Document:

Placement Agency Agreement

    Exhibit
      10.1

     

    9,768,313
      Shares

     

    Warrants
      to Purchase 11,721,975 Shares

     

    ACACIA
      RESEARCH CORPORATION

     

    Acacia
      Research - CombiMatrix Common Stock ($0.001 par value)

     

    PLACEMENT
      AGENCY AGREEMENT

     

    December
      7, 2006

     

    

    Oppenheimer
      & Co. Inc.

    125
      Broad
      Street

    New
      York,
      New York 10004

    Ladies
      and Gentlemen:

     

    Acacia
      Research Corporation, a Delaware corporation (the “Company”)
      proposes, subject to the terms and conditions contained herein and in the
      Subscription Agreements in the form of Exhibit
      A
      attached
      hereto (the “Subscription
      Agreements”)
      entered into with the Investors identified therein (each an “Investor”
and,
      collectively, the “Investors”),
      to
      issue and sell up to an aggregate of 9,768,313 units (the “Units”),
      each
      consisting of (i) one share (the “Share”
and
      collectively the “Shares”)
      of
      common stock, $0.001 par value per share, designated as Acacia Research -
      CombiMatrix Common Stock (the “AR
      - CombiMatrix Common Stock”),
      of
      the Company and (ii) one warrant (the “Warrant”
and
      collectively the “Warrants”)
      to
      purchase 1.2 shares of AR-CombiMatrix Common Stock substantially in the form
      of
Exhibit
      B
      attached
      hereto. The shares issuable upon the exercise of the Warrants and the Placement
      Agent’s Warrants (as defined in Section 1(a) below) are referred to herein as
      the “Warrant
      Shares”
and,
      together with the Units, the Shares and the Warrants are referred to herein
      as
      the “Securities.”
The
      Company hereby confirms its agreement with Oppenheimer & Co. Inc.
      (“Oppenheimer”)
      acting
      as the placement agent (the “Placement
      Agent”).
      The
      Securities are more fully described in the Registration Statement (as
      hereinafter defined).

     

    1.    Agreement
      to Act as Placement Agent; Delivery and Payment.
      On
      the
      basis of the representations, warranties and agreements of the Company herein
      contained, and subject to all the terms and conditions of this
      Agreement:

     

    (a)    The
      Placement Agent agrees to act as the Company’s exclusive placement agent to
      solicit offers for the purchase of all or part of the Units from the Company
      in
      connection with the proposed issuance and sale, on a commercially reasonable
      efforts basis, by the Company of the Units to the Investors (the “Offering”).
      Upon
      the occurrence of the Closing (as hereinafter defined), the Company shall pay
      to
      the Placement Agent by wire transfer of immediately available funds to an
      account or accounts designated by the Placement Agent an amount equal to seven
      percent (7.0%) of the gross proceeds received by the Company from the sale
      of
      the Units on such Closing Date (as hereinafter defined). In addition, the
      Company shall issue and sell to the Placement Agent and/or its designees, in
      addition to the amount set forth above, warrants (the “Placement
      Agent’s Warrants”)
      to
      purchase 488,416 shares of Common Stock for a purchase price of $0.01 per
      warrant. The Placement Agent’s Warrants will entitle the holder thereof for a
      five-year period commencing on the first day after the six-month anniversary
      of
      the Closing Date to purchase 488,416 shares of AR - CombiMatrix Common Stock
      at
      an exercise price equal to $1.0875 per share. The Placement Agent’s Warrants
      shall be in the form attached hereto as Exhibit
      C.
      The
      Company acknowledges and agrees that the Placement Agent’s engagement hereunder
      is not an agreement by the Placement Agent or any of its affiliates to
      underwrite or purchase any securities or otherwise provide any financing. Under
      no circumstances will the Placement Agent be obligated to purchase any Units
      for
      its own account and, in soliciting purchases of Units, the Placement Agent
      shall
      act solely as the Company’s agent and not as principal. Notwithstanding the
      foregoing, it is understood and agreed that the Placement Agent (or its
      affiliates) may, solely at its discretion and without any obligation to do
      so,
      purchase Units as principal. The Placement Agent shall have no authority to
      bind
      the Company. 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

       

    

    (b)    Payment
      of the purchase price for, and delivery of, the Units shall be made at a closing
      (the “Closing”)
      at
      the
      offices of Greenberg Traurig, LLP, counsel for the Company, located at 650
      Town
      Center Drive, Suite 1700, Costa Mesa, California at 7:00 a.m., local time,
      on
      the third or fourth business day (as permitted under Rule 15c6-1 under the
      Exchange Act) after the determination of the public offering price of the Units
      (such time and date of payment and delivery being herein called the
“Closing
      Date”).
      All
      such actions taken at the Closing shall be deemed to have occurred
      simultaneously.

     

    (c)    Prior
      to
      the Closing, the Placement Agent shall cause each Investor to wire directly
      to
      an escrow account designated by the Placement Agent an amount equal to the
      aggregate purchase price for the number of Units such Investor has agreed to
      purchase.

     

    (d)    On
      the
      Closing Date, the Placement Agent shall cause the aggregate purchase price
      for
      the Units to be wired from the Investors or the escrow account referred to
      in
      Section 1(c) above to an account designated by the Company and the Company
      shall
      deliver, or cause the transfer agent for the Units to deliver, to each Investor
      the number of Units set forth on the signature page to such Investor’s
      Subscription Agreement, which delivery shall be made, with respect to an
      Investor, in accordance with the procedures set forth in such Investor’s
      executed Subscription Agreement.

     

    (e)    The
      purchases of the Units by each of the Investors shall be evidenced by the
      execution of a Subscription Agreement substantially in the form attached hereto
      as Exhibit
      A

     

    (f)    Prior
      to
      the earlier of (i) the date on which this Agreement is terminated and (ii)
      the
      Closing Date, the Company shall not, without the prior written consent of the
      Placement Agent, solicit or accept offers to purchase shares of its
      AR-CombiMatrix Common Stock or other equity or equity-linked securities of
      the
      Company (other than pursuant to the exercise of options or warrants to purchase
      shares of AR-CombiMatrix Common Stock that are outstanding at the date hereof)
      otherwise than through the Placement Agent.

     

    2.    Representations
      and Warranties of the Company.
      The
      Company represents and warrants to the Placement Agent and the Investors as
      of
      the date hereof and as of the Closing Date, as follows:

     

    (a)    RegistrationStatement.
      The
      Company has prepared and filed in conformity with the requirements of the
      Securities Act of 1933, as amended (the “Securities
      Act”),
      and
      published rules and regulations thereunder (the “Rules
      and Regulations”)
      adopted by the Securities and Exchange Commission (the “Commission”)
      a
“shelf”
      Registration Statement (as hereinafter defined) on Form S-3 (No. 333-133529),
      which was declared by the Commission to be effective under the Securities Act
      as
      of May 26, 2006 (the “Effective
      Date”)
      including a Base Prospectus, dated as of the Effective Date, relating to the
      Securities (the “Base
      Prospectus”),
      and
      such amendments and supplements thereto as may have been required to the date
      of
      this Agreement. The Company will next file with the Commission pursuant to
      Rule
      424(b) under the Securities Act a final prospectus supplement to the Base
      Prospectus (a “Prospectus
      Supplement”)
      describing the Units and the offering thereof, in such form as has been provided
      to or discussed with, and approved, by the Placement Agent.

     

    
      
        
        

      

      
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    The
      term
“Registration
      Statement”
      as used
      in this Agreement means the registration statement (including all exhibits,
      financial schedules and all documents and information deemed to be a part of
      the
      Registration Statement pursuant to Rule 430A or 434(d) under the Securities
      Act), as of the Effective Date and as amended and/or supplemented to the date
      of
      this Agreement. The Registration Statement has been declared effective under
      the
      Securities Act and no stop order preventing or suspending the effectiveness
      of
      the Registration Statement or suspending or preventing the use of the Prospectus
      (as defined below) has been issued by the Commission and no proceedings for
      that
      purpose have been instituted or, to the Company’s knowledge, are contemplated by
      the Commission.

     

    The
      term
“Prospectus”
      as used
      in this Agreement means the Base Prospectus together with the Prospectus
      Supplement, except that if such Base Prospectus is amended or supplemented
      prior
      to the date on which the Prospectus Supplement was first filed pursuant to
      Rule
      424, the term “Prospectus”
      shall
      refer to the Base Prospectus as so amended or supplemented and as supplemented
      by the Prospectus Supplement. Any reference herein to the Registration
      Statement, the Base Prospectus, any Prospectus Supplement or the Prospectus
      shall be deemed to refer to and include the documents incorporated by reference
      therein pursuant to Item 12 of Form S-3 (the “Incorporated
      Documents”),
      which
      were filed under the Securities Exchange Act of 1934, as amended (the
“Exchange
      Act”)
      and
      any reference herein to the terms “amend,” “amendment,” or “supplement” with
      respect to the Registration Statement, the Prospectus Supplement or the
      Prospectus shall be deemed to refer to and include (i) the filing of any
      document under the Exchange Act after the Effective Date, or the date of the
      Prospectus, as the case may be, which is incorporated by reference and (ii)
      any
      such document so filed. If the Company has filed an abbreviated registration
      statement to register additional Securities pursuant to Rule 462(b) under the
      Rules (the “462(b)
      Registration Statement”),
      then any
      reference herein to the Registration Statement shall also be deemed to include
      such 462(b) Registration Statement.

     

    (b)    Registration
      Statement and Prospectus.
      On the
      Effective Date, upon the filing or first delivery to the Investors of the
      Prospectus, as of the date hereof, and at the Closing Date, the Registration
      Statement (and any post-effective amendment thereto) and the Prospectus (as
      amended or as supplemented if the Company shall have filed with the Commission
      any amendment or supplement to the Registration Statement or the Prospectus)
      complied and will comply, in all material respects, with the requirements of
      the
      Securities Act and the Rules and Regulations and the Exchange Act and the rules
      and regulations of the Commission thereunder and did not at the Effective Date,
      does not as of the date hereof and will not as of the Closing Date, contain
      any
      untrue statement of a material fact or omit to state any material fact required
      to be stated therein or necessary in order to make the statements therein (in
      light of the circumstances under which they were made, in the case of the
      Prospectus) not misleading. Notwithstanding the foregoing, none of the
      representations and warranties in this paragraph 2(b) shall apply to statements
      in, or omissions from, the Registration Statement or the Prospectus, or any
      amendment or supplement thereto made in reliance upon, and in conformity with,
      information herein or otherwise furnished in writing by or on behalf of the
      Placement Agent to the Company expressly for use in the Registration Statement
      or the Prospectus or any amendment or supplement thereto. The Incorporated
      Documents, at the time they became effective or were filed with the Commission,
      complied in all material respects with the requirements of the Exchange Act
      and
      did not contain any untrue statement of a material fact or omit to state any
      material fact required to be stated therein or necessary in order to make the
      statements therein, in light of the circumstances under which they were made,
      not misleading. The Company has not distributed and will not distribute, prior
      to the completion of the distribution of the Securities, any offering material
      in connection with the offering and sale of the Securities, other than the
      Registration Statement and the Prospectus.

