY HAS REVIEWED THIS WAIVER WITH ITS COUNSEL.

5.4Judicial Reference.  WITHOUT INTENDING IN ANY WAY TO LIMIT THE PARTIES’ AGREEMENT TO WAIVE THEIR RESPECTIVE RIGHT TO A TRIAL BY JURY, if the waiver of the right to a trial by jury in Section 5.3 above is not enforceable, the parties agree that any and all disputes or controversies of any nature between them arising at any time shall be decided by a reference to a private judge, mutually selected by the parties (or, if they cannot agree, by the Presiding Judge of the Santa Clara County, California Superior Court) appointed in accordance with California Code of Civil Procedure Section 638 (or pursuant to comparable provisions of federal law if the dispute falls within the exclusive jurisdiction of the federal courts), sitting without a jury, in Santa Clara County, California; and the parties hereby submit to the jurisdiction of such court.  The reference proceedings shall be conducted pursuant to and in accordance with the provisions of California Code of Civil Procedure §§ 638 through 645.1, inclusive.  The private judge shall have the power, among others, to grant provisional relief, including without limitation, entering temporary restraining orders, issuing preliminary and permanent injunctions and appointing receivers.  All such proceedings shall be closed to the public and confidential and all records relating thereto shall be permanently sealed.  If during the course of any dispute, a party desires to seek provisional relief, but a judge has not been appointed at that point pursuant to the judicial reference procedures, then such party may apply to the Santa Clara County, California Superior Court for such relief.  The proceeding before the private judge shall be conducted in the same manner as it would be before a court under the rules of evidence applicable to judicial proceedings.  The parties shall be entitled to discovery which shall be conducted in the same manner as it would be before a court under the rules of discovery applicable to judicial proceedings.  The private judge shall oversee discovery and may enforce all discovery rules and orders applicable to judicial proceedings in the same manner as a trial court judge.  The parties agree that the selected or appointed private judge shall have the power to decide all issues in the action or proceeding, whether of fact or of law, and shall report a statement of decision thereon pursuant to California Code of Civil Procedure § 644(a).  Nothing in this paragraph shall limit the right of any party at any time to exercise self-help remedies or obtain provisional remedies.  The private judge shall also determine all issues relating to the applicability, interpretation, and enforceability of this paragraph.

5.5Survival.  This Section 5 shall survive the termination of this Warrant.

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SECTION 6.  MISCELLANEOUS.

6.1Term and Automatic Conversion upon Expiration.

(a)Term.  Subject to the provisions of Section 1.6 above, this Warrant is exercisable in whole or in part at any time and from time to time on or before 6:00 PM, Pacific time, on the Expiration Date and shall be void thereafter.

(b)Automatic Cashless Exercise upon Expiration.  In the event that, upon the Expiration Date, the fair market value of one Share (or other security issuable upon the exercise hereof) as determined in accordance with Section 1.3 above is greater than the Warrant Price in effect on such date, then this Warrant shall automatically be deemed on and as of such date to be exercised pursuant to Section 1.2 above as to all Shares (or such other securities) for which it shall not previously have been exercised, and the Company shall, within a reasonable time, deliver to Holder the Shares to be issued upon such exercise in book-entry position (or, at the Holder’s request, a certificate representing such Shares).

6.2Legends.  The Shares (and the securities issuable, directly or indirectly, upon conversion of the Shares, if any) shall be imprinted with a legend in substantially the following form:

THE SHARES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR THE SECURITIES LAWS OF ANY STATE AND, EXCEPT AS SET FORTH IN THAT CERTAIN WARRANT TO PURCHASE COMMON STOCK ISSUED BY THE ISSUER TO SILICON VALLEY BANK DATED JUNE 24, 2020, MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED UNLESS AND UNTIL REGISTERED UNDER SAID ACT AND LAWS OR IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER, SUCH OFFER, SALE, PLEDGE OR OTHER TRANSFER IS EXEMPT FROM SUCH REGISTRATION.

6.3Compliance with Securities Laws on Transfer.  This Warrant and the Shares issuable upon exercise of this Warrant (and the securities issuable, directly or indirectly, upon conversion of the Shares, if any) may not be transferred or assigned in whole or in part except in compliance with applicable federal and state securities laws by the transferor and the transferee (including, without limitation, the delivery of investment representation letters and legal opinions reasonably satisfactory to the Company, as reasonably requested by the Company).  The Company shall not require Holder to provide an opinion of counsel if the transfer is to SVB Financial Group (Silicon Valley Bank’s parent company) or any other affiliate of Silicon Valley Bank, provided that any such transferee is an “accredited investor” as defined in Regulation D promulgated under the Act.  Additionally, the Company shall also not require an opinion of counsel if there is no material question as to the availability of Rule 144 promulgated under the Act.

6.4Transfer Procedure.  After receipt by Silicon Valley Bank of the executed Warrant, Silicon Valley Bank will transfer all of this Warrant to its parent company, SVB Financial Group.  By its acceptance of this Warrant, SVB Financial Group hereby makes to the Company each of the representations and warranties set forth in Section 4 hereof and agrees to be bound by all of the terms and conditions of this Warrant as if the original Holder hereof.  Subject to the provisions of Section 6.3 and 

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upon providing the Company with written notice, SVB Financial Group and any subsequent Holder may transfer all or part of this Warrant or the Shares issuable upon exercise of this Warrant (or the securities issuable directly or indirectly, upon conversion of the Shares, if any) to any transferee, provided, however, in connection with any such transfer, SVB Financial Group or any subsequent Holder will give the Company notice of the portion of the Warrant being transferred with the name, address and taxpayer identification number of the transferee and Holder will surrender this Warrant to the Company for reissuance to the transferee(s) (and Holder if applicable); and provided further, that any subsequent transferee other than SVB Financial Group shall agree in writing with the Company to be bound by all of the terms and conditions of this Warrant.

