Document:

Standby Equity Distribution Agreement

     

    Exhibit
      10.1

     

    STANDBY
      EQUITY DISTRIBUTION AGREEMENT

     

    THIS
      AGREEMENT
      dated as
      of the 14th
      day of
      June 2006 (the “Agreement”)
      between CORNELL
      CAPITAL PARTNERS, LP,
      a
      Delaware limited partnership (the “Investor”),
      and
ACACIA
      RESEARCH CORPORATION,
      a
      Delaware corporation (the “Company”).

     

    WHEREAS,
      the
      parties desire that, upon the terms and subject to the conditions contained
      herein, the Company shall issue and sell to the Investor, from time to time
      as
      provided herein, and the Investor shall purchase from the Company up to Fifty
      Million Dollars ($50,000,000) of newly issued shares of the Company’s
      Acacia Research - CombiMatrix common stock, par value $.001 per share (the
      “Common
      Stock”);
      and

     

    WHEREAS,
      the
      offer and sale of the shares of Common Stock issuable hereunder have been
      registered by the Company in the Registration Statement on Form S-3 filed with
      the U.S. Securities and Exchange Commission (the “SEC”),
      which
      has been declared effective by the SEC under the Securities Act of 1933 (the
      “Securities
      Act”).

     

    NOW,
      THEREFORE,
      the
      parties hereto agree as follows:

     

    ARTICLE
      I.

    Certain
      Definitions

     

    Section
      1.1. “Advance”
shall
      mean the portion of the Commitment Amount requested by the Company in the
      Advance Notice given to the Investor from time to time.

     

    Section
      1.2. “Advance
      Date”
shall
      mean the first (1st)
      Trading
      Day after expiration of the applicable Pricing Period for each
      Advance.

     

    Section
      1.3. “Advance
      Notice”
shall
      mean a written notice in the form of Exhibit
      A
      attached
      hereto to the Investor executed by an officer of the Company and setting forth
      the Advance amount that the Company requests from the Investor in connection
      with each Advance requested by the Company.

     

    Section
      1.4. “Advance
      Notice Date”
shall
      mean each date the Company delivers (in accordance with Section 2.2(b) of this
      Agreement) to the Investor an Advance Notice requiring the Investor to advance
      funds to the Company, subject to the terms of this Agreement. No Advance Notice
      Date shall be less than five (5) Trading Days after the prior Advance Notice
      Date.

     

    Section
      1.5. “Base
      Prospectus”
shall
      mean the Company’s prospectus accompanying the Registration Statement.

     

    Section
      1.6. “Bid
      Price”
shall
      mean, on any date, the closing bid price (as reported by Bloomberg L.P.) of
      the
      Common Stock on the Principal Market or if the Common Stock is not traded on
      a
      Principal Market, the highest reported bid price for the Common Stock, as
      furnished by the National Association of Securities Dealers, Inc.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Section
      1.7. “Closing”
shall
      mean one of the closings of a purchase and sale of Common Stock pursuant to
      Section 2.3.

     

    Section
      1.8. “CombiMatrix”
shall
      mean CombiMatrix Corporation, a wholly owned subsidiary of the
      Company.

     

    Section
      1.9. “Commitment
      Amount”
shall
      mean the aggregate amount of Fifty Million Dollars ($50,000,000) which the
      Investor has agreed to provide to the Company in order to purchase the Shares
      of
      Common Stock pursuant to the terms and conditions of this Agreement,
provided
      that,
      the Company shall not effect any sale under this Agreement and the Investor
      shall not have the right or the obligation to purchase Shares of Common Stock
      under this Agreement to the extent that after giving effect to such purchase
      and
      sale the aggregate number of shares issued under this Agreement would exceed
      13,368,674 shares of the Company’s capital stock regardless of class (which is
      less than 20% of the 66,876,811 outstanding shares of the Company’s capital
      stock regardless of class as of the date of this Agreement) unless or until
      the
      Company obtains any necessary shareholder approval or consent in accordance
      with
      Nasdaq rules prior to such issuance. 

     

    Section
      1.10. “Commitment
      Period”
shall
      mean the period commencing on the earlier to occur of (i) the Effective Date,
      or
      (ii) such earlier date as the Company and the Investor may mutually agree in
      writing, and expiring on the earliest to occur of (x) the date on which the
      Investor shall have made payment of Advances pursuant to this Agreement in
      the
      aggregate amount of the Commitment Amount, (y) the date this Agreement is
      terminated pursuant to Section 10.2 or (z) the date occurring twenty-four (24)
      months after the Effective Date.

     

    Section
      1.11. “Common
      Stock”
shall
      mean shares of the Company’s Acacia Research - CombiMatrix common stock, par
      value $.001 per share.

     

    Section
      1.12. “Damages”
shall
      mean any loss, claim, damage, liability, reasonable costs and expenses
      (including, without limitation, reasonable attorney’s fees and disbursements and
      costs and expenses of expert witnesses and investigation).

     

    Section
      1.13. “Effective
      Date”
shall
      mean the date of execution of this Agreement. 

     

    Section
      1.14. Intentionally
      Omitted.

     

    Section
      1.15. “Exchange
      Act”
shall
      mean the Securities Exchange Act of 1934, as amended, and the rules and
      regulations promulgated thereunder.

     

    Section
      1.16. “Material
      Adverse Effect”
shall
      mean any condition, circumstance, or situation that prohibits or otherwise
      materially interferes with the ability of the Company to enter into and perform
      any of its obligations under this Agreement in any material
      respect.

     

    Section
      1.17. “Market
      Price”
shall
      mean the lowest daily VWAP of the Common Stock during the Pricing
      Period.

     

    Section
      1.18. “Maximum
      Advance Amount”
shall
      be Five Million Dollars ($5,000,000) per Advance Notice, subject to the
      limitations set forth in Section 1.8 of this Agreement. 

     

    
      
        
        

      

      
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    Section
      1.19. “Minimum
      Acceptable Price”
shall
      mean the lowest price at which the Company is obligated to sell Shares during
      the applicable Pricing Period set forth in the Advance Notice (not taking into
      account any discount used to calculate the Purchase Price).

     

    Section
      1.20. “NASD”
shall
      mean the National Association of Securities Dealers, Inc.

     

    Section
      1.21. “Person”
shall
      mean an individual, a corporation, a partnership, an association, a trust or
      other entity or organization, including a government or political subdivision
      or
      an agency or instrumentality thereof.

     

    Section
      1.22. “Pricing
      Period”
shall
      mean the five (5) consecutive Trading Days after the Advance Notice Date,
      subject to any reduction pursuant to Section
      2.2(c).

     

    Section
      1.23. “Prospectus”
shall
      mean the Base Prospectus, as supplemented by any Prospectus Supplement.

     

    Section
      1.24. “Prospectus
      Supplement”
shall
      mean any prospectus supplement to the Base Prospectus filed with the SEC
      pursuant to Rule 424(b) under the Securities Act, including, without limitation,
      the Prospectus Supplement required pursuant to Section
      6.7
      hereof.

     

    Section
      1.25. “Principal
      Market”
shall
      mean the following markets or exchanges on which the Common Stock is listed
      or
      quoted for trading on the date in question: the Nasdaq National Market, the
      Nasdaq Capital Market, the New York Stock Exchange, the American Stock Exchange,
      or the OTC Bulletin Board, whichever is at the time the principal trading
      exchange or market for the Common Stock.

     

    Section
      1.26. “Purchase
      Price”
shall
      be set at ninety seven and one half percent (97.5%) of the Market Price during
      the applicable Pricing Period.

     

    Section
      1.27. “Registration
      Statement”
shall
      mean the Company’s shelf-registration statement on Form S-3, SEC File Number
      333-133529, filed by the Company with the SEC under the Securities Act for
      the
      registration of the Common Stock, as such Registration Statement may be amended
      and supplemented from time to time.

     

    Section
      1.28. “SEC”
shall
      mean the United States Securities and Exchange Commission.

     

    Section
      1.29. “Securities
      Act”
shall
      have the meaning set forth in the recitals of this Agreement.

     

    Section
      1.30. “SEC
      Documents”
shall
      mean Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current
      Reports on Form 8-K and Proxy Statements of the Company as supplemented to
      the
      date hereof, filed by the Company for a period of at least twelve (12) months
      immediately preceding the date hereof or the Advance Date, as the case may
      be,
      until such time as the Company no longer has an obligation to maintain the
      effectiveness of the Registration Statement.

     

    Section
      1.31. “Shares”
shall
      mean the shares of Common Stock to be issued hereunder pursuant
      to Advances. 

     

    
      
        
        

      

      
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    Section
      1.32. “Subsidiary”
      or “Subsidiaries” shall
      mean a subsidiary or subsidiaries of CombiMatrix.

     

    Section
      1.33.“Trading
      Day”
shall
      mean any day during which the New York Stock Exchange shall be open for
      business.

     

    Section
      1.34. “VWAP”
shall
      mean the volume weighted average price of the Common Stock as quoted by
      Bloomberg, LP.

     

    ARTICLE
      II.

    Advances

     

    Section
      2.1. Advances.

     

    Subject
      to the terms and conditions of this Agreement (including, without limitation,
      the provisions of Article VII hereof), the Company, at its sole and exclusive
      option, may issue and sell to the Investor, and the Investor shall purchase
      from
      the Company, shares of Common Stock by the delivery, in the Company’s sole
      discretion, of one or more Advance Notices to the Investor. The number of shares
      of Common Stock that the Investor shall purchase pursuant to each Advance Notice
      shall be determined by dividing the amount of the Advance by the Purchase Price.
      No fractional shares shall be issued. Fractional shares shall be rounded to
      the
      next higher whole number of shares. The Advance Notice shall specify the Advance
      amount requested and establish the Minimum Acceptable Price for such Advance
      Notice.

     

    Section
      2.2. Mechanics.

     

    (a) Advance
      Notice.
      At any
      time during the Commitment Period, the Company may require the Investor to
      purchase shares of Common Stock by delivering an Advance Notice to the Investor,
      subject to the conditions set forth in Article VII; provided, however, the
      amount of each Advance as designated by the Company in the applicable Advance
      Notice shall not be more than the Maximum Advance Amount and the aggregate
      amount of the Advances actually paid by Investor to the Company pursuant to
      this
      Agreement shall not exceed the Commitment Amount. The Company acknowledges
      that
      the Investor may sell shares of the Common Stock corresponding with a particular
      Advance Notice after the Advance Notice is received by the Investor. There
      shall
      be a minimum of five (5) Trading Days between each Advance Notice
      Date.