     

    (c)    Subsidiaries.
      The
      Company has no significant subsidiaries (as such term is defined in Rule 1-02
      of
      Regulation S-X promulgated by the Commission) other than as listed in
Schedule
      I
      attached
      hereto (collectively, the “Subsidiaries”).
      All
      of the issued and outstanding shares of capital stock of each of the
      Subsidiaries have been duly and validly authorized and issued and are fully
      paid, nonassessable and free of preemptive and similar rights to subscribe
      for
      or purchase securities, and, except as listed on Schedule
      I
      attached
      hereto or otherwise described in the Registration Statement and Prospectus,
      the
      Company owns directly or indirectly, free and clear of any security interests,
      claims, liens, proxies, equities or other encumbrances, all of the issued and
      outstanding shares of such stock.

     

    
      
        
        

      

      
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    (d)    Financial
      _Statements.
      The
      consolidated financial statements of the Company, together with the related
      schedules and notes thereto, set forth or incorporated by reference in the
      Registration Statement and the Prospectus comply in all material respects with
      the applicable requirements of the Securities Act and the Exchange Act, as
      applicable, and fairly present, in all material respects, (i) the consolidated
      financial condition of the Company and its Subsidiaries as of the dates
      indicated and (ii) the consolidated results of operations, stockholders’ equity
      and changes in cash flows of the Company and the Subsidiaries for the periods
      therein specified; and such financial statements and related schedules and
      notes
      thereto, comply, in all material respects, as to form with the applicable
      accounting requirements under the Securities Act and have been prepared in
      conformity with United States generally accepted accounting principles,
      consistently applied throughout the periods involved (except as otherwise stated
      therein and subject, in the case of unaudited financial statements, to the
      absence of footnotes and normal year-end adjustments). No other financial
      statements or schedules are required by the Securities Act and the Rules and
      Regulations to be included in the Registration Statement or
      Prospectus.

     

    (e)    Independent
      Accountants.
      PricewaterhouseCoopers, LLP (the “Auditors”),
      whose
      report with respect to the audited consolidated financial statements and
      schedules of the Company and its Subsidiaries included in the Prospectus, or
      the
      Registration Statement, or incorporated by reference therein is, and during
      the
      periods covered by its reports, was an independent public accounting firm within
      the meaning of the Securities Act and the Rules and Regulations.

     

    (f)    Organization.
      Each of
      the Company and its Subsidiaries has been duly incorporated or otherwise
      organized and is validly existing as a corporation in good standing under the
      laws of its jurisdiction of incorporation or organization (as applicable).
      Each
      of the Company and its Subsidiaries has full corporate power and authority
      to
      own, lease and operate its properties and assets and to conduct its business
      as
      described in the Registration Statement and Prospectus, and is duly qualified
      to
      do business as a foreign corporation and is in good standing in each
      jurisdiction in which it owns or leases real property or in which the conduct
      of
      its business makes such qualification necessary, except where the failure to
      be
      so qualified or be in good standing, as the case may be, would not, individually
      or in the aggregate, have or reasonably be expected to result in, a material
      adverse effect upon the business, prospects, properties, operations, condition
      (financial or otherwise) or results of operations of the Company and its
      Subsidiaries, taken as a whole (a “Material
      Adverse Effect”).

     

    (g)    No
      Material Adverse Effect.
      Except
      as set forth in the Registration Statement or the Prospectus, subsequent to
      the
      respective dates as of which information is given in the Registration Statement
      and the Prospectus, there has not been (i) any material adverse change in the
      business, properties, management, financial condition or results of operations
      of the Company and its subsidiaries taken as a whole, including any material
      loss or interference with its respective business from fire, explosion, flood
      or
      other calamity, whether or not covered by insurance, or from any labor dispute
      or court or governmental action, order or decree, (ii) any transaction that
      is
      material to the Company and its Subsidiaries taken as a whole, (iii) any
      obligation, direct or contingent (including any off balance sheet obligations),
      incurred by the Company or its Subsidiaries, which is material to the Company
      and its Subsidiaries taken as a whole, (iv) any change in the capital stock
      or
      outstanding indebtedness of the Company or its Subsidiaries (subject to the
      issuance of shares of Common Stock upon exercise of stock options or warrants
      disclosed as outstanding in the Registration Statement and Prospectus and the
      grant of options under existing stock option plans described in the Registration
      Statement and Prospectus) or (v) any dividend or distribution of any kind
      declared, paid or made on the capital stock of the Company.

     

    
      
        
        

      

      
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    (h)    Legal
      Proceedings.
      Except
      as set forth in the Registration Statement and the Prospectus, there is not
      pending or, to the knowledge of the Company, threatened or contemplated, any
      action, suit or proceeding to which the Company or any of its Subsidiaries
      is a
      party or of which any property or assets of the Company or any of its
      Subsidiaries is the subject before or by any court or governmental agency,
      authority or body, or any arbitrator, which, individually or in the aggregate,
      would reasonably be expected to result in any Material Adverse Effect or
      materially and adversely affect the ability of the Company to perform its
      obligations under this Agreement and the Subscription Agreements.

     

    (i)    Sufficiency
      of Disclosure.
      There
      are (i) no current or pending legal, governmental or regulatory actions, suits
      or proceedings that are required under the Securities Act to be described in
      the
      Registration Statement and Prospectus that have not been so described and (ii)
      there are no affiliate transactions, off-balance sheet transactions, contracts,
      licenses, agreements, leases or other documents of a character required to
      be
      described in the Registration Statement or the Prospectus or to be filed as
      exhibits to the Registration Statement that are not so described or filed as
      required.

     

    (j)    Due
      Authorization and Enforceability.
      The
      Company has full legal power and authority to enter into this Agreement and
      the
      Subscription Agreements and to consummate the transactions contemplated hereby
      and thereby. This Agreement and each of the Subscription Agreements have been
      duly authorized, executed and delivered by the Company, and constitute valid,
      legal and binding obligations of the Company, enforceable in accordance with
      their terms, except as rights to indemnity hereunder may be limited by
      applicable laws and except as such enforceability may be limited by bankruptcy,
      insolvency, reorganization, moratorium or similar laws affecting the rights
      and
      remedies of creditors generally or subject to general principles of
      equity.

     

    (k)    The
      Shares.
      The
      Shares have been duly and validly authorized by the Company and, when issued,
      delivered and paid for in accordance with the terms of this Agreement, will
      have
      been duly and validly issued and will be fully paid and nonassessable; and
      the
      capital stock of the Company, including the AR-CombiMatrix Common Stock,
      conforms to the description thereof in the Registration Statement and
      Prospectus. Except as otherwise stated in the Registration Statement and
      Prospectus, there are no preemptive rights or other rights to subscribe for
      or
      to purchase, or any restriction upon the voting or transfer of, any shares
      of AR
      -CombiMatrix Common Stock pursuant to the Company’s charter, bylaws or any
      agreement or other instrument to which the Company is a party or by which the
      Company is bound that have not been waived or complied with.

     

    (l)    The
      Warrants and the Placement Agent’s Warrants.
      The
      Company has the full right, power and authority to enter into the Warrants
      and
      the Placement Agent’s Warrants and to perform and discharge its obligations
      thereunder. The Warrants and the Placement Agent’s Warrants have been duly and
      validly authorized by the Company and upon delivery to the Investors at the
      Closing Date will be duly issued and will constitute legal, valid and binding
      obligations of the Company, enforceable in accordance with their terms, except
      as such enforceability may be limited by bankruptcy, insolvency, reorganization,
      moratorium or similar laws affecting the rights and remedies of creditors
      generally or subject to general principles of equity. The Warrant Shares have
      been duly authorized and reserved for issuance upon the exercise of the Warrants
      and the Placement Agent’s Warrants and when issued upon payment of the exercise
      price therefor will be validly issued, fully paid and
      nonassessable.

     

    
      
        
        

      

      
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    (m)    No
      Conflicts.
      The
      execution, delivery and performance by the Company of this Agreement, the
      Warrants and the Placement Agent’s Warrants, and each of the Subscription
      Agreements and the consummation of the transactions herein and therein
      contemplated, including the issuance and sale of the Securities, will not (i)
      conflict with or result in a breach or violation of any of the terms or
      provisions of, or constitute a default (or an event which with notice or lapse
      of time or both would constitute a default) under, or require any consent or
      waiver under, or result in the execution of any lien, charge or encumbrance
      upon
      any properties or assets of the Company or its Subsidiaries pursuant to the
      terms of, any indenture, mortgage, deed of trust, loan agreement or other
      agreement or instrument to which the Company or any of its Subsidiaries is
      a
      party or by which the Company or any of its Subsidiaries is bound or to which
      any of the property or assets of the Company or any of its Subsidiaries is
      subject, (ii) result in any violation of the provisions of the charter or
      by-laws of the Company or any of its Subsidiaries or (iii) result in any
      violation of any franchise, license, permit, statute, law, rule or regulation
      applicable to the Company or any judgment, order or decree of any court or
      governmental agency or body having jurisdiction over the Company or any of
      its
      Subsidiaries or any of their properties or assets, except, in the case of each
      of clauses (i) and (iii) above, for any such conflict, breach, violation,
      default, lien, charge or encumbrance that would not, individually or in the
      aggregate, reasonably be expected to result in a Material Adverse
      Effect.

     

    (n)    No
      Consents Required.
      No
      consent, approval, authorization, filing with or order of or registration with,
      any court or governmental agency or body, or approval of the shareholders of
      the
      Company, is required for the execution, delivery and performance of this
      Agreement, the Warrants and the Placement Agent’s Warrants, and each of the
      Subscription Agreements or for the consummation of the transactions contemplated
      hereby and thereby, including the issuance or sale of the Securities by the
      Company, except such as have been obtained or made, and such as may be required
      under the securities, or blue sky, laws of any jurisdiction in connection with
      the offer and sale of the Units by the Company in the manner contemplated herein
      and in the Registration Statement and the Prospectus.

     

    (o)    Capitalization.
      All of
      the issued and outstanding shares of capital stock of the Company, including
      the
      outstanding shares of AR-CombiMatrix Common Stock, are duly authorized and
      validly issued, fully paid and nonassessable, have been issued in compliance
      with all federal and state securities laws, were not issued in violation of
      or
      subject to any preemptive rights or other rights to subscribe for or purchase
      securities that have not been waived in writing. As of the date hereof and
      as of
      the Closing Date, the Company has or will have, as the case may be, an
      authorized, issued and outstanding capitalization as is set forth in the
      Registration Statement and the Prospectus (subject, in each case, to the
      issuance of shares of Common Stock upon exercise of stock options and warrants
      disclosed as outstanding in the Registration Statement and the Prospectus and
      grant of options under existing stock option plans described in the Registration
      Statement and the Prospectus, and such authorized capital stock conforms to
      the
      description thereof set forth in the Registration Statement and the Prospectus.
      Except as described in the Registration Statement and the Prospectus, as of
      the
      date referred to therein, the Company did not have outstanding any options,
      warrants, agreements, contracts or other rights in existence to purchase or
      acquire from the Company or any Subsidiary of the Company any shares of the
      capital stock of the Company or any Subsidiary of the Company.