6.5Notices.  All notices and other communications hereunder from the Company to the Holder, or vice versa, shall be deemed delivered and effective (i) when given personally, (ii) on the third (3rd) Business Day after being mailed by first-class registered or certified mail, postage prepaid, (iii) upon actual receipt if given by facsimile or electronic mail and such receipt is confirmed in writing by the recipient, or (iv) on the first Business Day following delivery to a reliable overnight courier service, courier fee prepaid, in any case at such address as may have been furnished to the Company or Holder, as the case may be, in writing by the Company or such Holder from time to time in accordance with the provisions of this Section 6.5.  All notices to Holder shall be addressed as follows until the Company receives notice of a change of address in connection with a transfer or otherwise:

SVB Financial Group

Attn:  Treasury Department

3003 Tasman Drive, HC 215

Santa Clara, CA 95054

Telephone:  (408) 654-7400

Facsimile:  (408) 988-8317

Email address:  derivatives@svb.com

 

Notice to the Company shall be addressed as follows until Holder receives notice of a change in address:

HTG MOLECULAR DIAGNOSTICS, INC.

Attn: Shaun McMeans

3430 E. Global Loop

Tucson, AZ 85706

Email: smcmeans@htgmolecular.com

 

With a copy (which shall not constitute notice) to:

 

Cooley LLP

Attn: Steven M. Przesmicki

4401 Eastgate Mall

San Diego, CA 92121-1909

Email: przes@cooley.com

 

6.6Waiver.  Notwithstanding any contrary provision herein or in the Loan Agreement, this Warrant and any term hereof may be changed, waived, discharged or terminated (either generally or 

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in a particular instance and either retroactively or prospectively) only by an instrument in writing signed by Holder and any party against which enforcement of such change, waiver, discharge or termination is sought.

6.7Attorneys’ Fees.  In the event of any dispute between the parties concerning the terms and provisions of this Warrant, the party prevailing in such dispute shall be entitled to collect from the other party all costs incurred in such dispute, including reasonable attorneys’ fees.

6.8Counterparts; Facsimile/Electronic Signatures.  This Warrant may be executed in counterparts, all of which together shall constitute one and the same agreement.  Any signature page delivered electronically (including pdf or any electronic signature complying with the U.S. federal ESIGN Act of 2000, the Uniform Electronic Transactions Act or other applicable law, e.g., www.docusign.com) or by facsimile shall be binding to the same extent as an original signature page with regards to any agreement subject to the terms hereof or any amendment thereto. 

6.9Headings.  The headings in this Warrant are for purposes of reference only and shall not limit or otherwise affect the meaning of any provision of this Warrant.

6.10Business Days.  “Business Day” is any day that is not a Saturday, Sunday or a day on which Silicon Valley Bank is not open for business.

[Remainder of page left blank intentionally]
[Signature page follows]

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IN WITNESS WHEREOF, the parties have caused this Warrant to Purchase Common Stock to be executed by their duly authorized representatives effective as of the Issue Date written above.

				
	
“COMPANY”
	
 
	
 

	
 
	
 
	
 

	
HTG MOLECULAR DIAGNOSTICS, INC.
	
 
	
 

	
 
	
 
	
 

	
 
	
 
	
 

	
By:  /s/ John Lubniewski
	
 
	
 

	
 
	
 
	
 

	
Name: John Lubniewski
	
 
	
 

	
 
	
 
	
 

	
Title: Chief Executive Officer
	
 
	
 

	
 
	
 
	
 

	
 
	
 
	
 

	
 
	
 
	
 

	
“HOLDER”
	
 
	
 

	
 
	
 
	
 

	
SILICON VALLEY BANK
	
 
	
 

	
 
	
 
	
 

	
 
	
 
	
 

	
By: /s/ Kevin Fleischman
	
 
	
 

	
 
	
 
	
 

	
Name: Kevin Fleischman
	
 
	
 

	
 
	
 
	
 

	
Title: Director
	
 
	
 

	
 
	
 
	
 

	
 
	
 
	
 

	
 
	
 
	
 

	
 
	
 
	
	
 
	
 
	
	
 
	
 
	
	
 
	
 
	
	
 
	
 
	
	
 
	
 
	

 

 

 

APPENDIX 1

NOTICE OF EXERCISE OF WARRANT

	
1.
	
The undersigned Holder hereby exercises its right to purchase ___________ shares of the Common Stock of __________________ (the “Company”) in accordance with the attached Warrant to Purchase Common Stock, and tenders payment of the aggregate Warrant Price for such shares as follows:

	
 
	
[    ]
	
check in the amount of $________ payable to the order of the Company enclosed herewith

	
 
	
[    ]
	
Wire transfer of immediately available funds to the Company’s account

	
 
	
[    ]
	
Cashless Exercise pursuant to Section 1.2 of the Warrant

	
 
	
[    ]
	
Other [Describe] __________________________________________

	
2.
	
Please issue a certificate or certificates representing the Shares in the name specified below:

___________________________________________

Holder’s Name

 

 

___________________________________________

 

___________________________________________

(Address)

 

	
3.
	
By its execution below and for the benefit of the Company, Holder hereby restates each of the representations and warranties in Section 4 of the Warrant to Purchase Common Stock as of the date hereof.

			
	
 
	
 
	
HOLDER:

	
 
	
 
	
 

	
 
	
 
	
 

	
 
	
 
	
 

	
 
	
 
	
 

	
 
	
 
	
By:

	
 
	
 
	
 

	
 
	
 
	
Name:

	
 
	
 
	
 

	
 
	
 
	
Title:

	
 
	
 
	
 

	
 
	
 
	
(Date):

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