     

    (b) Date
      of Delivery of Advance Notice.
      An
      Advance Notice shall be deemed delivered on (i) the Trading Day it is received
      by facsimile or otherwise by the Investor if such notice is received prior
      to
      5:00 pm Eastern Time, or (ii) the immediately succeeding Trading Day if it
      is
      received by facsimile or otherwise after 5:00 pm Eastern Time on a Trading
      Day
      or at any time on a day which is not a Trading Day. No Advance Notice may be
      deemed delivered on a day that is not a Trading Day. 

     

    (c) Below
      Minimum Acceptable Price. If
      the
      VWAP for the Common Stock on any Trading Day in a Pricing Period is lower than
      the Minimum Acceptable Price, then for each such Trading Day, the total amount
      of the Advance requested by the Company corresponding to such Pricing Period
      shall be automatically reduced by Twenty Percent (20%) and each such Trading
      Day
      shall be excluded from the Pricing Period for purposes of determining the Market
      Price. The number of shares of Common Stock to be delivered to the Investor
      at
      the Closing (in accordance with Section 2.3 of this Agreement) shall correspond
      with the Advance Notice amount as reduced pursuant to this Section 2.2, except
      that the Company shall be obligated to sell, and the Investor shall be obligated
      to purchase that number of Shares of Common Stock corresponding to such Advance
      Notice that have been sold by the Investor during the applicable Pricing Period
      in an amount not to exceed the number of shares specified in the Advance Notice
      during the applicable Pricing Period and such shares shall be priced at the
      greater
      of the
      Purchase Price or applicable Minimum Acceptable Price. 

     

    
      
        
        

      

      
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    Section
      2.3. Closings.
      On each
      Advance Date the Company shall deliver the Shares purchased by the Investor
      to
      the Investor (free of restrictive legend) against simultaneous payment therefor
      to the Company’s designated account by wire transfer of immediately available
      funds provided that if the Shares are received by Investor later than 1:00
      p.m.
      (New York time) payment shall be made with next day funds. In addition, on
      or
      prior to the Advance Date, each of the Company and the Investor shall deliver
      to
      the other all documents, instruments and writings required to be delivered
      by
      either of them pursuant to this Agreement in order to implement and effect
      the
      transactions contemplated herein. To the extent the Company has not paid the
      fees, expenses, and disbursements of the Investor in accordance with Section
      12.4, the amount of such fees, expenses, and disbursements may be deducted
      by
      the Investor (and shall be paid to the relevant party) directly out of the
      proceeds of the Advance with no reduction in the amount of shares of the Common
      Stock to be delivered on such Advance Date. 

     

    Section
      2.4. Hardship.
      In the
      event the Investor sells shares of the Common Stock after receipt of an Advance
      Notice and the Company fails to perform its obligations as mandated in Section
      2.3, and specifically the Company fails to deliver to the Investor on the
      Advance Date the shares of Common Stock corresponding to the applicable Advance
      pursuant to Section 2.3(i), the Company acknowledges that the Investor may
      suffer financial hardship and therefore shall be liable for any and all losses,
      commissions, fees, or financial hardship caused to the Investor.

     

    Section
      2.5. Current
      Report.
      Within
      four (4) business days after the Effective Date (and prior to the Company
      delivering an Advance Notice to the Investor hereunder), the Company shall
      file
      with the SEC a report on Form 8-K relating to the transactions contemplated
      by,
      and describing the material terms and conditions of, this Agreement, and to
      the
      extent not included in a Prospectus Supplement, disclosing all information
      relating to the transactions contemplated hereby required to be disclosed in
      the
      Registration Statement and Base Prospectus, including, without limitation,
      information required to be disclosed in the section captioned “Plan of
      Distribution” and “Risk Factors” in the Base Prospectus (the “Current
      Report”).
      Prior
      to filing the Current Report with the SEC, the Company shall provide the
      Investor a reasonable opportunity to comment on a draft of such Current Report
      and shall give due consideration to such comments. 

     

    ARTICLE
      III.

    Representations
      and Warranties of Investor

     

    Investor
      hereby represents and warrants to, and agrees with, the Company that the
      following are true and correct as of the date hereof and as of each Advance
      Date:

     

    
      
        
        

      

      
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    Section
      3.1. Organization
      and Authorization.
      The
      Investor is duly incorporated or organized and validly existing in the
      jurisdiction of its incorporation or organization and has all requisite power
      and authority to purchase and hold the securities issuable hereunder. The
      decision to invest and the execution and delivery of this Agreement by such
      Investor, the performance by such Investor of its obligations hereunder and
      the
      consummation by such Investor of the transactions contemplated hereby have
      been
      duly authorized and requires no other proceedings on the part of the Investor.
      The undersigned has the right, power and authority to execute and deliver this
      Agreement and all other instruments, on behalf of the Investor. This Agreement
      has been duly executed and delivered by the Investor and, assuming the execution
      and delivery hereof and acceptance thereof by the Company, will constitute
      the
      legal, valid and binding obligations of the Investor, enforceable against the
      Investor in accordance with its terms.

     

    Section
      3.2. Evaluation
      of Risks.
      The
      Investor has such knowledge and experience in financial, tax and business
      matters as to be capable of evaluating the merits and risks of, and bearing
      the
      economic risks entailed by, an investment in the Company and of protecting
      its
      interests in connection with this transaction. It recognizes that its investment
      in the Company involves a high degree of risk.

     

    Section
      3.3. No
      Legal Advice From the Company.
      The
      Investor acknowledges that it had the opportunity to review this Agreement
      and
      the transactions contemplated by this Agreement with his or its own legal
      counsel and investment and tax advisors. The Investor is relying solely on
      such
      counsel and advisors and not on any statements or representations of the Company
      or any of its representatives or agents for legal, tax or investment advice
      with
      respect to this investment, the transactions contemplated by this Agreement
      or
      the securities laws of any jurisdiction.

     

    Section
      3.4. Not
      an
      Affiliate.
      The
      Investor is not an officer, director or a person that directly, or indirectly
      through one or more intermediaries, controls or is controlled by, or is under
      common control with the Company or any “Affiliate”
of
      the
      Company (as that term is defined in Rule 405 of the Securities Act).

     

    Section
      3.5. Trading
      Activities.
      The
      Investor’s trading activities with respect to the Common Stock shall be in
      compliance with all applicable federal and state securities laws, rules and
      regulations and the rules and regulations of the Principal Market on which
      the
      Common Stock is listed or traded. Neither
      the Investor nor its affiliates has an open short position in the Common Stock
      of the Company, the Investor agrees that it shall not, and that it will cause
      its affiliates not to, engage in any short sales of or hedging transactions
      with
      respect to the Common Stock, provided
      that the
      Company acknowledges and agrees that upon receipt of an Advance Notice the
      Investor has the right to sell the shares to be issued to the Investor pursuant
      to the Advance Notice
      during
      the applicable Pricing Period. 

     

    Section
      3.6. Proposed
      Split-Off.
      Investor represents and warrants that it has reviewed the Company’s current
      report on Form 8-K filed with the SEC on January 9, 2006, and the press release
      included therewith as Exhibit 99.1, wherein the Company disclosed that its
      Board
      of Directors has approved the split-off of CombiMatrix Corporation by redeeming
      all of the issued and outstanding shares of CombiMatrix Stock for all of the
      outstanding shares of common stock of CombiMatrix Corporation. Investor
      acknowledges that the Securities to be purchased by Investor may be exchanged
      for shares of common stock of CombiMatrix Corporation upon terms and conditions
      contained in the Company’s Articles of Incorporation, as amended from time to
      time, in the Company’s sole and absolute discretion.

     

    
      
        
        

      

      
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    ARTICLE
      IV.

    Representations
      and Warranties of the Company

     

    Except
      as
      stated below, on the disclosure schedules attached hereto or in the SEC
      Documents (as defined herein), the Company hereby represents and warrants to,
      and covenants with, the Investor that the following are true and correct as
      of
      the date hereof:

     

    Section
      4.1. Organization
      and Qualification.
      The
      Company is duly incorporated or organized and validly existing in the
      jurisdiction of its incorporation or organization and has all requisite
      corporate power to own its properties and to carry on its business as now being
      conducted. Each of the Company, CombiMatrix and its Subsidiaries, is duly
      qualified as a foreign corporation to do business and is in good standing in
      every jurisdiction in which the nature of the business conducted by it makes
      such qualification necessary, except to the extent that the failure to be so
      qualified or be in good standing would not have a Material Adverse Effect on
      the
      Company and its subsidiaries taken as a whole.

     

    Section
      4.2. Authorization,
      Enforcement, Compliance with Other Instruments.
      (i) The
      Company has the requisite corporate power and authority to enter into and
      perform this Agreement, and any related agreements, in accordance with the
      terms
      hereof and thereof, (ii) the execution and delivery of this Agreement, and
      any
      related agreements by the Company and the consummation by it of the transactions
      contemplated hereby and thereby, have been duly authorized by the Company’s
      Board of Directors and no further consent or authorization is required by the
      Company, its Board of Directors or its stockholders, (iii) this Agreement,
      and any related agreements have been duly executed and delivered by the Company,
      (iv) this Agreement, and assuming the execution and delivery thereof and
      acceptance by the Investor and any related agreements constitute the valid
      and
      binding obligations of the Company enforceable against the Company in accordance
      with their terms, except as such enforceability may be limited by general
      principles of equity or applicable bankruptcy, insolvency, reorganization,
      moratorium, liquidation or similar laws relating to, or affecting generally,
      the
      enforcement of creditors’ rights and remedies.