     

    (p)    Title
      to Real and Personal Property.
      The
      Company and each of its Subsidiaries has good and valid title to all property
      (whether real or personal) described in the Registration Statement and
      Prospectus as being owned by each of them, in each case free and clear of all
      liens, claims, security interests, other encumbrances or defects except such
      as
      are described in the Registration Statement and the Prospectus and those that
      do
      not materially and adversely affect the value of such property and do not
      materially interfere with the use made of such property by the Company. All
      of
      the property described in the Registration Statement and the Prospectus as
      being
      held under lease by the Company or a Subsidiary are held thereby under valid,
      subsisting and enforceable leases.

     

    
      
        
        

      

      
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    (q)    Title
      to Intellectual Property.
      The
      Company 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 has not received written
      notice, and has no knowledge of, any rights of third parties to any such
      Intellectual Property; (b) to the Company’s knowledge, there is no infringement
      by third parties of any such Intellectual Property; (c) there is no pending
      or,
      to the Company’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 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 knowledge,
      threatened action, suit, proceeding or claim by others that CombiMatrix Group
      infringes or otherwise violates any patent, trademark, copyright, trade secret
      or other proprietary rights of others; (f) to the Company’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. § 135) has
      been commenced against any patent or patent application which constitutes the
      Intellectual Property described in the Prospectus; and (g) the CombiMatrix
      Group
      has 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.

     

    (r)    No
      Violation or Default.
      Neither
      the Company nor any of its Subsidiaries is (i) in violation of any provision
      of
      its charter or bylaws or similar organizational documents, (ii) is in default
      in
      any respect, and no event has occurred which, with notice or lapse of time
      or
      both, would constitute such a default, in the due performance or observance
      of
      any term, covenant, or condition of any indenture, contract, lease, mortgage,
      deed of trust, note agreement, loan agreement or other agreement, obligation,
      condition, covenant or instrument to which it is a party or by which it is
      bound
      or to which any of its property or assets is subject, or (iii) is in violation
      in any respect of any statute, law, rule, regulation, ordinance, judgment,
      order
      or decree of any court, regulatory body, administrative agency, governmental
      body, arbitrator or other authority having jurisdiction over the Company, its
      Subsidiaries or any of its properties of which it has knowledge, as applicable,
      except, with respect to clauses (ii) and (iii), any violations or defaults
      which, singularly or in the aggregate, would not reasonably be expected to
      result in a Material Adverse Effect.

     

    (s)    Permits.
      The
      Company and each of its Subsidiaries has made all filings, applications and
      submissions required by, and possesses all approvals, licenses, certificates,
      certifications, clearances, consents, exemptions, marks, notifications, orders,
      permits and other authorizations issued by, the appropriate federal, state
      or
      foreign regulatory authorities necessary to conduct its businesses as described
      in the Registration Statement and the Prospectus (collectively, “Permits”),
      except
      for such Permits the failure of which to obtain would not reasonably be expected
      to result in a Material Adverse Effect, and is in compliance with the terms
      and
      conditions of all such Permits; all of such Permits held by the Company and
      each
      of its Subsidiaries are valid and in full force and effect; there is no pending
      or, to its knowledge, threatened action, suit, claim or proceeding which may
      cause any such Permit to be limited, revoked, cancelled, suspended, modified
      or
      not renewed, except for such limitations, revocations, cancellations,
      suspensions, modifications or non-renewals that would not reasonably be expected
      to result in a Material Adverse Effect; and the Company and each of its
      Subsidiaries has not received any notice of proceedings relating to the
      limitation, revocation, cancellation, suspension, modification or non-renewal
      of
      any such Permit which, singly or in the aggregate, if the subject of an
      unfavorable decision, ruling or finding, would reasonably be expected to result
      in a Material Adverse Effect, whether or not arising from transactions in the
      ordinary course of business and has no reason to believe that any such license,
      certificate, permit or authorization will not be renewed in the ordinary
      course.

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

       

    

    (t)    Taxes.
      The
      Company and its Subsidiaries have timely filed all federal, state, local and
      foreign income and franchise tax returns (or timely filed applicable extensions
      therefore) required to be filed and are not in default in the payment of any
      taxes which were payable pursuant to said returns or any assessments with
      respect thereto, other than any which the Company or any of its Subsidiaries
      is
      contesting in good faith and for which adequate reserves have been
      provided.

     

    (u)    Listing.
      The
      AR-CombiMatrix Common Stock (including the Shares and the Warrant Shares) is
      registered pursuant to Section 12(g) of the Exchange Act and the Company, in
      the
      two years preceding the date hereof, has not received any notification (written
      or oral) from the Nasdaq Global Market, any stock exchange, market or trading
      facility on which the AR-CombiMatrix Common Stock is or has been listed (or
      on
      which it has been quoted) to the effect that the Company is not in compliance
      with the listing or maintenance requirements of such exchange, market or trading
      facility. The Company shall comply with all requirements of the Nasdaq Global
      Market with respect to the issuance of the Securities and shall use its best
      efforts to have the Shares and the Warrant Shares listed on the Nasdaq Global
      Market on or before the Closing Date.

     

    (v)    Internal
      Controls.
      The
      Company and each of its Subsidiaries maintains a system of internal accounting
      controls sufficient to provide reasonable assurances that (i)
      transactions
      are executed in accordance with management’s general or specific authorization;
(ii)
      transactions
      are recorded as necessary to permit preparation of financial statements in
      conformity with generally accepted accounting principles and to maintain
      accountability for assets; (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 existing assets at
      reasonable intervals and appropriate action is taken with respect to any
      differences.

     

    (w)    Disclosure
      Controls.
      The
      Company has established and maintains disclosure controls and procedures (as
      such term is defined in Rule 13a-15e and 15d-15e under the Exchange Act), which
      (i) are designed to ensure that material information relating to the Company
      is
      made known to the Company’s principal executive officer and its principal
      financial officer by others within those entities, particularly during the
      periods in which the periodic reports required under the Exchange Act are being
      prepared; (ii) provide for the periodic evaluation of the effectiveness of
      such
      disclosure controls and procedures as of the end of each of the Company’s
      quarterly and annual fiscal periods; and (iii), as of the end of the periods
      covered by each periodic report filed under the Exchange Act and incorporated
      by
      reference into the Prospectus, were effective in all material respects to
      perform the functions for which they were established. The Company’s auditors
      and the Audit Committee of the Board of Directors have been advised of (i)
      any
      significant deficiency in the design or operation of internal controls which
      could adversely affect the Company’s ability to record, process, summarize and
      report financial data or any material weaknesses in internal controls; or (ii)
      any fraud, whether or not material, that involves management or other employees
      who have a significant role in the Company’s internal controls. Since the date
      of the most recent evaluation of such disclosure controls and procedures, there
      have been no changes that have materially affected, or are reasonably likely
      to
      materially affect, the Company’s internal control over financial reporting,
      including any corrective actions with regard to significant deficiencies and
      material weaknesses.

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

       

    

    (x)    No
      Undisclosed Relationships.
      No
      relationship, direct or indirect, exists between or among the Company on the
      one
      hand and the directors, officers, stockholders, customers or suppliers of the
      Company on the other hand which is required to be described in the Prospectus
      and which is not so described.

     

    (y)    No
      Registration Rights.
      Except
      as described in the Prospectus, no person or entity has the right, contractual
      or otherwise, to require registration of shares of AR-CombiMatrix Common Stock
      or other securities of the Company because of the filing or effectiveness of
      the
      Registration Statement or otherwise, except for persons and entities who have
      expressly waived such right or who have been given proper notice and have failed
      to exercise such right within the time or times required under the terms and
      conditions of such right, and the Company is not required to file any
      registration statement for the registration of any securities of any person
      or
      register any such securities pursuant to any other registration statement filed
      by the Company under the Securities Act for a period of at least 180 days after
      the Effective Date.

     

    (z)    Sarbanes-Oxley
      Act.
      The
      principal executive officer and principal financial officer of the Company
      have
      made all certifications required by Sections 302 and 906 of the Sarbanes-Oxley
      Act of 2002 and the rules and regulations promulgated in connection therewith
      (the “Sarbanes:Oxley
      Act”)
      with
      respect to all reports, schedules, forms, statements and other documents
      required to be filed by it with the Commission, and the statements contained
      in
      any such certification are complete and correct.
      The
      Company, and to its knowledge after due inquiry, all of the Company’s directors
      or officers, in their capacities as such, is in compliance in all material
      respects with all applicable effective provisions of the Sarbanes-Oxley Act
      (and
      intends to comply with all applicable provisions that are not yet effective
      upon
      effectiveness).

     

    (aa)         Compliance
      with Environmental Laws.
      (i) The
      Company and each of its Subsidiaries is in compliance in all material respects
      with all rules, laws and regulation relating to the use, treatment, storage
      and
      disposal of toxic substances and protection of human health and safety or the
      environment (“Environmental
      Laws”)
      which
      are applicable to its business, except where the failure to comply would not
      reasonably be expected to result in a Material Adverse Effect; (ii) neither
      the
      Company nor its Subsidiaries has received any written notice from any
      governmental authority or third party of an asserted claim under Environmental
      Laws; (iii) the Company and each of its Subsidiaries has received all material
      permits, licenses or other approvals required of it under applicable
      Environmental Laws to conduct its business and is in compliance with all
      material terms and conditions of any such permit, license or approval, except
      where the failure to receive or comply would not reasonably be expected to
      result in a Material Adverse Effect; (iv) to the Company’s knowledge after
      reasonable due inquiry, no facts currently exist that will require the Company
      or any of its Subsidiaries to make future material capital expenditures to
      comply with Environmental Laws; and (v) no property which is or has been owned,
      leased or occupied by the Company or its Subsidiaries has been designated as
      a
      Superfund site pursuant to the Comprehensive Environmental Response,
      Compensation of Liability Act of 1980, as amended (42 U.S.C. Section 9601,
      et.
      seq,) (“CERCLA”)
      or
      otherwise designated as a contaminated site under applicable state or local
      law.
      Neither the Company nor any of its Subsidiaries has been named as a “potentially
      responsible party” under CERCLA.

     

    (bb)  Compliance
      with ERISA.
      Each of
      the Company and its Subsidiaries has fulfilled its obligations, if any, under
      the minimum funding standards of Section 302 of the United States Employee
      Retirement Income Security Act of 1974 (“ERISA”)
      and
      the regulations and published interpretations thereunder with respect to each
      “plan”
(as
      defined in Section 3(3) of ERISA and such regulations and published
      interpretations) in which employees of the Company and its Subsidiaries are
      eligible to participate and each such plan is in compliance in all material
      respects with the presently applicable provisions of ERISA and such regulations
      and published interpretations. No “prohibited
      transaction”
(as
      defined in Section 406 of ERISA, or Section 4975 of the Internal Revenue Code
      of
      1986, as amended from time to time (the “Code”))
      has
      occurred with respect to any employee benefit plan which could reasonably be
      expected to result in a Material Adverse Effect. The Company and each of its
      Subsidiaries has not incurred any unpaid liability to the Pension Benefit
      Guaranty Corporation (other than for the payment of premiums in the ordinary
      course) or to any such plan under Title IV of ERISA,

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

       

    

    (cc)  No
      Labor Disputes.
      No
      labor problem or dispute with the employees of the Company or any of its
      Subsidiaries exists or, to the Company’s knowledge, is threatened or imminent,
      which would reasonably be expected to result in a Material Adverse Effect.
      The
      Company is not aware that any key employee or significant group of employees
      of
      the Company or any of its Subsidiaries plans to terminate employment with the
      Company or any such Subsidiary.

     

    (dd)  Insurance.
      The
      Company and each of its Subsidiaries is insured by insurers of recognized
      financial responsibility against such losses and risks and in such amounts
      as
      are prudent and customary in the businesses in which they are engaged or propose
      to engage after giving effect to the transactions described in the Prospectus;
      all policies of insurance and fidelity or surety bonds insuring the Company
      and
      each of its Subsidiaries and their businesses, assets, employees, officers
      and
      directors are in full force and effect; the Company and each of its Subsidiaries
      is in compliance with the terms of such policies and instruments in all material
      respects; and the Company and each of its Subsidiaries has no 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 is not materially greater
      than the current cost, except where the failure to obtain would not reasonably
      be expected to result in a Material Adverse Effect.

     

    (ee)  No
      Stabilization.
      Neither
      the Company nor any of its Subsidiaries nor, to its knowledge after reasonable
      due inquiry, any of their officers, directors, affiliates or controlling persons
      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.

     

    (ff)  Investment
      Company Act.
      Neither
      the Company nor any of its Subsidiaries is or, after giving effect to the
      offering and sale of the Securities and the application of the proceeds thereof
      as described in the Prospectus, will be required to register as an “investment
      company” as defined in the Investment Company Act of 1940, as
      amended.

     

    (gg)  No
      Broker’s Fees.
      Neither
      the Company nor any of its Subsidiaries is a party to any contract, agreement
      or
      understanding with any person (other than this Agreement) that would give rise
      to a valid claim against the Company or its Subsidiaries or the Placement Agent
      for a brokerage commission, finder’s fee or like payment in connection with the
      offering and sale of the Securities.

     

    (hh)  Contracts.
      Each
      description of a contract, document or other agreement in the Registration
      Statement and the Prospectus accurately reflects in all material respects the
      terms of the underlying contract, document or other agreement. Each contract,
      document or other agreement described in the Registration Statement and
      Prospectus or listed in the exhibits to the Registration Statement or
      incorporated therein by reference is in full force and effect, unless validly
      terminated in accordance with the provisions thereof, and is valid and
      enforceable by and against the Company or its Subsidiary, as the case may be,
      in
      accordance with its terms, except as such enforceability may be limited by
      bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
      the
      rights and remedies of creditors generally and subject to general principles
      of
      equity, Neither the Company nor any of its Subsidiaries, if a Subsidiary is
      a
      party, nor to the Company’s knowledge, any other party, is in default in the
      observance or performance of any term or obligation to be performed by it under
      any such agreement, and no event has occurred which with notice or lapse of
      time
      or both would constitute such a default, in any such case which default or
      event, individually or in the aggregate, would reasonably be expected to result
      in a Material Adverse Effect.

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

       

    

    (ii)  Forward-Looking
      Statements.
      No
      forward-looking statement (within the meaning of Section 27A of the Securities
      Act and Section 21E of the Exchange Act) contained in the Registration Statement
      and the Prospectus has been made or reaffirmed without a reasonable basis or
      has
      been disclosed other than in good faith.

     

    (jj)  Corporate
      Records.
      All
      existing minute books of the Company and each of its Subsidiaries, including
      all
      existing records of all meetings and actions of the board of directors
      (including, Audit, Compensation and Nomination/Corporate Governance Committees)
      and stockholders of the Company through the date of the latest meeting and
      action (collectively, the “Corporate
      Records”)
      have
      been made available to the Placement Agent and counsel for the Placement Agent.
      All such Corporate Records are complete in all material respects and accurately
      and fairly reflect, in reasonable detail, all transactions referred to in such
      Corporate Records.

     

    (kk)  Foreign
      Corrupt Practices.
      Neither
      the Company nor any of its Subsidiaries, nor, to the knowledge of the Company
      after reasonable due inquiry, any director, officer, agent or employee of the
      Company or its Subsidiaries, has, directly or indirectly, while acting on behalf
      of the Company or its Subsidiaries (i) used any corporate funds for unlawful
      contributions, gifts, entertainment or other unlawful expenses relating to
      political activity; (ii) made any unlawful payment to foreign or domestic
      government officials or employees or to foreign or domestic political parties
      or
      campaigns from corporate funds; (iii) violated any provision of the Foreign
      Corrupt Practices Act of 1977, as amended; (iv) made any other unlawful bribe,
      rebate, payoff, influence, kickback or payment to any foreign or domestic
      government official or employee.

     

    (ll)  Off-Balance
      Sheet Arrangements.
      There
      are no material off balance sheet arrangements (as defined in Item 303 of
      Regulation S-K) that have or would reasonably be likely to have a material
      current or future effect on the Company’s financial condition, revenues or
      expenses, changes in financial condition, results of operations, liquidity,
      capital expenditures or capital resources, including those off-balance sheet
      transactions described in the Commission’s Statement about Management’s
      Discussion and Analysis of Financial Conditions and Results of Operations
      (Release Nos 33-8056; 34-45321; FR-61), required to be described in the
      Prospectus which have not been so described.

     

    (mm)  Regulatory
      Filings.
      Each of
      the Company and its Subsidiaries has filed with the applicable regulatory
      authorities all filings, declarations, listings, registrations, reports and
      submissions required to be filed; all
      such
      filings, declarations, listings, registrations, reports or submissions were
      in
      compliance with applicable laws when filed and no deficiencies have been
      asserted by any applicable regulatory authority with respect to any such
      filings, declarations, listings, registrations, repots or submissions. To the
      Company’s knowledge after reasonable due inquiry, there are no affiliations or
      associations between any member of the National Association of Securities
      Dealers, Inc. (the “NASD”)
      and
      any of the Company’s officers, directors or any five percent (5%) or greater
      shareholders of the Company, except as set forth in the Registration Statement
      and the Prospectus or otherwise disclosed in writing to the Placement
      Agent.

     

    Any
      certificate signed by any officer of the Company and delivered to the Placement
      Agent or to counsel for the Placement Agent shall be deemed a representation
      and
      warranty by the Company to the Placement Agent and the Investors as to the
      matters covered thereby.

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

       

    

    3.    Delivery
      and Payment. On
      the
      Closing Date, in accordance with the terms and conditions of each Investor’s
      respective Subscription Agreement, the Company shall sell to, and the
      Investor(s) shall purchase, the number of Units reflected on such Investor’s
      Subscription Agreement against payment by such Investor of such Investor’s
      aggregate purchase price therefor reflected in the Investor’s Subscription
      Agreement.

     

    4.    Covenants.
      The
      Company covenants and agrees with the Placement Agent as follows:

     

    (a)    Effectiveness.
      The
      Registration Statement has become effective, and if Rule 430A is used or the
      filing of the Prospectus Supplement is otherwise required pursuant to Rule
      424(b), the Company shall prepare the Prospectus Supplement in a form approved
      by the Placement Agent and file such Prospectus pursuant to Rule 424(b) not
      later than the Commission’s close of business on the business day following the
      execution and delivery of this Agreement, or, if applicable, such earlier time
      as may be required by the Rules and Regulations.

     

    (b)    Amendments
      or Supplements; Free Writing Prospectuses.
      The
      Company will not, during such period as the Prospectus would be required by
      law
      to be delivered in connection with sales of the Units by the Placement Agent
      or
      a dealer in connection with the offering contemplated by this Agreement, file
      any amendment or supplement to the Registration Statement or the Prospectus,
      except as required by law, unless a copy thereof shall first have been submitted
      to the Placement Agent within a reasonable period of time prior to the filing
      thereof and the Placement Agent shall not have reasonably objected thereto
      in
      good faith. The Company represents and agrees that it has not made and will
      not,
      make any offer relating to the Units that would constitute a “free writing
      prospectus” as defined in Rule 405 under the Securities Act (“Issuer
      Free Writing Prospectus”).
      

     

    (c)    Notice
      to Placement Agent.
      The
      Company agrees (i) for so long as the delivery of a prospectus is required
      in
      connection with the offering or sale of the Securities, to advise the Placement
      Agent promptly after it receives notice thereof, of the time when any post
      effective amendment to the Registration Statement has been filed or becomes
      effective or any supplement to the Prospectus or any amended Prospectus has
      been
      filed and to furnish the Placement Agent with copies thereof, (ii) to file
      promptly all reports and any definitive proxy or information statements required
      to be filed by the Company with the Commission pursuant to Section 13(a), 15
      or
      15(d) of the Exchange Act subsequent to the date of the Prospectus Supplement
      and for so long as the delivery of a prospectus is required in connection with
      the offering or sale of the Units; (iii) to advise the Placement Agent, promptly
      after it receives notices thereof, (x) of any request by the Commission to
      amend
      the Registration Statement or to amend or supplement the Prospectus or for
      additional information with respect thereto, (y) of the issuance by the
      Commission, of any stop order suspending the effectiveness of the Registration
      Statement or any post-effective amendment thereto or any order directed at
      any
      document incorporated by reference therein or any amendment or supplement
      thereto or any order preventing or suspending the use of the Prospectus or
      any
      amendment or supplement thereto, or (z) of the suspension of the qualification
      of the Securities for offering or sale in any jurisdiction, or of the
      institution or threatening of any proceeding for any such purpose, or of any
      request by the Commission for the amending or supplementing of the Registration
      Statement or the Prospectus or for additional information; and, (iv) in the
      event of the issuance of any stop order or of any order preventing or suspending
      the use of the Prospectus or suspending any such qualification, promptly to
      use
      its reasonable best efforts to obtain the withdrawal of such order.