     

    Section
      4.3. Capitalization.
      The
      authorized capital stock of the Company and the shares thereof issued and
      outstanding as of the Effective Date are as set forth in the 2005 Form 10k
      or on
      Schedule 4.3 attached hereto. All of such outstanding shares have been validly
      issued and are fully paid and nonassessable. Except as disclosed in the SEC
      Documents or on Schedule 4.3 attached hereto, no shares of Common Stock are
      subject to preemptive rights or any other similar rights or any liens or
      encumbrances suffered or permitted by the Company. Except as disclosed in the
      SEC Documents, as of the date hereof, (i) there are no outstanding options,
      warrants, scrip, rights to subscribe to, calls or commitments of any character
      whatsoever relating to, or securities or rights convertible into, any shares
      of
      Common Stock or any of its Subsidiaries, or contracts, commitments,
      understandings or arrangements by which CombiMatrix or any of its Subsidiaries
      is or may become bound to issue additional shares of Common Stock or any of
      its
      Subsidiaries or options, warrants, scrip, rights to subscribe to, calls or
      commitments of any character whatsoever relating to, or securities or rights
      convertible into, any shares of Common Stock or any of its Subsidiaries, (ii)
      there are no outstanding debt securities (iii) there
      are no outstanding registration statements other than on Form S-8 and the
      Registration Statement and (iv) there are no agreements or arrangements under
      which CombiMatrix or any of its Subsidiaries is obligated to register the sale
      of any of their securities under the Securities Act. There are no securities
      or
      instruments containing anti-dilution or similar provisions that will be
      triggered by this Agreement or any related agreement or the consummation of
      the
      transactions described herein or therein. The Company has furnished to the
      Investor true and correct copies of the Company’s Certificate of Incorporation,
      as amended and as in effect on the date hereof (the “Certificate
      of Incorporation”),
      and
      the Company’s By-laws, as in effect on the date hereof (the “By-laws”),
      and
      the terms of all securities convertible into or exercisable for Common Stock
      and
      the material rights of the holders thereof in respect thereto.

     

    
      
        
        

      

      
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    Section
      4.4. No
      Conflict.
      The
      execution, delivery and performance of this Agreement by the Company and the
      consummation by the Company of the transactions contemplated hereby will not
      (i)
      result in a violation of the Certificate of Incorporation, any certificate
      of
      designations of any outstanding series of preferred stock of the Company or
      By-laws or (ii) conflict with or constitute a default (or an event which with
      notice or lapse of time or both would become a default) under, or give to others
      any rights of termination, amendment, acceleration or cancellation of, any
      agreement, indenture or instrument to which the Company or any of its
      subsidiaries is a party, or result in a violation of any law, rule, regulation,
      order, judgment or decree (including federal and state securities laws and
      regulations and the rules and regulations of the Principal Market on which
      the
      Common Stock is quoted) applicable to the Company or any of its subsidiaries
      or
      by which any material property or asset of the Company or any of its
      subsidiaries is bound or affected and which would cause a Material Adverse
      Effect. Except as disclosed in the SEC Documents, neither the Company nor its
      subsidiaries is in violation of any term of or in default under its Articles
      of
      Incorporation or By-laws or their organizational charter or by-laws,
      respectively, or any material contract, agreement, mortgage, indebtedness,
      indenture, instrument, judgment, decree or order or any statute, rule or
      regulation applicable to the Company or its subsidiaries. The business of the
      Company and its subsidiaries is not being conducted in violation of any material
      law, ordinance, regulation of any governmental entity. Except as specifically
      contemplated by this Agreement and as required under the Securities Act and
      any
      applicable state securities laws, the Company is not required to obtain any
      consent, authorization or order of, or make any filing or registration with,
      any
      court or governmental agency in order for it to execute, deliver or perform
      any
      of its obligations under or contemplated by this Agreement in accordance with
      the terms hereof or thereof. All consents, authorizations, orders, filings
      and
      registrations which the Company is required to obtain pursuant to the preceding
      sentence have been obtained or effected on or prior to the date hereof. The
      Company and its subsidiaries are unaware of any fact or circumstance which
      might
      give rise to any of the foregoing.

     

    Section
      4.5. SEC
      Documents; Financial Statements.
      The
      Company has filed all reports, schedules, forms, statements and other documents
      required to be filed by it with the SEC under the Exchange Act since January
      1,
      2004. The Company has delivered to the Investor or its representatives, or
      made
      available through the SEC’s website at http://www.sec.gov, true and complete
      copies of the SEC Documents. As of their respective dates, the financial
      statements of the Company disclosed in the SEC Documents (the “Financial
      Statements”)
      complied as to form in all material respects with applicable accounting
      requirements and the published rules and regulations of the SEC with respect
      thereto. Such financial statements have been prepared in accordance with
      generally accepted accounting principles, consistently applied, during the
      periods involved (except (i) as may be otherwise indicated in such financial
      statements or the notes thereto, or (ii) in the case of unaudited interim
      statements, to the extent they may exclude footnotes or may be condensed or
      summary statements) and, fairly present in all material respects the financial
      position of the Company as of the dates thereof and the results of its
      operations and cash flows for the periods then ended (subject, in the case
      of
      unaudited statements, to normal year-end audit adjustments). No other
      information provided by or on behalf of the Company to the Investor which is
      not
      included in the SEC Documents contains any untrue statement of a material fact
      or omits to state any material fact necessary in order to make the statements
      therein, in the light of the circumstances under which they were made, not
      misleading.

     

    
      
        
        

      

      
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    Section
      4.6. 10b-5.
      The SEC
      Documents do not include any untrue statements of material fact, nor do they
      omit to state any material fact required to be stated therein necessary to
      make
      the statements made, in light of the circumstances under which they were made,
      not misleading.

     

    Section
      4.7. No
      Default.
      Except
      as disclosed in the SEC Documents, the Company is not in default in the
      performance or observance of any material obligation, agreement, covenant or
      condition contained in any indenture, mortgage, deed of trust or other material
      instrument or agreement to which it is a party or by which it is or its property
      is bound and neither the execution, nor the delivery by the Company, nor the
      performance by the Company of its obligations under this Agreement or any of
      the
      exhibits or attachments hereto will conflict with or result in the breach or
      violation of any of the terms or provisions of, or constitute a default or
      result in the creation or imposition of any lien or charge on any assets or
      properties of the Company under its Certificate of Incorporation, By-Laws,
      any
      material indenture, mortgage, deed of trust or other material agreement
      applicable to the Company or instrument to which the Company is a party or
      by
      which it is bound, or any statute, or any decree, judgment, order, rules or
      regulation of any court or governmental agency or body having jurisdiction
      over
      the Company or its properties, in each case which default, lien or charge is
      likely to cause a Material Adverse Effect on the Company’s business or financial
      condition.

     

    Section
      4.8. Absence
      of Events of Default.
      Except
      for matters described in the SEC Documents and/or this Agreement, no Event
      of
      Default, as defined in the respective agreement to which the Company is a party,
      and no event which, with the giving of notice or the passage of time or both,
      would become an Event of Default (as so defined), has occurred and is
      continuing, which would have a Material Adverse Effect on the Company’s
      business, properties, prospects, financial condition or results of
      operations.

     

    Section
      4.9. Intellectual
      Property Rights.
      CombiMatrix and
      its
      Subsidiaries own, possess, license or have other rights to use all foreign
      and
      domestic patents, patent applications, trade and service marks, trade and
      service mark registrations, trade names, copyrights, licenses, inventions,
      trade
      secrets, technology, Internet domain names, know-how and other intellectual
      property, necessary for the conduct of CombiMatrix Group's (as defined in the
      Prospectus) businesses as now conducted or as proposed in the Prospectus to
      be
      conducted (collectively, the "INTELLECTUAL PROPERTY"). Except as set forth
      in
      the Prospectus, (a) the Company or CombiMatrix have not received written notice,
      and has no knowledge of, any rights of third parties to any such Intellectual
      Property; (b) to the Company's or CombiMatrix’s knowledge, there is no
      infringement by third parties of any such Intellectual Property; (c) there
      is no
      pending or, to the Company's or CombiMatrix’s knowledge, threatened action,
      suit, proceeding or claim by others challenging the Company's and its
      Subsidiaries' rights in or to any such Intellectual Property; (d) there is
      no
      pending or, to the Company's or CombiMatrix’s knowledge, threatened action,
      suit, proceeding or claim by others challenging the validity or scope of any
      such Intellectual Property; (e) there is no pending or, to the Company's or
      CombiMatrix’s knowledge, threatened action, suit, proceeding or claim by others
      that the Company and its Subsidiaries infringe or otherwise violate any patent,
      trademark, copyright, trade secret or other proprietary rights of others; (f)
      to
      the Company's or CombiMatrix’s knowledge, there is no third-party U.S. patent or
      published U.S. patent application which contains claims for which an
      Interference Proceeding (as defined in 35 U.S.C. ss. 135) has been commenced
      against any patent or patent application which constitutes the Intellectual
      Property described in the Prospectus; and (g) the Company, CombiMatrix and
      its
      Subsidiaries have taken all steps necessary to perfect its ownership of the
      Intellectual Property, in each of clauses (a)-(g) except for such infringement,
      conflict or action which would not, singularly or in the aggregate, reasonably
      be expected to result in a Material Adverse Effect. 

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

    Section
      4.10. Employee
      Relations.
      Neither
      the Company nor any of its subsidiaries is involved in any labor dispute nor,
      to
      the knowledge of the Company or any of its subsidiaries, is any such dispute
      threatened. None of the Company’s or its subsidiaries’ employees is a member of
      a union and the Company and its subsidiaries believe that their relations with
      their employees are good.

     

    Section
      4.11. Environmental
      Laws.
      To the
      best of its knowledge, the Company and its subsidiaries are (i) in compliance
      with any and all applicable material foreign, federal, state and local laws
      and
      regulations relating to the protection of human health and safety, the
      environment or hazardous or toxic substances or wastes, pollutants or
      contaminants (“Environmental
      Laws”),
      (ii)
      have received all permits, licenses or other approvals required of them under
      applicable Environmental Laws to conduct their respective businesses and (iii)
      are in compliance with all terms and conditions of any such permit, license
      or
      approval.

     

    Section
      4.12. Title.
      Except
      as set forth in the SEC Documents, the Company has good and marketable title
      to
      its properties and material assets owned by it, free and clear of any pledge,
      lien, security interest, encumbrance, claim or equitable interest other than
      such as are not material to the business of the Company. Any real property
      and
      facilities held under lease by the Company and its subsidiaries are held by
      them
      under valid, subsisting and enforceable leases with such exceptions as are
      not
      material and do not interfere with the use made and proposed to be made of
      such
      property and buildings by the Company and its subsidiaries.