     

    (d)    Ongoing
      Compliance of the Prospectus.
      If, at
      any time when a Prospectus relating to the Securities is required to be
      delivered under the Act, the Company becomes aware of the occurrence of any
      event as a result of which the Prospectus, as then amended or supplemented,
      would, in the reasonable judgment of counsel to the Company or counsel to the
      Placement Agent, include any untrue statement of a material fact or omit to
      state a material fact necessary in order to make the statements therein, in
      the
      light of the circumstances under which they were made, not misleading, or the
      Registration Statement, as then amended or supplemented, would, in the
      reasonable judgment of counsel to the Company or counsel to the Placement Agent,
      include any untrue statement of a material fact or omit to state a material
      fact
      necessary to make the statements therein not misleading, or if for any other
      reason it is necessary, in the reasonable judgment of counsel to the Company
      or
      counsel to the Placement Agent, at any time to amend or supplement the
      Prospectus or the Registration Statement to comply with the Act or the Rules
      and
      Regulations, the Company will promptly notify the Placement Agent and, subject
      to Section 4(b) hereof, will promptly prepare and file with the Commission,
      at
      the Company’s expense, an amendment to the Registration Statement or an
      amendment or supplement to the Prospectus that corrects such statement or
      omission or effects such compliance and will deliver to the Placement Agent,
      without charge, such number of copies thereof as the Placement Agent may
      reasonably request. The Company consents to the use of the Prospectus or any
      amendment or supplement thereto by the Placement Agent, and the Placement Agent
      agrees to provide to each Investor, prior to the Closing, a copy of the
      Prospectus and any amendments or supplements thereto.

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

       

    

    (e)    Delivery
      of Copies.
      To
      deliver promptly to the Placement Agent and its counsel such number of the
      following documents as the Placement Agent shall reasonably request: (i)
      conformed copies of the Registration Statement as originally filed with the
      Commission and each amendment thereto (in each case excluding exhibits), (ii)
      so
      long as a prospectus relating to the Securities is required to be delivered
      under the Securities Act, as many copies of the Prospectus or any amendment
      or
      supplement thereto; (iii) any document incorporated by reference in the
      Prospectus and (iv) all correspondence to and from, and all documents issued
      to
      and by, the Commission in connection with the registration of the Securities
      under the Securities Act. The Company will pay the expenses of printing or
      other
      production of all documents relating to the Offering.

     

    (f)    Use
      of
      Proceeds.
      The
      Company will apply the net proceeds from the sale of the Securities in the
      manner set forth in the Prospectus under the heading “Use of
      Proceeds”.

     

    (g)    Reports.
      During
      a period of three years commencing with the date hereof, the Company will
      furnish to the Placement Agent, copies of all periodic and special reports
      furnished to the stockholders of the Company and all information, documents
      and
      reports filed with the Commission, the NASD, Nasdaq or any securities exchange
      (other than any such information, documents and reports that are filed with
      the
      Commission electronically via EDGAR or any successor system).

     

    (h)    Blue
      Sky Compliance.
      The
      Company will promptly take from time to time such actions as the Placement
      Agent
      may reasonably request to qualify the Securities for offering and sale under
      the
      securities, or blue sky, laws of such jurisdictions as the Placement Agent
      may
      designate and to continue such qualifications in effect for so long as required
      for the distribution of the Securities and will pay the fee, if any, of the
      NASD
      in connection with its review of the Offering. The Company shall not be
      obligated to qualify as a foreign corporation in any jurisdiction in which
      it is
      not so qualified or to file a general consent to service of process in any
      jurisdiction or subject itself to taxation as doing business in any
      jurisdiction.

     

    (i)    Lock-Up
      Agreements.
      The
      Company will cause each of its executive officers and directors whose names
      are
      set forth on Exhibit
      D
      hereto
      to furnish to the Placement Agent, prior to the Closing Date, a letter,
      substantially in the form of Exhibit
      E
      hereto
      (the “Lock-Up
      Agreement”).
      The
      Company will enforce the terms of each Lock-Up Agreement and issue stop transfer
      instructions to the transfer agent for the AR-CombiMatrix Common Stock with
      respect to any transaction or contemplated transaction that would constitute
      a
      breach or default under the applicable Lock-Up Agreement.

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

       

    

    (j)    Press
      Releases.
      Prior
      to the Closing Date, the Company will not issue any press release or other
      communication directly or indirectly or hold any press conference with respect
      to the Company, its Subsidiaries, its condition, financial or otherwise, or
      earnings, business affairs or business prospects (except for routine oral
      marketing communications in the ordinary course of business and consistent
      with
      the past practices of the Company and of which the Placement Agent is notified),
      without the prior written consent of the Placement Agent, unless in the
      reasonable judgment of the Company and its counsel, and after notification
      to
      the Placement Agent, such press release or communication is required by
      law.

     

    (k)    Compliance
      with Laws.
      The
      Company will comply in all material respects with all applicable securities
      and
      other applicable laws, rules and regulations, including, without limitation,
      the
      Sarbanes-Oxley Act, and use its best efforts to cause the Company’s directors
      and officers, in their capacities as such, to comply with such laws, rules
      and
      regulations, including, without limitation, the provisions of the Sarbanes-Oxley
      Act.

     

    (l)    Maintenance
      of Internal Procedures.
      The
      Company and its Subsidiaries will maintain such controls and other procedures,
      including without limitation those required by Sections 302 and 906 of the
      Sarbanes-Oxley Act and the applicable regulations thereunder, that are designed
      to ensure that information required to be disclosed by the Company in the
      reports that it files or submits under the Exchange Act is recorded, processed,
      summarized and reported within the time periods specified in the Commission’s
      rules and forms, including without limitation, controls and procedures designed
      to ensure that information required to be disclosed by the Company in the
      reports that it files or submits under the Exchange Act is accumulated and
      communicated to the Company’s management, including its principal executive
      officer and its principal financial officer, or persons performing similar
      functions, as appropriate to allow timely decisions regarding required
      disclosure, to ensure that material information relating to Company, including
      its Subsidiaries, is made known to them by others within those
      entities.

     

    (m)    Transfer
      Agent.
      The
      Company shall engage and maintain, at its expense, a registrar and transfer
      agent for the Securities.

     

    (n)    Reservation
      of Stock.
      The
      Company shall reserve and keep available at all times a sufficient number of
      shares of AR-CombiMatrix Common Stock for the purpose of enabling the Company
      to
      issue the Warrant Shares.

     

    (o)    Listing.
      The
      Company shall use its best efforts to cause the qualification of the Shares
      and
      Warrant Shares for quotation on the Nasdaq Global Market.

     

    (p)    SEDA
      Termination.
      At or
      prior to Closing, the Company shall terminate its equity line with Cornell
      Capital Partners, LP pursuant to a standby equity distribution agreement dated
      as of June 14, 2006.

     

    (q)    Issuance
      of Securities.
      For
      purposes of this subsection (q), the following definitions shall
      apply:

     

    (i)    “Approved
      Stock Plan”
means
      any employee benefit plan which has been approved by the Board of Directors
      of
      the Company, pursuant to which the Company’s securities may be issued to any
      employee, officer or director for services provided to the Company.

     

    (ii)   “Common
      Stock Equivalents”
means,
      collectively, Options and Convertible Securities.

     

    
      
        
        

      

      
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    (iii)         
      “Convertible
      Securities”
means
      any stock or securities (other than Options) convertible into or exercisable
      or
      exchangeable for AR - CombiMatrix Common Stock.

     

    (iv)   “Excluded
      Securities”
means
      AR - CombiMatrix Common Stock issued or issuable: (i) as a stock dividend to
      holders of AR - CombiMatrix Common Stock or upon any subdivision or combination
      of shares of AR - CombiMatrix Common Stock; (ii) in connection with any Approved
      Stock Plan; (iii) any securities issued to the seller as consideration for
      the
      acquisition of another entity by the Company by merger or share exchange
      (whereby the Company owns no less than 51% of the voting power of the surviving
      entity) or purchase of substantially all of such entity’s stock or assets; (iv)
      any securities issued in connection with a license, strategic partnership,
      joint
      venture or other similar agreement, provided that the purpose of such
      arrangement is not primarily the raising of capital; (v) upon exercise of
      warrants issued as a part of the issuance of straight debt securities (with
      no
      equity or equity-linked feature) issued to a financial institution or lender
      in
      connection with a bank loan, credit, lease, or other debt transaction with
      such
      financial institution or lender (where warrant coverage is not greater than
      5%);
      or (vi) upon conversion of any Options or Convertible Securities which are
      outstanding on the day immediately preceding the Closing Date, provided that
      the
      terms of such Options or Convertible Securities are not amended, modified,
      or
      changed on or after the Closing Date.

     

    (v)    “Options”
means
      any rights, warrants or options to subscribe for or purchase Common Stock or
      Convertible Securities.

     

    From
      the
      date hereof until the date that is 90 days after the Closing Date, the Company
      will not, directly or indirectly, offer, sell, grant any option to purchase,
      or
      otherwise dispose of (or announce any offer, sale, grant or any option to
      purchase or other disposition of) any of its or its subsidiaries’ equity or
      equity equivalent securities, including without limitation any debt, preferred
      stock or other instrument or security that is, at any time during its life
      and
      under any circumstances, convertible into or exchangeable or exercisable for
      shares of AR - CombiMatrix Common Stock or Common Stock Equivalents. The
      restrictions contained in this section shall not apply in connection with the
      issuance of any Excluded Securities.

     

    5.    Payment
      Of Expenses.
      The
      Company, whether or not the transactions contemplated hereunder are consummated
      or this Agreement is terminated, will pay or cause to be paid all costs and
      expenses incident to the performance of the obligations of the Company under
      this Agreement, including but not limited to costs and expenses of or relating
      to (i) the preparation, printing, filing, delivery, and shipping (including
      costs of mailing) of the Registration Statement (including the financial
      statements therein and all amendments, schedules, and exhibits thereto), the
      Base Prospectus, each Prospectus Supplement, the Prospectus, and any amendment
      thereof or supplement thereto, (ii) the registration, issue, sale and delivery
      of the Securities including any stock or transfer taxes and stamp or similar
      duties payable upon the sale, issuance or delivery of the Securities and the
      printing, delivery, and shipping of the certificates representing the
      Securities, (iii) all filing fees and fees and disbursements of the Placement
      Agent’s counsel incurred in connection with the registration or qualification of
      the Securities for offering and sale by the Company under the securities or
      blue
      sky laws of such jurisdictions designated pursuant to Section 4(i), including
      the preparation and printing of preliminary, supplemental and final Blue Sky
      Memoranda, (iv) the fees and expenses of any transfer agent or registrar for
      the
      Securities, (v) fees, disbursements and other charges of counsel to the Company,
      (vi) if applicable, the filing fees of the NASD in connection with its review
      of
      the terms of the public offering and reasonable fees and disbursements of
      counsel for the Placement Agent in connection with such review (including all
      COBRADesk fees), (vii) listing fees, if any, for the quotation of the
      AR-CombiMatrix Common Stock on the Nasdaq Global Market, (viii) fees and
      disbursements of the Auditors incurred in delivering the letters) described
      in
      Section 6(g) of this Agreement, (ix) at the Closing, the fees and expenses
      of
      counsel for the Placement Agent in connection with the Offering, and (x) the
      reasonable costs and expenses of the Company and the Placement Agent incurred
      in
      connection with the marketing of the offering and the sale of the Securities
      to
      prospective investors including, but not limited to, those related to any
      presentations or meetings undertaken in connection therewith including, without
      limitation, (A) expenses associated with the production of road show slides
      and
      graphics, (B) fees and expenses of any consultants engaged with the consent
      of
      the Company in connection with the road show presentations, and (C) travel,
      lodging and other expenses incurred by the officers of the Company and any
      such
      consultants. Notwithstanding anything contained in the foregoing or elsewhere
      in
      this Agreement, the Company’s obligations to reimburse the Placement Agent for
      its actual out-of-pocket expenses, including reasonable legal fees and
      disbursements, shall not in the aggregate exceed $50,000.

     

    
      
        
        

      

      
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    6.    Conditions
      of Placement Agent’s Obligations.
      The
      respective obligations of the Placement Agent and the Investors and the closing
      of the sale of the Units are subject to the following conditions:

     

    (a)    No
      stop
      order suspending the effectiveness of the Registration Statement or the
      qualification or registration of the Securities under the securities or Blue
      Sky
      laws of any jurisdiction shall be in effect and no proceedings for that purpose
      shall have been initiated or threatened by any securities or other governmental
      authority (including, without limitation, the Commission), and any request
      for
      additional information on the part of the staff of any securities or other
      governmental authority (including, without limitation, the Commission) shall
      have been complied with to the satisfaction of the staff of the Commission
      or
      such other authorities and after the date hereof no amendment or supplement
      to
      the Registration Statement or the Prospectus shall have been filed unless a
      copy
      thereof was first submitted to the Placement Agent and the Placement Agent
      did
      not reasonably object thereto in good faith.

     

    (b)    Since
      the
      respective dates as of which information is given in the Registration Statement
      and the Prospectus, there shall not have been (i) any change in the capital
      stock or long-term debt of the Company or any of its Subsidiaries or any change,
      or any development involving a prospective change, whether or not arising from
      transactions in the ordinary course of business, in or affecting the business,
      general affairs, management, financial position, stockholders’ equity, results
      of operations or prospects of the Company and its Subsidiaries, taken as a
      whole, or (ii) any loss or interference with its business from fire, explosion,
      storm, flood, act of war, terrorist act or other calamity, whether or not
      covered by insurance, or from any labor dispute or court or governmental action,
      order or decree, otherwise than as set forth in or contemplated by the
      Registration Statement or the Prospectus, the effect of which, in any such
      case
      described in clauses (i) and (ii) above, is, in the judgment of the Placement
      Agent, so material and adverse as to make it impracticable or inadvisable to
      proceed with the sale or delivery of the Securities on the terms and in the
      manner contemplated by the Prospectus.

     

    (c)    The
      Placement Agent shall not have discovered and disclosed to the Company on or
      prior to the Closing Date that (i) the Registration Statement, or
      any
      amendment or supplement thereto contains an untrue statement of a fact which,
      in
      the opinion of the counsel to the Placement Agent, is material, or omits to
      state any fact which, in the opinion of the counsel to the Placement Agent,
      is
      material and is required to be stated therein or is necessary to make the
      statements therein not misleading, or (ii) the Prospectus, or any amendment
      or
      supplement thereto contains an untrue statement of a fact which, in the opinion
      of the counsel to the Placement Agent, is material, or omits to state any fact
      which, in the opinion of the counsel to the Placement Agent, is material and
      is
      required to be stated therein or is necessary to make the statements therein,
      in
      light of the circumstances under which they were made, not
      misleading.

     

    (d)    Each
      of
      the representations and warranties of the Company contained herein shall be
      true
      and correct at the Closing Date, as if made on such date, and all covenants
      and
      agreements herein contained to be performed on the part of the Company and
      all
      conditions herein contained to be fulfilled or complied with by the Company
      at
      or prior to the Closing Date shall have been duly performed, fulfilled or
      complied with.

     

    
      
        
        

      

      
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    (e)    The
      Placement Agent shall have received (i) from Greenberg Traurig, LLP, corporate
      counsel to the Company, such counsel’s written opinion, addressed to the
      Placement Agent and dated the Closing Date, in form and substance as is set
      forth on Exhibit
      F-1
      attached
      hereto, and (ii) from Michael D. Vrbanac, in-house counsel for the Company,
      such
      counsel’s written opinion addressed to the Placement Agent and dated the Closing
      Date, in form and substance as is set forth on Exhibit
      F-2
      attached
      hereto.

     

    (f)    The
      Placement Agent shall have received from Mintz, Levin, Cohn, Ferris, Glovsky
      and
      Popeo, P.C., such opinion or opinions, dated the Closing Date and addressed
      to
      the Placement Agent, covering such matters as are customarily covered in
      transactions of this type, and the Company shall have furnished to such counsel
      such documents as it requests for the purpose of enabling it to pass upon such
      matters.

     

    (g)    Concurrently
      with the execution and delivery of this Agreement, or, if the Company elects
      to
      rely on Rule 430A, on the date of the Prospectus Supplement, the Auditors shall
      have furnished to the Placement Agent a letter, dated the date of its delivery
      (the “Original Letter”),
      addressed to the Placement Agent and in form and substance reasonably
      satisfactory to the Placement Agent, containing statements and information
      of
      the type customarily included in accountants’ “comfort letters” to underwriters.
      At the Closing Date, the Auditors shall have furnished to the Placement Agent
      a
      letter, dated the date of its delivery, which shall confirm, on the basis of
      a
      review in accordance with the procedures set forth in the Original Letter,
      that
      nothing has come to their attention during the period from the date of the
      Original Letter referred to in the prior sentence to a date (specified in the
      letter) not more than three days prior to the Closing Date which would require
      any change in the Original Letter if it were required to be dated and delivered
      at the Closing Date .

     

    (h)    The
      Placement Agent shall have received on the Closing Date a certificate, addressed
      to the Placement Agent and dated the Closing Date, of the chief executive or
      chief operating officer and the chief financial officer or chief accounting
      officer of the Company to the effect that:

     

    (i)    the
      representations, warranties and agreements of the Company in this Agreement
      were
      true and correct when made and are time and correct as of the Closing Date;
      and
      the Company has complied with all agreements and satisfied all the conditions
      on
      its part required under this Agreement to be performed or satisfied at or prior
      to the Closing Date;

     

    (ii)   the
      Registration Statement is effective and, to their knowledge, as of the Closing
      Date, no stop order or other order suspending the effectiveness of the
      Registration Statement or any amendment thereof or the qualification of the
      Securities for offering or sale has been issued, and no proceeding for that
      purpose has been instituted or are pending before or are contemplated by the
      Commission or any state or regulatory body;

     

    (iii)         
      the
      signers of said certificate have carefully examined the Registration Statement
      and the Prospectus, and any amendments thereof or supplements thereto (and
      any
      documents filed under the Exchange Act and deemed to be incorporated by
      reference into the Prospectus), and (A) the Registration Statement, or any
      amendment thereof, does 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 the Prospectus, as amended
      or
      supplemented, does not include any untrue statement of material fact or omit
      to
      state a material fact necessary to make the statements therein, in light of
      the
      circumstances under which they were made, not misleading, and (B) no event
      has
      occurred as a result of which it is necessary to amend or supplement the
      Prospectus in order to make the statements therein not untrue or misleading
      in
      any material respect; and

     

    
      
        
        

      

      
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    (iv)         
      subsequent
      to the date of the most recent financial statements included or incorporated
      by
      reference in the Prospectus, there has been no change in the financial position
      or results of operation of the Company and its Subsidiaries that would
      reasonably be expected to result in a Material Adverse Effect, or any change,
      or
      any development including a prospective change, in or affecting the condition
      (financial or otherwise), results of operations, business or prospects of the
      Company and its Subsidiaries taken as a whole, except as set forth in the
      Prospectus.

     

    (i)    The
      Shares and the Warrant Shares shall be registered under the Exchange Act and
      shall have been approved for quotation on the Nasdaq Global Market and listed
      and admitted and authorized for trading on the Nasdaq Global Market, subject
      only to official notice of issuance. Satisfactory evidence of such actions
      shall
      have been provided to the Placement Agent.

     

    (j)    No
      action
      shall have been taken and no statute, rule, regulation or order shall have
      been
      enacted, adopted or issued by any governmental agency or body which would,
      as of
      the Closing Date, prevent the issuance or sale of the Securities; and no
      injunction, restraining order or order of any other nature by any federal or
      state court of competent jurisdiction shall have been issued as of the Closing
      Date which would prevent the issuance or sale of the Securities.

     

    (k)    The
      Prospectus Supplement shall have been filed with the Commission pursuant to
      Rule
      424(b) under the Securities Act before 5:30 P.M. New York City time on the
      business day after the date of this Agreement.

     

    (l)    The
      Company shall have prepared and filed with the Commission a Current Report
      on
      Form 8-K with respect to the transactions contemplated hereby, including as
      an
      exhibit thereto this Agreement and any other documents relating
      thereto.

     

    (m)    The
      Company shall have entered into Subscription Agreements with each of the
      Investors.

     

    (n)    Subsequent
      to the execution and delivery of this Agreement, there shall not have occurred
      any of the following: (i) trading in securities generally on the New York Stock
      Exchange, the Nasdaq Global Market or the American Stock Exchange or in the
      over-the-counter market, or trading in any securities of the Company on any
      exchange or in the over-the-counter market, shall have been suspended or minimum
      or maximum prices or maximum ranges for prices shall have been established
      on
      any such exchange or such market by the Commission, by such exchange or by
      any
      other regulatory body or governmental authority having jurisdiction, (ii) a
      banking moratorium shall have been declared by federal or state authorities
      or a
      material disruption has occurred in commercial banking or securities settlement
      or clearance services in the United States, (iii) the United States shall have
      become engaged in hostilities, or the subject of an act of terrorism, there
      shall have been an escalation in hostilities involving the United States or
      there shall have been a declaration of a national emergency or war by the United
      States or (iv) there shall have occurred any other calamity or crisis or any
      change in general economic, political or financial conditions in the United
      States or elsewhere, if the effect of any such event in clause (iii) or (iv)
      makes it, in the sole judgment of the Placement Agent, impracticable or
      inadvisable to proceed with the sale or delivery of the Units on the terms
      and
      in the manner contemplated by the Registration Statement and the
      Prospectus.