     

    Section
      4.13. Insurance.
      The
      Company and each of its subsidiaries are insured by insurers of recognized
      financial responsibility against such losses and risks and in such amounts
      as
      management of the Company believes to be prudent and customary in the businesses
      in which the Company and its subsidiaries are engaged. Neither the Company
      nor
      any such subsidiary has been refused any insurance coverage sought or applied
      for and neither the Company nor any such subsidiary has any reason to believe
      that it will not be able to renew its existing insurance coverage as and when
      such coverage expires or to obtain similar coverage from similar insurers as
      may
      be necessary to continue its business at a cost that would not materially and
      adversely affect the condition, financial or otherwise, or the earnings,
      business or operations of the Company and its subsidiaries, taken as a
      whole.

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

    Section
      4.14. Regulatory
      Permits.
      To the
      best of its knowledge, the Company and its subsidiaries possess all material
      certificates, authorizations and permits issued by the appropriate federal,
      state or foreign regulatory authorities necessary to conduct their respective
      businesses, and neither the Company nor any such subsidiary has received any
      notice of proceedings relating to the revocation or modification of any such
      certificate, authorization or permit.

     

    Section
      4.15. Internal
      Accounting Controls.
      The
      Company and each of its subsidiaries maintain a system of internal accounting
      controls sufficient to provide reasonable assurance that (i) transactions are
      executed in accordance with management’s general or specific authorizations,
      (ii) transactions are recorded as necessary to permit preparation of financial
      statements in conformity with generally accepted accounting principles and
      to
      maintain asset accountability, (iii) access to assets is permitted only in
      accordance with management’s general or specific authorization and (iv) the
      recorded accountability for assets is compared with the existing assets at
      reasonable intervals and appropriate action is taken with respect to any
      differences.

     

    Section
      4.16. No
      Material Adverse Breaches, etc.
      Except
      as set forth in the SEC Documents, neither the Company nor any of its
      subsidiaries is subject to any charter, corporate or other legal restriction,
      or
      any judgment, decree, order, rule or regulation which in the judgment of the
      Company’s officers has or is expected in the future to have a Material Adverse
      Effect on the business, properties, operations, financial condition, results
      of
      operations or prospects of the Company or its subsidiaries. Except as set forth
      in the SEC Documents, neither the Company nor any of its subsidiaries is in
      breach of any contract or agreement which breach, in the judgment of the
      Company’s officers, has or is expected to have a Material Adverse Effect on the
      business, properties, operations, financial condition, results of operations
      or
      prospects of the Company or its subsidiaries.

     

    Section
      4.17. Absence
      of Litigation.
      Except
      as set forth in the SEC Documents or in Schedule 4.17 attached hereto, there
      is
      no action, suit, proceeding, inquiry or investigation before or by any court,
      public board, government agency, self-regulatory organization or body pending
      against or affecting CombiMatrix, the Common Stock or any Subsidiaries, wherein
      an unfavorable decision, ruling or finding would (i) have a Material Adverse
      Effect on the transactions contemplated hereby (ii) adversely affect the
      validity or enforceability of, or the authority or ability of CombiMatrix to
      perform its obligations under, this Agreement or any of the documents
      contemplated herein, or (iii) except as expressly disclosed in the SEC
      Documents, have a Material Adverse Effect on the business, operations,
      properties, financial condition or results of operation of CombiMatrix and
      its
      Subsidiaries taken as a whole.

     

    Section
      4.18. Subsidiaries.
      Except
      as disclosed in the SEC Documents, the Company does not presently own or
      control, directly or indirectly, any interest in any other corporation,
      partnership, association or other business entity.

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

    Section
      4.19. Tax
      Status.
      Except
      as disclosed in the SEC Documents, the Company and each of its subsidiaries
      has
      made or filed all federal and state income and all other tax returns, reports
      and declarations required by any jurisdiction to which it is subject and (unless
      and only to the extent that the Company and each of its subsidiaries has set
      aside on its books provisions reasonably adequate for the payment of all unpaid
      and unreported taxes) has paid all taxes and other governmental assessments
      and
      charges that are material in amount, shown or determined to be due on such
      returns, reports and declarations, except those being contested in good faith
      and has set aside on its books provision reasonably adequate for the payment
      of
      all taxes for periods subsequent to the periods to which such returns, reports
      or declarations apply. There are no unpaid taxes in any material amount claimed
      to be due by the taxing authority of any jurisdiction, and the officers of
      the
      Company know of no basis for any such claim.

     

    Section
      4.20. Certain
      Transactions.
      Except
      as set forth in the SEC Documents none of the officers, directors, or employees
      of the Company is presently a party to any transaction with the Company (other
      than for services as employees, officers and directors), including any contract,
      agreement or other arrangement providing for the furnishing of services to
      or
      by, providing for rental of real or personal property to or from, or otherwise
      requiring payments to or from any officer, director or such employee or, to
      the
      knowledge of the Company, any corporation, partnership, trust or other entity
      in
      which any officer, director, or any such employee has a substantial interest
      or
      is an officer, director, trustee or partner.

     

    Section
      4.21. Fees
      and Rights of First Refusal.
      The
      Company is not obligated to offer the securities offered hereunder on a right
      of
      first refusal basis or otherwise to any third parties including, but not limited
      to, current or former shareholders of the Company, underwriters, brokers, agents
      or other third parties.

     

    Section
      4.22. Use
      of
      Proceeds.
      The
      proceeds from the sale of the Shares shall be used by the Company as set forth
      in the Base Prospectus and any Prospectus Supplements filed pursuant to the
      requirements of this Agreement. 

     

    Section
      4.23. Further
      Representation and Warranties of the Company.
      For so
      long as any securities issuable hereunder held by the Investor remain
      outstanding, the Company acknowledges, represents, warrants and agrees that
      it
      will maintain the listing of its Common Stock on the Principal
      Market.

     

    Section
      4.24. Opinion
      of Counsel.
      Investor shall receive an opinion letter from counsel to the Company on the
      date
      hereof.

     

    Section
      4.25. Dilution.
      The
      Company is aware and acknowledges that issuance of shares of the Common Stock
      could cause dilution to existing shareholders and could significantly increase
      the outstanding number of shares of Common Stock. 

     

    Section
      4.26. Securities
      Act.
      The
      Company has complied with all applicable federal and state securities laws
      in
      connection with the offer, issuance and sale of the Shares hereunder.

     

    (a) The
      Company has prepared and filed with the SEC in accordance with the provisions
      of
      the Securities Act the Registration Statement, including the Base Prospectus,
      relating to the Shares. The Registration Statement was declared effective by
      order of the SEC on May 26, 2006. As of the date hereof, no stop order
      suspending the effectiveness of the Registration Statement has been issued
      by
      the SEC or is continuing in effect under the Securities Act and no proceedings
      therefor are pending before or, to the Company’s knowledge, threatened by the
      SEC. No order preventing or suspending the use of the Prospectus has been issued
      by the SEC.

    

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

    (b) The
      Company meets the requirements for the use of Form S-3 under the Securities
      Act.
      The Registration Statement in the form in which it became effective and the
      Base
      Prospectus complied in all material respects with the provisions of the
      Securities Act and did not at any such time contain an untrue statement of
      a
      material fact or omit to state a material fact required to be stated therein
      or
      necessary to make the statements therein (in the case of the Prospectus, in
      the
      light of the circumstances under which they were made) not misleading; provided
      that this representation and warranty does not apply to statements in or
      omissions from the Registration Statement or the Base Prospectus made in
      reliance upon and in conformity with information relating to the Investor
      furnished to the Company in writing by or on behalf of the Investor expressly
      for use therein.

    

    (c) In
      accordance with Rule 2710(b)(7)(C)(i) of the Conduct Rules of the National
      Association of Securities Dealers, Inc., the Shares have been registered with
      the SEC on Form S-3 under the Securities Act and are being offered pursuant
      to
      Rule 415 promulgated under the Securities Act.

    

    (d) Each
      Prospectus Supplement required to be filed pursuant this Agreement, when filed
      with the SEC under Rule 424(b) under the Securities Act, shall comply in all
      material respects with the provisions of the Securities Act and shall not at
      such time contain an untrue statement of a material fact or omit to state a
      material fact required to be stated therein or necessary to make the statements
      therein, in the light of the circumstances under which they are made, not
      misleading, except that this representation and warranty does not apply to
      statements in or omissions from any Prospectus Supplement made in reliance
      upon
      and in conformity with information relating to the Investor furnished to the
      Company in writing by or on behalf of the Investor expressly for use
      therein.

    

    (e) The
      Company has not distributed and, prior to the completion of the distribution
      of
      the Common Stock, shall not distribute any offering material in connection
      with
      the offering and sale of the Common Stock other than the Registration Statement,
      the Base Prospectus as supplemented by any Prospectus Supplement or such other
      materials, if any, permitted by the Securities Act.

     

     

    ARTICLE
      V.

    Indemnification

     

    The
      Investor and the Company represent to the other the following with respect
      to
      itself:

     

    Section
      5.1. Indemnification.