     

    
      
        
        

      

      
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    (o)    The
      NASD
      shall have raised no objection to the fairness and reasonableness of the
      placement agency terms and arrangements.

     

    (p)    The
      Placement Agent shall have received copies of the executed Lock-Up Agreements
      executed by each person listed on Exhibit
      E
      hereto,
      and such Lock-Up Agreements shall be in full force and effect on the Closing
      Date.

     

    (q)    Prior
      to
      the Closing Date, the Company shall have furnished to the Placement Agent such
      further information, certificates or documents as the Placement Agent shall
      have
      reasonably requested.

     

    All
      opinions, letters, evidence and certificates mentioned above or elsewhere in
      this Agreement shall be deemed to be in compliance with the provisions hereof
      only if they are in form and substance reasonably satisfactory to counsel for
      the Placement Agent. The Company will furnish you with such conformed copies
      of
      such opinions, certificates, letters and other documents as you shall reasonably
      request.

     

    7.    Indemnification
      and Contribution.

     

    (a)    Indemnification
      of the Placement Agent.
      The
      Company shall indemnify and hold harmless the Placement Agent, its directors,
      officers, managers, members, employees, and agents and each person, if any,
      who
      controls the Placement Agent within the meaning of the Securities Act
      (collectively the “Placement
      Agent Indemnified Parties”
and
      each a “Placement
      Agent Indemnified Party”)
      against any loss, claim, damage, expense or liability, joint or several, or
      any
      action, investigation or proceeding in respect thereof, to which the Placement
      Agent Indemnified Party may become subject, under the Securities Act or
      otherwise, insofar as such loss, claim, damage, expense, liability, action,
      investigation or proceeding arises out of or is based upon (i) any untrue
      statement or alleged untrue statement of a material fact contained in the Base
      Prospectus, the Registration Statement, any Preliminary Prospectus, any Issuer
      Free Writing Prospectus, any “issuer information” filed or required to be filed
      pursuant to Rule 433(d) of the Rules and Regulations or the Prospectus, or
      in
      any amendment or supplement thereto or document incorporated by reference
      therein, (ii) the omission or alleged omission to state in the Base Prospectus,
      the Registration Statement, any Preliminary Prospectus, any Issuer Free Writing
      Prospectus, any “issuer information” filed or required to be filed pursuant to
      Rule 433(d) of the Rules and Regulations or the Prospectus, or in any amendment
      or supplement thereto or document incorporated by reference therein, a material
      fact required to be stated therein or necessary to make the statements therein
      not misleading, (iii) any breach of the representations and warranties of the
      Company contained herein, or (iv) any act or failure to act, or any alleged
      act
      or failure to act, by the Placement Agent in connection with, or relating in
      any
      manner to, the Units or the Offering contemplated hereby, and which is included
      as part of or referred to in any loss, claim, damage, expense, liability,
      action, investigation or proceeding arising out of or based upon matters covered
      by clause (i), (ii) or (iii) above; (provided that the Company shall not be
      liable in the case of any matter covered by this clause (iv) to the extent
      that
      it is determined in a final judgment by a court of competent jurisdiction that
      such loss, claim, damage, expense, liability or action resulted directly from
      any such act or failure to act undertaken or omitted to be taken by the
      Placement Agent through its gross negligence or willful misconduct) and shall
      reimburse each Placement Agent Indemnified Party promptly upon demand for any
      legal or other expenses reasonably incurred by that Placement Agent Indemnified
      Party in connection with investigating or preparing to defend or defending
      against or appearing as a third party witness in respect of, or otherwise
      incurred in connection with any such loss, claim, damage, expense, liability,
      action, investigation or proceeding as such fees and expenses are incurred;
      provided, however, that the Company shall not be liable in any such case to
      the
      extent that any such loss, claim, damage, expense, liability, action,
      investigation or proceeding arises out of or is based upon an untrue statement
      or alleged untrue statement in or omission or alleged omission from the Base
      Prospectus, the Registration Statement, any Preliminary Prospectus, any Issuer
      Free Writing Prospectus, any “issuer information” filed or required to be filed
      pursuant to Rule 433(d) of the Rules and Regulations or the Prospectus, or
      in
      any amendment or supplement thereto made in reliance upon and in conformity
      with
      written information furnished to the Company by or on behalf of the Placement
      Agent through the Placement Agent specifically for use therein, which
      information the parties hereto agree is limited to the Placement Agent’s
      Information (as defined in Section 16 ). This indemnity agreement is not
      exclusive and will be in addition to any liability, which the Company might
      otherwise have and shall not limit any rights or remedies which may otherwise
      be
      available at law or in equity to each Placement Agent Indemnified
      Party.

     

    
      
        
        

      

      
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    (b)    Indemnification
      of the Company.
      The
      Placement Agent shall indemnify and hold harmless the Company its officers,
      employees, and agents, each of its directors and each person, if any, who
      controls the Company within the meaning of the Securities Act (collectively
      the
“Company
      Indemnified Parties”
and
      each a “Company
      Indemnified Party”)
      against any loss, claim, damage, expense or liability, joint or several, or
      any
      action, investigation or proceeding in respect thereof, to which the Company
      Indemnified Parties may become subject, under the Securities Act or otherwise,
      insofar as such loss, claim, damage, liability or action arises out of or is
      based upon (i) any untrue statement or alleged untrue statement of a material
      fact contained in the Base Prospectus, the Registration Statement, any
      Preliminary Prospectus, any Issuer Free Writing Prospectus, any “issuer
      information” filed or required to be filed pursuant to Rule 433(d) of the Rules
      and Regulations or the Prospectus, or in any amendment or supplement thereto,
      or
      (ii) the omission or alleged omission to state in the Base Prospectus, the
      Registration Statement, any Preliminary Prospectus, any Issuer Free Writing
      Prospectus, any “issuer information” filed or required to be filed pursuant to
      Rule 433(d) of the Rules and Regulations or the Prospectus, or in any amendment
      or supplement thereto, a material fact required to be stated therein or
      necessary to make the statements therein not misleading, but in each case only
      to the extent that the untrue statement or alleged untrue statement or omission
      or alleged omission was made in reliance upon and in conformity with written
      information furnished to the Company by or on behalf of the Placement Agent
      through the Placement Agent specifically for use therein, and shall reimburse
      the Company Indemnified Parties for any legal or other expenses reasonably
      incurred by such parties in connection with investigating or preparing to defend
      or defending against or appearing as third party witness in connection with
      any
      such loss, claim, damage, expense, liability or action, investigation or
      proceeding as such fees and expenses are incurred; provided that the parties
      hereto hereby agree that such written information provided by the Placement
      Agent consist solely of the Placement Agent’s Information. This indemnity
      agreement is not exclusive and will be in addition to any liability, which
      the
      Placement Agent and Investors might otherwise have and shall not limit any
      rights or remedies which may otherwise be available at law or in equity to
      the
      Company Indemnified Parties. Notwithstanding the provisions of this Section
      7(b)
      , in no event shall any indemnity by the Placement Agent under this Section
      7(b)
      exceed the total compensation received by the Placement Agent in accordance
      with
      Section 1(a).

     

    (c)    Notice
      and Procedures.
      Promptly after receipt by an indemnified party under this Section 7 of notice
      of
      any claim or the commencement of any action, the indemnified party shall, if
      a
      claim in respect thereof is to be made against the indemnifying party under
      this
      Section 7, notify the indemnifying party in writing of the claim or the
      commencement of that action; provided, however, that the failure to notify
      the
      indemnifying party shall not relieve it from any liability which it may have
      under this Section 7 except to the extent it has been materially prejudiced
      by
      such failure; and, provided, further, that the failure to notify the
      indemnifying party shall not relieve it from any liability which it may have
      to
      an indemnified party otherwise than under this Section 7. If any such claim
      or
      action shall be brought against an indemnified party, and it shall notify the
      indemnifying party thereof, the indemnifying party shall be entitled to
      participate therein and, to the extent that it wishes, jointly with any other
      similarly notified indemnifying party, to assume the defense thereof with
      counsel reasonably satisfactory to the indemnified party. After notice from
      the
      indemnifying party to the indemnified party of its election to assume the
      defense of such claim or action, the indemnifying party shall not be liable
      to
      the indemnified party under this Section 7 for any legal or other expenses
      subsequently incurred by the indemnified party in connection with the defense
      thereof other than reasonable costs of investigation; provided, however, that
      any indemnified party shall have the right to employ separate counsel in any
      such action and to participate in the defense thereof but the fees and expenses
      of such counsel shall be at the expense of such indemnified party unless (i)
      the
      employment thereof has been specifically authorized by the indemnifying party
      in
      writing, (ii) such indemnified party shall have been advised by such counsel
      that there may be one or more legal defenses available to it which are different
      from or additional to those available to the indemnifying party and in the
      reasonable judgment of such counsel it is advisable for such indemnified party
      to employ separate counsel or (iii) the indemnifying party has failed to assume
      the defense of such action in accordance with the terms hereof and employ
      counsel reasonably satisfactory to the indemnified party, in which case, if
      such
      indemnified party notifies the indemnifying party in writing that it elects
      to
      employ separate counsel at the expense of the indemnifying party, the
      indemnifying party shall not have the right to assume the defense of such action
      on behalf of such indemnified party, it being understood, however, that the
      indemnifying party shall not, in connection with any one such action or separate
      but substantially similar or related actions in the same jurisdiction arising
      out of the same general allegations or circumstances, be liable for the
      reasonable fees and expenses of more than one separate firm of attorneys at
      any
      time for all such indemnified parties, which firm shall be designated in writing
      by the Placement Agent, if the indemnified parties under this Section 7 consist
      of any Placement Agent Indemnified Party, or by the Company if the indemnified
      parties under this Section 7 consist of any Company Indemnified Parties. Each
      indemnified party, as a condition of the indemnity agreements contained in
      Sections 7(a) and 7(b) shall use all reasonable efforts to cooperate with the
      indemnifying party in the defense of any such action or claim. Subject to the
      provisions of Section 7(d) below, no indemnifying party shall be liable for
      any
      settlement, compromise or consent to the entry of judgment in connection with
      any such action effected without its written consent (which consent shall not
      be
      unreasonably withheld), but if settled with its written consent or if there
      be a
      final judgment for the plaintiff in any such action (other than a judgment
      entered with the consent of such indemnified party), the indemnifying party
      agrees to indemnify and hold harmless any indemnified party from and against
      any
      loss or liability by reason of such settlement or judgment.

     

    
      
        
        

      

      
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    (d)    Reimbursement
      for Fees and Expenses of Counsel.
      If at
      any time an indemnified party shall have requested that an indemnifying party
      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 by this Section 7 effected without its written consent
      if
      (i) such settlement is entered into more than 45 days after receipt by such
      indemnifying party of the request for reimbursement, (ii) such indemnifying
      party shall have received notice of the terms of such settlement at least 30
      days prior to such settlement being entered into and (iii) such indemnifying
      party shall not have reimbursed such indemnified party in accordance with such
      request prior to the date of such settlement.