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

    (a) In
      consideration of the Investor’s execution and delivery of this Agreement, and in
      addition to all of the Company’s other obligations under this Agreement, the
      Company shall defend, protect, indemnify and hold harmless the Investor, each
      affiliate, employee, representative and advisor of and to each person, if any,
      who controls the Investor within the meaning of Section 15 of the Securities
      Act
      or Section 20(a) of the Exchange Act (including, without limitation, those
      retained in connection with the transactions contemplated by this Agreement)
      (collectively, the “Investor
      Indemnitees”)
      from
      and against any and all actions, causes of action, suits, claims, losses, costs,
      penalties, fees, liabilities and damages, and expenses in connection therewith
      (irrespective of whether any such Investor Indemnitee is a party to the action
      for which indemnification hereunder is sought), and including reasonable
      attorneys’ fees and disbursements (the “Indemnified
      Liabilities”),
      incurred by the Investor Indemnitees or any of them as a result of, or arising
      out of, or relating to (a) any misrepresentation or breach of any representation
      or warranty made by the Company in this Agreement or any other certificate,
      instrument or document contemplated hereby or thereby, (b) any breach of any
      covenant, agreement or obligation of the Company contained in this Agreement
      or
      any other certificate, instrument or document contemplated hereby or thereby,
      or
      (c) any violation of law (including United States federal securities laws)
      in
      connection with the transactions contemplated by this Agreement by the Company
      or any of its subsidiaries, affiliates, officers, directors or employees, (d)
      any untrue statement or alleged untrue statement of a material fact contained,
      or incorporated by reference, in the Registration Statement or any amendment
      thereto or any omission or alleged omission to state therein, or in any document
      incorporated by reference therein, a material fact required to be stated therein
      or necessary to make the statements therein not misleading, or (e) any untrue
      statement or alleged untrue statement of a material fact contained, or
      incorporated by reference, in the Prospectus or any omission or alleged omission
      to state therein, or in any document incorporated by reference therein, a
      material fact required to be stated therein or necessary to make the statements
      therein, in light of the circumstances under which they were made, not
      misleading. To the extent that the foregoing undertaking by the Company may
      be
      unenforceable for any reason, the Company shall make the maximum contribution
      to
      the payment and satisfaction of each of the Indemnified Liabilities, which
      is
      permissible under applicable law.

     

    (b) In
      consideration of the Company’s execution and delivery of this Agreement, and in
      addition to all of the Investor’s other obligations under this Agreement, the
      Investor shall defend, protect, indemnify and hold harmless the Company each
      affiliate, employee, representative and advisor of and to each person, if any,
      who controls the Company within the meaning of Section 15 of the Securities
      Act
      or Section 20(a) of the Exchange Act (including, without limitation, those
      retained in connection with the transactions contemplated by this Agreement)
      (collectively, the “Company
      Indemnitees”)
      from
      and against any and all Indemnified Liabilities incurred by the Company
      Indemnitees or any of them as a result of, or arising out of, or relating to
      (a)
      any misrepresentation or breach of any representation or warranty made by the
      Investor in this Agreement, or any instrument or document contemplated hereby
      or
      thereby executed by the Investor, (b) any breach of any covenant, agreement
      or
      obligation of the Investor(s) contained in this Agreement, or any other
      certificate, instrument or document contemplated hereby or thereby executed
      by
      the Investor, or (c) any violation of law (including United States federal
      securities laws) in connection with the transactions contemplated by this
      Agreement by the Investor or any of its affiliates, officers, directors or
      employees, or (d) any untrue statement or alleged untrue statement of a material
      fact contained in the Current Report or any Prospectus Supplement or any
      omission or alleged omission to state therein a material fact required to be
      stated therein or necessary to make the statements therein, in light of the
      circumstances under which they were made, not misleading, in each case, to
      the
      extent, but only to the extent, the untrue statement, alleged untrue statement,
      omission or alleged omission was made in reliance upon, and in conformity with,
      written information furnished by the Investor to the Company expressly for
      inclusion in the Current Report or such Prospectus Supplement.. To the extent
      that the foregoing undertaking by the Investor may be unenforceable for any
      reason, the Investor shall make the maximum contribution to the payment and
      satisfaction of each of the Indemnified Liabilities, which is permissible under
      applicable law.

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

    (c) The
      obligations of the parties to indemnify or make contribution under this Section
      5.1 shall survive termination.

     

    Section
      5.2. Indemnification
      Procedures.
      

    

    Promptly
      after a person receives notice of a claim or the commencement of an action
      for
      which the person intends to seek indemnification under Section
      5.1,
      the
      person will notify the indemnifying party in writing of the claim or
      commencement of the action, suit or proceeding; provided,
      however,
      that
      failure to notify the indemnifying party will not relieve the indemnifying
      party
      from liability under Section
      5.1,
      except
      to the extent it has been materially prejudiced by the failure to give notice.
      The indemnifying party will be entitled to participate in the defense of any
      claim, action, suit or proceeding as to which indemnification is being sought,
      and if the indemnifying party acknowledges in writing the obligation to
      indemnify the party against whom the claim or action is brought, the
      indemnifying party may (but will not be required to) assume the defense against
      the claim, action, suit or proceeding with counsel satisfactory to it. After
      an
      indemnifying party notifies an indemnified party that the indemnifying party
      wishes to assume the defense of a claim, action, suit or proceeding, the
      indemnifying party will not be liable for any legal or other expenses incurred
      by the indemnified party in connection with the defense against the claim,
      action, suit or proceeding except that if, in the opinion of counsel to the
      indemnifying party, one or more of the indemnified parties should be separately
      represented in connection with a claim, action, suit or proceeding, the
      indemnifying party will pay the reasonable fees and expenses of one separate
      counsel for the indemnified parties.  Each indemnified party, as a
      condition to receiving indemnification as provided in Section
      5.1,
      will
      cooperate in all reasonable respects with the indemnifying party in the defense
      of any action or claim as to which indemnification is sought. No indemnifying
      party will be liable for any settlement of any action effected without its
      prior
      written consent. Notwithstanding the foregoing sentence, if at any time an
      indemnified party shall have requested (by written notice) an indemnifying
      party
      to reimburse the indemnified party for fees and expenses of counsel, such
      indemnifying party agrees that it shall be liable for any settlement of the
      nature contemplated hereby effected without its written consent if: (i) such
      settlement is entered into more than 45 days after receipt by such indemnifying
      party of the aforesaid request, (ii) such indemnifying party shall have received
      written notice of the terms of such settlement at least 30 days prior to such
      settlement being entered into, (iii) such indemnifying party shall not have
      reimbursed such indemnified party in accordance with such request prior to
      the
      date of such settlement, (iv) such settlement includes an unconditional release
      of the indemnifying party from all further liability for losses arising out
      of
      such action or claim, (v) such settlement does not include an injunction that
      will materially adversely affect any indemnifying party, and (vi) such
      settlement does not admit liability or fault on the part of any indemnifying
      party. No indemnifying party will, without the prior written consent of the
      indemnified party, effect any settlement of a pending or threatened action
      with
      respect to which an indemnified party is, or is informed that it may be, made
      a
      party and for which it would be entitled to indemnification, unless the
      settlement includes an unconditional release of the indemnified party from
      all
      liability and claims which are the subject matter of the pending or threatened
      action.

     

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

     

    If
      for
      any reason the indemnification provided for in this Agreement is not available
      to, or is not sufficient to hold harmless, an indemnified party in respect
      of
      any loss or liability referred to in Section
      5.1
      as to
      which such indemnified party is entitled to indemnification thereunder, each
      indemnifying party shall, in lieu of indemnifying the indemnified party,
      contribute to the amount paid or payable by the indemnified party as a result
      of
      such loss or liability, (i) in the proportion which is appropriate to reflect
      the relative benefits received by the indemnifying party, on the one hand,
      and
      by the indemnified party, on the other hand, from the sale of Shares which
      is
      the subject of the claim, action, suit or proceeding which resulted in the
      loss
      or liability or (ii) if the allocation provided by clause (i) is not permitted
      by applicable law, in such proportion as is appropriate to reflect not only
      the
      relative benefits referred to in clause (i) above, but also the relative fault
      of the indemnifying party, on the one hand, and the indemnified party, on the
      other hand, with respect to the statements or omissions which are the subject
      of
      the claim, action, suit or proceeding that resulted in the loss or liability,
      as
      well as any other relevant equitable considerations.

     

    The
      remedies provided for in Section
      5.1
      and this
Section
      5.2 are
      not
      exclusive and shall not limit any rights or remedies which may otherwise be
      available to any Indemnified Person at law or in equity.

     

     

    ARTICLE
      VI.

    Covenants

     

    The
      Company covenants with the Investor, and the Investor covenants with the
      Company, as follows, which covenants of one party are for the benefit of the
      other party, during the Commitment Period:

     

    Section
      6.1. Effective
      Registration Statement.
      During
      the Commitment Period, the Company shall use its best efforts to maintain the
      continuous effectiveness of the Registration Statement under the Securities
      Act.

     

    Section
      6.2. Listing
      of Common Stock.
      The
      Company shall maintain the Common Stock’s authorization for quotation on a
      Principal Market and shall comply with the Company’s reporting, filing and other
      obligations under the bylaws, listed securities maintenance standards and other
      rules of such Principal Market. 

     

    Section
      6.3. Exchange
      Act Registration.
      The
      Company will cause its Common Stock to continue to be registered under Section
      12(b) or 12(g) of the Exchange Act, will file in a timely manner all reports
      and
      other documents required of it as a reporting company under the Exchange Act
      and
      will not take any action or file any document (whether or not permitted by
      Exchange Act or the rules thereunder) to terminate or suspend such registration
      or to terminate or suspend its reporting and filing obligations under said
      Exchange Act.

     

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

    Section
      6.4. Transfer
      Agent Instructions.
      The
      Company shall deliver instructions to its transfer agent to issue shares of
      Common Stock to the Investor free of restrictive legends on or before each
      Advance Date as set forth in Section 2.3.

     

    Section
      6.5. Corporate
      Existence.
      The
      Company will take all steps necessary to preserve and continue the corporate
      existence of the Company.

     

    Section
      6.6. Notice
      of Certain Events Affecting Registration; Suspension of Right to Make an
      Advance.
      The
      Company will immediately notify the Investor, and confirm in writing, upon
      its
      becoming aware of the occurrence of any of the following events: (i) receipt
      of
      any request for additional information by the SEC or any other Federal or state
      governmental authority for amendments or supplements to the Registration
      Statement, the Prospectus, or for any additional information; (ii) the issuance
      by the SEC or any other Federal or state governmental authority of any stop
      order suspending the effectiveness of the Registration Statement or the
      initiation of any proceedings for that purpose; (iii) receipt of any
      notification with respect to the suspension of the qualification or exemption
      from qualification of any of the Common Stock for sale in any jurisdiction
      or
      the initiation or threatening of any proceeding for such purpose; (iv) the
      happening of any event that makes any statement made in the Registration
      Statement or Prospectus or any document incorporated or deemed to be
      incorporated therein by reference untrue in any material respect or that
      requires the making of any changes in the Registration Statement, Prospectus,
      or
      documents so that, in the case of the Registration Statement, it will not
      contain any untrue statement of a material fact or omit to state any material
      fact required to be stated therein or necessary to make the statements therein
      not misleading, and that in the case of the Prospectus, it will not contain
      any
      untrue statement of a material fact or omit to state any material fact required
      to be stated therein or necessary to make the statements therein, in the light
      of the circumstances under which they were made, not misleading, or of the
      necessity to amend the Registration Statement or supplement the Prospectus
      to
      comply with the Securities Act or any other law; and (v) the Company’s
      reasonable determination that a post-effective amendment to the Registration
      Statement would be appropriate; and the Company will promptly make available
      to
      the Investor any such supplement or amendment to the related prospectus. The
      Company shall not deliver to the Investor any Advance Notice during the
      continuation of any of the foregoing events. If at any time the SEC shall issue
      any stop order suspending the effectiveness of the Registration Statement,
      the
      Company shall use commercially reasonable efforts to obtain the withdrawal
      of
      such order at the earliest possible time. 

     

    Section
      6.7. Prospectus
      Delivery.
      The
      Company shall file with the SEC a Prospectus Supplement prior to 8:00 p.m.
      (New
      York time) on the first Trading Day immediately following each Advance Date,
      which shall include the identity of the Investor, the number of shares of Common
      Stock issued pursuant to such Advance and the purchase price of the shares
      of
      Common Stock so issued. The Company shall provide the Investor a reasonable
      opportunity to comment on a draft of each such Prospectus Supplement (and shall
      give due consideration to all such comments) and shall deliver or make available
      to the Investor, without charge, an electronic copy of each form of Prospectus
      Supplement, together with the Base Prospectus. The Company consents to the
      use
      of the Prospectus (and of any Prospectus Supplement thereto) in accordance
      with
      the provisions of the Securities Act and with the securities or “blue sky” laws
      of the jurisdictions in which the Shares may be sold by the Investor, in
      connection with the offering and sale of the Shares and for such period of
      time
      thereafter as the Prospectus is required by the Securities Act to be delivered
      in connection with sales of the Shares. If during such period of time any event
      shall occur that in the judgment of the Company and its counsel is required
      to
      be set forth in the Prospectus or should be set forth therein in order to make
      the statements made therein, in the light of the circumstances under which
      they
      were made, not misleading, or if it is necessary to supplement or amend the
      Prospectus to comply with the Securities Act or any other applicable law or
      regulation, the Company shall forthwith prepare and file with the SEC an
      appropriate Prospectus Supplement to the Prospectus and shall expeditiously
      furnish or make available to the Investor an electronic copy
      thereof.

    

    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

    

    Section
      6.8. Consolidation;
      Merger.
      The
      Company shall not, at any time after the date hereof, effect any merger or
      consolidation of the Company with or into, or a transfer of all or substantially
      all the assets of the Company to another entity (a “Consolidation
      Event”)
      unless
      the resulting successor or acquiring entity (if not the Company) assumes by
      written instrument the obligation to deliver to the Investor such shares of
      stock and/or securities as the Investor is entitled to receive pursuant to
      this
      Agreement.

     

    Section
      6.9. Issuance
      of the Common Stock.
      The sale
      of the Common Stock shall be made in accordance with the provisions and
      requirements of the Securities Act and any applicable state securities
      law.

     

    Section
      6.10. Review
      of Public Disclosures.
      All SEC
      filings (including, without limitation, all filings required under the Exchange
      Act, which include Forms 10-Q and 10-QSB, 10-K and 10K-SB, 8-K, etc) and other
      public disclosures made by the Company, including, without limitation, all
      investor relations materials, and scripts of analysts meetings and calls, shall
      be reviewed and approved for release by the Company’s attorneys and, if
      containing financial information, the Company’s independent certified public
      accountants. 

     

    Section
      6.11. Compliance
      With Laws.
      

     

    (i) The
      Company will not, directly or indirectly, take any action designed to cause
      or
      result in, or that constitutes or might reasonably be expected to constitute,
      the stabilization or manipulation of the price of any security of the Company
      or
      which caused or resulted in, or which would in the future reasonably be expected
      to cause or result in, stabilization or manipulation of the price of any
      security of the Company.

     

    (ii) The
      Investor shall comply with all applicable provisions of the Securities Act
      and
      the Exchange Act, except for such non-compliance as would not, individually
      or
      in the aggregate, prohibit or otherwise interfere with the ability of the
      Investor to enter into and perform its obligations under this Agreement in
      any
      material respect. Without limiting the generality of the foregoing, neither
      the
      Investor nor any of its officers, directors or affiliates has taken or will
      take, directly or indirectly, any action designed or intended to stabilize
      or
      manipulate the price of any security of the Company, or which caused or resulted
      in, or which might in the future reasonably be expected to cause or result
      in
      stabilization or manipulation of the price of any security of the
      Company.

     

    
      
        
        

      

      
        18

        
          

        

      

      
        
        

      

    

    Section
      6.12. Limitations
      on Holdings and Issuances.
      At no
      time during the term of this Agreement shall the Investor directly or indirectly
      own more than 9.9% of the then issued in outstanding shares of the Common Stock.
      The Company shall not be obligated to issue and the Investor shall not be
      obligated to purchase any shares of Common Stock which would result in the
      issuance under this Agreement to the Investor at any time of Shares which,
      when
      aggregated with all other shares of Common Stock then owned beneficially by
      the
      Investor, would result in the beneficial ownership by the Investor of more
      than
      9.9% of the then issued in outstanding shares of Common Stock. 

     

    Section
      6.13. Selling
      Restrictions.
      (i) The
      Investor covenants that from and after the date hereof, through and including
      the 90th
      day
      following the termination of this Agreement (the “Restricted Period”) neither
      the Investor nor any of its affiliates (within the meaning of the Exchange
      Act)
      nor any entity managed by the Investor shall directly or indirectly, sell any
      securities of the Company, except the Shares that it owns or has the right
      to
      purchase as provided in an Advance Notice. During the Restricted Period, neither
      the Investor nor any of its affiliates nor any entity managed by the Investor
      shall sell any shares of Common Stock of the Company it does not “own” or have
      the unconditional right to receive, including shares in any account of the
      Investor or any account directly or indirectly managed by the Investor of any
      of
      its affiliates or any entity managed by the Investor. Without limiting the
      generality of the foregoing, prior to and during the Restricted Period, neither
      the Investor nor any of its affiliates nor any entity managed by the Investor
      or
      any of its affiliates shall enter into a short position with respect to shares
      of Common Stock of the Company, including in any account of the Investor or
      in
      any account directly or indirectly managed by the Investor or any of its
      affiliates or any entity managed by the Investor, except that the Investor
      may
      sell Shares that it is obligated to purchase under a pending Advance Notice,
      but
      has not yet taken possession of so long as the Investor (or the broker-dealer
      as
      applicable) covers any such sales with the Shares purchased pursuant to such
      Advance Notice; provided, however, that the Investor shall not be required
      to
      cover any such sales with the Shares purchased pursuant to such Advance Notice
      if the Company fails to deliver such Shares to the Investor on the applicable
      Closing Date upon the terms and subject to the provisions of this Agreement.
      Prior to and during Restricted Period, the Investor shall not grant any option
      to purchase or acquire any right to dispose or otherwise dispose for value
      of
      any Shares of Common Stock or any securities convertible into or excercisable
      or
      exchangeable for, or warrants to purchase, any shares of Common Stock, or enter
      into any swap, hedge or other agreement that transfers, in whole or in part,
      the
      economic risk of ownership of the Common Stock, except for such sales expressly
      permitted by this Section 6.13(i).

     

    (ii)
      In
      addition to the foregoing, in connection with the sale of the Company’s
      securities (including any sale permitted by paragraph (i) above), the Investor
      shall comply in all respects with all applicable laws, rules, regulations and
      orders, including, without limitation, the requirements of the Securities Act
      and the Exchange Act.

     

    Section
      6.14. Broker-Dealer.
      The
      Investor shall use one or more brokers-dealers to effectuate all sales, if
      any,
      of the Shares that it may purchase from the Company pursuant to this Agreement
      which (or whom) shall not be affiliated (as that term is defined in the Exchange
      Act) with the Investor and not been currently engaged or used by the Company.
      Investor will provide the Company with information regarding the identity of
      any
      broker-dealer used by Investor reasonably requested by the Company. The Investor
      shall be solely responsible for all fees and commissions of the broker-dealer.
      

     

    
      
        
        

      

      
        19

        
          

        

      

      
        
        

      

    

     

    ARTICLE
      VII.

    Conditions
      Precedent to the Right of the Company to Deliver an Advance
      Notice

     

    The
      right
      of the Company to deliver an Advance Notice is subject to the fulfillment by
      the
      Company, on such Advance Notice Date (a “Condition
      Satisfaction Date”),
      of
      each of the following conditions:

     

    7.1 Registration
      of the Common Stock with the SEC; Filing of Reports with SEC.
      The
      Registration Statement is effective and the Company is not aware of any of
      the
      events set forth in Section
      6.6
      hereof.
      The Current Report shall have been filed with the SEC, a Prospectus Supplement
      shall have been filed with the SEC, as required pursuant to Section 6.7 in
      connection with all prior Advances, and an electronic copy of such Prospectus
      Supplement together with the Base Prospectus shall have been delivered or made
      available to the Investor. The Company shall have filed with the SEC in a timely
      manner all reports, notices and other documents required of a “reporting
      company” under the Exchange Act and applicable SEC regulations.

     

    7.2 Authority.
      The
      Company shall have obtained all permits and qualifications required by any
      applicable state in accordance with the Agreement for the offer and sale of
      the
      shares of Common Stock, or shall have the availability of exemptions therefrom.
      The sale and issuance of the shares of Common Stock shall be legally permitted
      by all laws and regulations to which the Company is subject.

     

    7.3 Fundamental
      Changes.
      There
      shall not exist any fundamental changes to the information set forth in the
      Registration Statement which would require the Company to file a post-effective
      amendment to the Registration Statement pursuant to SEC rules and regulations.
      

     

    7.4 Performance
      by the Company.
      The
      Company shall have performed, satisfied and complied in all material respects
      with all covenants, agreements and conditions required by this Agreement to
      be
      performed, satisfied or complied with by the Company at or prior to each
      Condition Satisfaction Date.

     

    7.5 No
      Injunction.
      No
      statute, rule, regulation, executive order, decree, ruling or injunction shall
      have been enacted, entered, promulgated or endorsed by any court or governmental
      authority of competent jurisdiction that prohibits or directly and adversely
      affects any of the transactions contemplated by this Agreement, and no
      proceeding shall have been commenced that may have the effect of prohibiting
      or
      adversely affecting any of the transactions contemplated by this
      Agreement.

     

    7.6 No
      Suspension of Trading in or Delisting of Common Stock.
      The
      trading of the Common Stock is not suspended by the SEC or a Principal Market
      during any Trading Day. The Company shall not have received any notice
      threatening the continued listing of the Common Stock on the Principal Market.
      

     

    
      
        
        

      

      
        20

        
          

        

      

      
        
        

      

    

    7.7 Maximum
      Advance Amount.
      The
      amount of an Advance requested by the Company shall not exceed the Maximum
      Advance Amount and shall not violate Sections
      1.8 and
      6.12
      hereof.

     

    7.8 No
      Knowledge.
      The
      Company has no knowledge of any event which would be more likely than not to
      have the effect of causing the Registration Statement to be suspended or
      otherwise ineffective.

     

    7.9 Executed
      Advance Notice.
      The
      Investor shall have received the Advance Notice executed by an officer of the
      Company and the representations contained in such Advance Notice shall be true
      and correct as of each Condition Satisfaction Date.

     

    7.10 Opinion
      of Counsel.
      Prior
      to the first Advance, the Investor shall have received an opinion letter from
      counsel to the Company in the form of Exhibit
      B
      hereto.

     

     

    ARTICLE
      VIII.

    Due
      Diligence Review; Non-Disclosure of Non-Public Information

     

    Section
      8.1. Non-Disclosure
      of Non-Public Information.

     

    (a) The
      Company covenants and agrees that it shall refrain from disclosing, and shall
      cause its officers, directors, employees and agents to refrain from disclosing,
      any material non-public information to the Investor without also disseminating
      such information to the public, unless prior to disclosure of such information
      the Company identifies such information as being material non-public information
      and provides the Investor with the opportunity to accept or refuse to accept
      such material non-public information for review.

     

    (b) Nothing
      herein shall require the Company to disclose non-public information to the
      Investor or its advisors or representatives, and the Company represents that
      it
      does not disseminate non-public information to any investors who purchase stock
      in the Company in a public offering, to money managers or to securities
      analysts, provided, however, that notwithstanding anything herein to the
      contrary, the Company will, as hereinabove provided, immediately notify the
      advisors and representatives of the Investor and, if any, underwriters, of
      any
      event or the existence of any circumstance (without any obligation to disclose
      the specific event or circumstance) of which it becomes aware, constituting
      non-public information (whether or not requested of the Company specifically
      or
      generally during the course of due diligence by such persons or entities),
      which, if not disclosed in the prospectus included in the Registration Statement
      would cause such prospectus to include a material misstatement or to omit a
      material fact required to be stated therein in order to make the statements,
      therein, in light of the circumstances in which they were made, not misleading.
      Nothing contained in this Section 8.2 shall be construed to mean that such
      persons or entities other than the Investor (without the written consent of
      the
      Investor prior to disclosure of such information) may not obtain non-public
      information in the course of conducting due diligence in accordance with the
      terms of this Agreement and nothing herein shall prevent any such persons or
      entities from notifying the Company of their opinion that based on such due
      diligence by such persons or entities, that the Registration Statement contains
      an untrue statement of material fact or omits a material fact required to be
      stated in the Registration Statement or necessary to make the statements
      contained therein, in light of the circumstances in which they were made, not
      misleading.

     

    
      
        
        

      

      
        21

        
          

        

      

      
        
        

      

    

     

    ARTICLE
      IX.

    Choice
      of Law/Jurisdiction

     

    Section
      9.1. Governing
      Law.
      This
      Agreement shall be governed by and interpreted in accordance with the laws
      of
      the State of New Jersey without regard to the principles of conflict of laws.
      The parties further agree that any action between them shall be heard in Hudson
      County, New Jersey, and expressly consent to the jurisdiction and venue of
      the
      Superior Court of New Jersey, sitting in Hudson County, New Jersey and the
      United States District Court of New Jersey, sitting in Newark, New Jersey,
      for
      the adjudication of any civil action asserted pursuant to this
      paragraph.

     

    ARTICLE
      X.

    Assignment;
      Termination

     

    Section
      10.1. Assignment.
      Neither
      this Agreement nor any rights of the Company hereunder may be assigned to any
      other Person. 

     

    Section
      10.2. Termination.
      

     

    (a) The
      obligations of the Investor to make Advances under Article II hereof shall
      terminate twenty-four (24) months after the Effective Date.

     

    (b) The
      obligation of the Investor to make an Advance to the Company pursuant to this
      Agreement shall terminate permanently (including with respect to an Advance
      Date
      that has not yet occurred) in the event that (i) there shall occur any stop
      order or suspension of the effectiveness of the Registration Statement for
      an
      aggregate of fifty (50) Trading Days, other than due to the acts of the
      Investor, during the Commitment Period, or (ii) the Company shall at any time
      fail materially to comply with the requirements of Article VI and such failure
      is not cured within thirty (30) days after receipt of written notice from the
      Investor, provided,
      however,
      that
      this termination provision shall not apply to any period commencing upon the
      filing of a post-effective amendment to such Registration Statement and ending
      upon the date on which such post effective amendment is declared effective
      by
      the SEC.

     

    (c) The
      Company may terminate this Agreement effective upon three (3) days’ prior
      written notice to the Investor; provided, however, that such termination shall
      not occur during a Pricing Period or prior to a Closing Date.

     

    Section
      10.3. Effect
      of Termination.
      In the
      event of Termination by the Company or the Investor, written notice thereof
      shall be given to the other party as provided in Section 11.1 and the
      transactions contemplated by this Agreement shall be terminated without further
      action by either party. Nothing in this Section 10.3 shall be deemed to release
      the Company or the Investor from any liability for any breach under this
      Agreement, or to impair the rights of the Company and the Investor to compel
      specific performance by the other party of its obligations under this Agreement.
      The indemnification provisions contained in Sections 5.1 and 5.2 shall survive
      termination hereunder.

     

    

    
      
        
        

      

      
        22

        
          

        

      

      
        
        

      

    

     

    ARTICLE
      XI.

    Notices

     

    Section
      11.1. Notices.
      Any
      notices, consents, waivers, or other communications required or permitted to
      be
      given under the terms of this Agreement must be in writing and will be deemed
      to
      have been delivered (i) upon receipt, when delivered personally; (ii) upon
      receipt, when sent by facsimile, provided a copy is mailed by U.S. certified
      mail, return receipt requested; (iii) three (3) days after being sent by U.S.
      certified mail, return receipt requested, or (iv) one (1) day after deposit
      with
      a nationally recognized overnight delivery service, in each case properly
      addressed to the party to receive the same. The addresses and facsimile numbers
      for such communications shall be:

     

    
      	
              If
                to the Company, to:

            	
              Acacia
                Research Corporation

            
	 	
              Attn:
                 Paul
                R. Ryan, Chairman & CEO

            
	 	
              Robert
                Berman, Esq.

            
	 	
              500
                Newport Center Drive

              7th
                Floor

              Newport
                Beach, CA 92660

            
	 	 
	 	
              CombiMatrix
                Corporation

            
	 	
              Attn: 
                Amit
                Kumar, President & CEO

            
	 	
              Scott
                Burell, CFO

            
	 	
              6500
                Harbour Heights Parkway, Suite 301

            
	 	
              Mukilteo,
                WA 98275

            
	 	 
	
              With
                a copy to:

            	
              Greenburg
                Traurig LLP

            
	 	
              Attn:  Raymond
                A. Lee

            
	 	
              Steve
                Anapoell

            
	 	
              650
                Town Center Drive, Suite 1700

            
	 	
              Costa
                Mesa, CA 92626

            
	 	 
	
              If
                to the Investor(s):

            	
              Cornell
                Capital Partners, LP

            
	 	
              101
                Hudson Street -Suite 3700

            
	 	
              Jersey
                City, NJ 07302

            
	 	
              Attention: Mark
                Angelo

            
	 	
              Portfolio
                Manager

            
	 	
              Telephone: (201)
                985-8300 

            
	 	
              Facsimile: (201)
                985-8266 

            

    

     

    
      
        
        

      

      
        23

        
          

        

      

      
        
        

      

    

    
      	 	 
	
              With
                a Copy to:

            	
              Troy
                Rillo, Esq.

            
	 	
              101
                Hudson Street - Suite 3700

            
	 	
              Jersey
                City, NJ 07302

            
	 	
              Telephone: (201)
                985-8300

            
	 	
              Facsimile: (201)
                985-8266

            
	 	 

    

    

    Each
      party shall provide five (5) days’ prior written notice to the other party of
      any change in address or facsimile number.

     

    ARTICLE
      XII.

    Miscellaneous

     

    Section
      12.1. Counterparts.
      This
      Agreement may be executed in two or more identical counterparts, all of which
      shall be considered one and the same agreement and shall become effective when
      counterparts have been signed by each party and delivered to the other party.
      In
      the event any signature page is delivered by facsimile transmission, the party
      using such means of delivery shall cause four (4) additional original executed
      signature pages to be physically delivered to the other party within five (5)
      days of the execution and delivery hereof, though failure to deliver such copies
      shall not affect the validity of this Agreement.

     

    Section
      12.2. Entire
      Agreement; Amendments.
      This
      Agreement supersedes all other prior oral or written agreements between the
      Investor, the Company, their affiliates and persons acting on their behalf
      with
      respect to the matters discussed herein, and this Agreement and the instruments
      referenced herein contain the entire understanding of the parties with respect
      to the matters covered herein and therein and, except as specifically set forth
      herein or therein, neither the Company nor the Investor makes any
      representation, warranty, covenant or undertaking with respect to such matters.
      No provision of this Agreement may be waived or amended other than by an
      instrument in writing signed by the party to be charged with
      enforcement.

     

    Section
      12.3. Reporting
      Entity for the Common Stock.
      The
      reporting entity relied upon for the determination of the trading price or
      trading volume of the Common Stock on any given Trading Day for the purposes
      of
      this Agreement shall be Bloomberg, L.P. or any successor thereto. The written
      mutual consent of the Investor and the Company shall be required to employ
      any
      other reporting entity.

     

    Section
      12.4. Fees
      and Expenses.
      The
      Company hereby agrees to pay the following fees:

     

    (a) Structuring
      Fees.
      Each of
      the parties shall pay its own fees and expenses (including the fees of any
      attorneys, accountants, appraisers or others engaged by such party) in
      connection with this Agreement and the transactions contemplated hereby, except
      that (i) the Company shall pay the Investor or its designee a structuring fee
      of
      Fifteen Thousand Dollars ($15,000), of which $5,000 has been paid and the
      remaining $10,000 shall be paid on the date hereof, and (ii) On each Advance
      Date, the Company shall pay Yorkville Advisors, LLC a structuring fee of Five
      Hundred Dollars ($500) directly out the gross proceeds of each
      Advance.

     

    
      
        
        

      

      
        24

        
          

        

      

      
        
        

      

    

    (b) Due
      Diligence Fee.
      Company
      has paid the Investor a non-refundable due diligence fee of Five Thousand
      Dollars ($5,000) in connection with submission of the due diligence documents
      requested by the Investor.

     

    (c) Commitment
      Fees.

     

    (i) On
      each
      Advance Date the Company shall pay to the Investor, directly out of the gross
      proceeds of each Advance, an amount equal to four percent (4%) of the amount
      of
      each Advance for the first $20,000,000 of the Commitment Amount advanced and
      five percent (5%) of the amount of each Advance over $20,000,000 of the
      Commitment Amount advanced. The Company hereby agrees that if such payment,
      as
      is described above, is not made by the Company on the Advance Date, such payment
      shall be made as outlined and mandated by Section 2.3 of this Agreement.

     

    (ii) Upon
      the
      execution of this Agreement the Company shall pay the Investor a cash fee of
      $550,000.

     

    Section
      12.5. Brokerage.
      Each of
      the parties hereto represents that it has had no dealings in connection with
      this transaction with any finder or broker who will demand payment of any fee
      or
      commission from the other party. The Company on the one hand, and the Investor,
      on the other hand, agree to indemnify the other against and hold the other
      harmless from any and all liabilities to any person claiming brokerage
      commissions or finder’s fees on account of services purported to have been
      rendered on behalf of the indemnifying party in connection with this Agreement
      or the transactions contemplated hereby.

     

    Section
      12.6. Confidentiality.
      If for
      any reason the transactions contemplated by this Agreement are not consummated,
      each of the parties hereto shall keep confidential any information obtained
      from
      any other party (except information publicly available or in such party’s domain
      prior to the date hereof, and except as required by court order, applicable
      securities laws or taxing authorities) and shall promptly return to the other
      parties all schedules, documents, instruments, work papers or other written
      information without retaining copies thereof, previously furnished by it as
      a
      result of this Agreement or in connection herein.

     

    [REMAINDER
      OF PAGE INTENTIONALLY LEFT BLANK]

    

    
      
        
        

      

      
        25

        
          

        

      

      
        
        

      

    

     

    IN
      WITNESS WHEREOF,
      the
      parties hereto have caused this Standby Equity Distribution Agreement to be
      executed by the undersigned, thereunto duly authorized, as of the date first
      set
      forth above.

     

    
      	 	
              COMPANY:

            
	 	
              Acacia
                Research Corporation

            
	 	 
	 	
              By: /s/
                Paul R. Ryan    

            
	 	
              Name: Paul
                R. Ryan

            
	 	
              Title: Chairman
                & Chief Executive Officer

            
	 	 
	 	 
	 	
              INVESTOR:

            
	 	
              Cornell
                Capital Partners, LP

            
	 	 
	 	
              By: Yorkville
                Advisors, LLC

            
	 	
              Its: General
                Partner

            
	 	 
	 	
              By: /s/
                Mark Angelo    

            
	 	
              Name: Mark
                Angelo

            
	 	
              Title: Portfolio
                Manager

            

    

     

    
 

    
      
        
        

      

      
        26

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
      A

     

    ADVANCE
      NOTICE - ACACIA RESEARCH CORPORATION

     

    The
      undersigned, _______________________ hereby certifies, with respect to the
      sale
      by ACACIA
      RESEARCH CORPORATION (the
      “Company”)
      of the
      Common Stock of Acacia Research - CombiMatrix issuable in connection with this
      Advance Notice, delivered pursuant to the Standby Equity Distribution Agreement
      (the “Agreement”),
      as
      follows: 

     

    1. The
      undersigned is the duly elected ______________ of the Company.

     

    2. There
      are
      no fundamental changes to the information set forth in the Registration
      Statement which would require the Company to file a post effective amendment
      to
      the Registration Statement. 

     

    3.
       The
      Company has performed in all material respects all covenants and agreements
      to
      be performed by the Company and has complied in all material respects with
      all
      obligations and conditions contained in the Agreement on or prior to the Advance
      Notice Date, and shall continue to perform in all material respects all
      covenants and agreements to be performed by the Company through the applicable
      Advance Date including, but not limited to, compliance with all securities
      laws.
      All conditions to the delivery of this Advance Notice are satisfied as of the
      date hereof.

     

    4. The
      undersigned hereby represents, warrants and covenants that it has made all
      filings (“SEC
      Filings”)
      required to be made by it pursuant to applicable securities laws (including,
      without limitation, all filings required under the Securities Exchange Act
      of
      1934, which include Forms 10-Q or 10-QSB, 10-K or 10-KSB, 8-K, etc.). All SEC
      Filings and other public disclosures made by the Company, including, without
      limitation, all press releases, analysts meetings and calls, etc. (collectively,
      the “Public
      Disclosures”),
      have
      been reviewed and approved for release by the Company’s attorneys and, if
      containing financial information, the Company’s independent certified public
      accountants. None of the Company’s Public Disclosures contain any untrue
      statement of a material fact or omit to state any material fact required to
      be
      stated therein or necessary to make the statements therein, in the light of
      the
      circumstances under which they were made, not misleading.

     

    5. The
      Advance requested is _____________________.

     

    6. The
      Minimum Acceptable Price is ______________.

     

    The
      undersigned has executed this Certificate this ____ day of
      _________________.

     

    ACACIA
      RESEARCH CORPORATION

    

    By:____________________________

    Name: 

    Title: 

    

      If
        Returning This Advance Notice via Facsimile Please Send To: (201) 946-0851
        and
        (858) 546-8756

      

      If
        by
        Mail, via Federal Express To:    Cornell
        Capital Partners, LP

      101
        Hudson Street, Suite 3700, Jersey City, NJ 07302

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    EXHIBIT
      B

    

    FORM
      OF LEGAL OPINIONexv4w1

 

Exhibit 4.1

	SMART MOVE, INC.

	INCORPORATED UNDER THE LAWS OF THE
STATE OF DELAWARE AUTHORIZED:
100,000,000 COMMON SHARES, $0.0001 PAR
VALUE

	This Certifies That Is The Owner Of

	SEE REVERSE FOR CERTAIN DEFINATION

	CUSIP 831920103

	FULLY PAID AND WON-ASSESS ABLE COMMON SHARES, $4,0001 PAR VALUE

	SMART MOVE, INC.

	transferable on the books of this Corporation in person or by attorney upon surrender of
this Certificate duly endorsed or assigned. This Certificate and the shares represented hereby
are subject to the laws of the State of Delaware, and to the Articles of Incorporation and
Bylaws of the Corporation, as now or hereafter amended. This Certificate is not valid until
countersigned by the Transfer Agent.

	In Witness Whereof, the Corporation has caused this Certificate to be signed by the
facsimile signatures of its duty authorized officers and to be sealed with the facsimile seal
of the Corporation.

	Dated:

 

 

SMART MOVE, INC.

Corporate Stock Transfer, Inc.

Transfer Fee: As Required

     The following abbreviations, when used in the inscription on the face of this
certificate, shall be construed as though they were written out in full according to applicable
laws or regulations:

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	TEN COM
	 	— as tenants in common
	 	UNIF GIFT MIN ACT                                                               
	 Custodian
for                      
	 

	 	 	 	 	 	 	 	(Cust.)
	 	(Minor)

	 

	 	TEN ENT
	 	— as tenants by the entireties
	 	 	 	under Uniform Gifts to Minors

	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	JT TEN
	 	— as joint tenants with right
	 	 	 	
Act of                                                                  

	 

	 	 	 	     of survivorship and not as tenants
	 	 	 	(State)	 	 	 	 
	 

	 	 	 	     in common	 	 	 	 	 	 	 	 

Additional abbreviations may also be used though not in the above list.

For value received                                                             

hereby sell, assign and transfer unto

PLEASE INSERT SOCIAL SECURITY OR OTHER

IDENTIFYING NUMBER OF ASSIGNEE

Please print or type name and address of assignee

                                                                           
                                                    

                                                                        
                                                       

                                                                         
                                                      

                                                                         
                                            
Shares

of the Common Stock represented by the within Certificate and do hereby irrevocably
constitute and appoint

                                                                         
                                                      

                                                                         
                                                      

Attorney to transfer the said stock on the books of the within-named Corporation,
with full power of substitution in the premises.

Dated
                                         20                     

	 	 	 
	SIGNATURE GUARANTEED:

	 	X                                                            
	 
	 	 
	 

	 	X                                                            

THE SIGNATURE TO THIS ASSIGNMENT MUST CORRESPOND WITH THE NAME AS WRITTEN UPON THE FACE OF THIS
CERTIFICATE IN EVERY PARTICULAR, WITHOUT ALTERATION OR ENLARGEMENT OR ANY CHANGE WHATSOEVER. THE
SIGNATURE(S) MUST BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION (Banks, Stockbrokers, Savings
and Loan Associations and Credit Unions) WITH MEMBERSHIP IN AN APPROVED SIGNATURE GUARANTEE
MEDALLION PROGRAM.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00105-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00105-of-00352.parquet"}]]