     

    (e)    Contribution;
      Limitation on Liability.
      If the
      indemnification provided for in this Section 7 is unavailable or insufficient
      to
      hold harmless an indemnified party under Section 7(a) or 7(b), then each
      indemnifying party shall, in lieu of indemnifying such indemnified party,
      contribute to the amount paid or payable by such indemnified party as a result
      of such loss, claim, damage or liability, or action in respect thereof, (i)
      in
      such proportion as shall be appropriate to reflect the relative benefits
      received by the Company on the one hand and the Placement Agent on the other
      from the offering of the Units or (ii) if the allocation provided by clause
      (i)
      above 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 Company on the one hand and the Placement Agent
      on the other with respect to the statements or omissions which resulted in
      such
      loss, claim, damage or liability, or action in respect thereof, as well as
      any
      other relevant equitable considerations. The relative benefits received by
      the
      Company on the one hand and the Placement Agent on the other with respect to
      such offering shall be deemed to be in the same proportion as the total net
      proceeds from the offering of the Units purchased under this Agreement (before
      deducting expenses) received by the Company bears to the total compensation
      received by the Placement Agent with respect to the Units purchased under this
      Agreement. The relative fault shall be determined by reference to, among other
      things, whether the untrue or alleged untrue statement of a material fact or
      the
      omission or alleged omission to state a material fact relates to information
      supplied by the Company on the one hand or the Placement Agent on the other,
      the
      intent of the parties and their relative knowledge, access to information and
      opportunity to correct or prevent such untrue statement or omission; provided
      that the parties hereto agree that the written information furnished to the
      Company by the Placement Agent for use in the Prospectus, or in any amendment
      or
      supplement thereto, consists solely of the Placement Agent’s Information. The
      Company and the Placement Agent agree that it would not be just and equitable
      if
      contributions pursuant to this Section 7(e) were to be determined by pro rata
      allocation or by any other method of allocation which does not take into account
      the equitable considerations referred to herein. The amount paid or payable
      by
      an indemnified party as a result of the loss, claim, damage or liability, or
      action in respect thereof, referred to above in this Section 7(e) shall be
      deemed to include, for purposes of this Section 7(e), any legal or other
      expenses reasonably incurred by such indemnified party in connection with
      investigating or defending any such action or claim. Notwithstanding the
      provisions of this Section 7(e), the Placement Agent shall not be required
      to
      contribute any amount in excess of the total compensation received by the
      Placement Agent in accordance with Section 1(e) less the amount of any damages
      which the Placement Agent has otherwise paid or become liable to pay by reason
      of any untrue or alleged untrue statement or omission or alleged omission.
      No
      person guilty of fraudulent misrepresentation (within the meaning of Section
      11(f) of the Securities Act) shall be entitled to contribution from any person
      who was not guilty of such fraudulent misrepresentation.

     

    
      
        
        

      

      
        21

        
          

        

      

      
        
        

      

       

    

    8.    Representations
      and Agreements to Survive Delivery.
       All
      representations, warranties, and agreements of the Company herein or in
      certificates delivered pursuant hereto, and the agreements of the Placement
      Agent and the Company contained in Section 7 hereof, shall remain operative
      and
      in full force and effect regardless of any investigation made by or on behalf
      of
      the Placement Agent or any controlling person thereof, or the Company or any
      of
      its officers, directors, or controlling persons and shall survive delivery
      of,
      and payment for, the Units.

     

    9.    Termination.

     

    (a)    The
      obligations of the Placement Agent and the Investors hereunder and under the
      Subscription Agreements may be terminated by the Placement Agent, in its
      absolute discretion by notice given to the Company prior to delivery (including
      electronic delivery) of and payment for the Units if, prior to that time, any
      of
      the events described in Sections 6(b) and 6(n) have occurred or if the Investors
      shall decline to purchase the Units for any reason permitted under this
      Agreement or the Subscription Agreements.

     

    (b)    If
      the
      sale of the Units provided for herein is not consummated because any condition
      to the obligations of the Placement Agent set forth in Section 6 hereof is
      not
      satisfied, because of any termination pursuant to Section 9(a) hereof or because
      of any refusal, inability or failure on the part of the Company to perform
      any
      agreement herein or comply with any provision hereof other than by reason of
      a
      default by the Placement Agent, the Company will reimburse the Placement Agent
      upon demand for all out-of-pocket expenses (including fees and disbursements
      of
      counsel and any expenses advanced by the Placement Agent on the Company’s
      behalf) that shall have been incurred by the Placement Agent in connection
      with
      this Agreement and the proposed purchase and sale of the Units and, upon demand,
      the Company shall pay the full amount thereof to the Placement
      Agent.

     

    10.          
      Notices.
      All
      statements, requests, notices and agreements hereunder shall be in writing,
      and:

     

    (a)    if
      to the
      Placement Agent, shall be delivered or sent by mail, telex or facsimile
      transmission to Oppenheimer & Co. Inc., 125 Broad Street, New York, New York
      10004, Attention: Kee Colen (Fax: 212-425-2028), with a copy to Mintz, Levin,
      Cohn, Ferris, Glovsky and Popeo, P.C., 666 Third Avenue, New York, New York,
      10017, Attention: Ivan Blumenthal (Fax: 212-983-3115);

     

    (b)    if
      to the
      Company shall be delivered or sent by mail, telex or facsimile transmission
      to
      Acacia Research Corporation, 500 Newport Center Drive, 7th Floor, Newport Beach,
      California 92660 Attention: Chief Financial Officer (Fax: 949-480-8393), with
      a
      copy to: Greenberg Traurig, LLP, 650 Town Center Drive, Suite 1700, Costa Mesa,
      California 92626, Attention: Raymond A. Lee, Esq. (Fax:
      714-708-6501).

     

    
      
        
        

      

      
        22

        
          

        

      

      
        
        

      

       

    

    11.    Persons
      Entitled to Benefit of Agreement.
      This
      Agreement shall inure to the benefit of and shall be binding upon the Placement
      Agent, the Investors, the Company, and their respective successors and assigns
      and the controlling persons, officers and directors referred to in Section
      7.
      Nothing in this Agreement is intended or shall be construed to give to any
      other
      person, firm or corporation, other than the persons, firms or corporations
      mentioned in the preceding sentence, any legal or equitable remedy or claim
      under or in respect of this Agreement, or any provision herein contained. The
      term “successors and assigns” as herein used shall not include any purchaser by
      reason merely of such purchase.

     

    12.    Governing
      Law.
      This
      Agreement shall be governed by and construed in accordance with the laws of
      the
      State of New York, without giving effect to the conflicts of laws provisions
      thereof

     

    13.    Counterparts.
      This
      Agreement may be executed in one or
      more counterparts
      and, if executed in more than one counterpart, the executed counterparts shall
      each be deemed to be an original and all such counterparts shall together
      constitute one and the same instrument.

     

    14.    General
      Provisions.
      This
      Agreement constitutes the entire agreement of the parties to this Agreement
      and
      supersedes all prior written or oral and all contemporaneous oral agreements,
      understandings and negotiations with respect to the subject matter hereof.
      In
      this Agreement, the masculine, feminine and neuter genders and the singular
      and
      the plural include one another. The section headings in this Agreement are
      for
      the convenience of the parties only and will not affect the construction or
      interpretation of this Agreement. This Agreement may be amended or modified,
      and
      the observance of any term of this Agreement may be waived, only by a writing
      signed by the Company and the Placement Agent.

     

    15.    [Intentionally
      Omitted]

     

    16.    Placement
      Agent’s Information.
      The
      parties hereto acknowledge and agree that, for all purposes of this Agreement,
      the Placement Agent’s Information consists solely of the statements concerning
      the Placement Agent contained in the section under the heading “Plan of
      Distribution” in the Prospectus Supplement.

     

    17.    Absence
      of Fiduciary Relationship.
      The
      Company acknowledges and agrees that in connection with the
      Offering:

     

    
      
        
        

      

      
        23

        
          

        

      

      
        
        

      

       

    

    (a)    The
      Placement Agent’s responsibility to the Company is solely contractual in nature,
      the Placement Agent has been retained solely to act as placement agent in
      connection with the sale of the Units and no fiduciary, advisory or agency
      relationship between the Company and the Placement Agent has been created in
      respect of any of the transactions contemplated by this Agreement, irrespective
      of whether the Placements Agent has advised or is advising the Company on other
      matters; 

     

    (b)    The
      price
      of the Units set forth in this Agreement was established by the Company
      following discussions and arms-length negotiations with the Investors and the
      Placement Agent, and the Company is capable of evaluating and understanding,
      and
      understands and accepts, the terms, risks and conditions of the transactions
      contemplated by this Agreement; 

     

    (c)    The
      Company has been advised that the Placement Agent and its affiliates are engaged
      in a broad range of transactions which may involve interests that differ from
      those of the Company; and

     

    (d)    The
      Company waives, to the fullest extent permitted by law, any claims that the
      Company may have against the Placement Agent with respect to any breach of
      fiduciary duty in connection with the sale of the Units. 

     

    18.    Partial
      Unenforceability.
      The
      invalidity or unenforceability of any Section, paragraph or provision of this
      Agreement shall not affect the validity or enforceability of any other Section,
      paragraph or provision hereof. If any Section, paragraph or provision of this
      Agreement is for any reason determined to be invalid or unenforceable, there
      shall be deemed to be made such minor changes (and only such minor changes)
      as
      are necessary to make it valid and enforceable.

     

     

    [Signature
      Page Follows]

     

    
      
        
        

      

      
        24

        
          

        

      

      
        
        

      

    

    If
      the
      foregoing is in accordance with your understanding of the agreement between
      the
      Company and the Placement Agent, kindly indicate your acceptance in the space
      provided for that purpose below.

     

    
      	 	 	 
	 	
              Very
                truly yours,

               

              ACACIA
                RESEARCH CORPORATION

            
	 
 	 
 	 
	 	By:  	
              /s/
                Paul R.
                Ryan                                                                    
                

            
	 	Name: Paul
              R. Ryan
	 	Title: 
              CEO

    

     

    Accepted
      as of

    the
      date
      first above written:

     

    OPPENHEIMER
      & CO. INC.

     

    By:       /s/
      Kee
      Colen                                                            

    Name: 
      Kee Colen 

    Title:   
      Managing Director

     

    
      
        
        

      

      
        25

        
          

        

      

      
        
        

      

    

     

    Schedules
      and Exhibits

     

    Schedule
      I:         Subsidiaries
      of the Company

     

    Exhibit
      A:    Form
      of
      Subscription Agreement

     

    Exhibit
      B:    Form
      of
      Investor Warrant

     

    Exhibit
      C:    Form
      of
      Placement Agent’s Warrant

     

    Exhibit
      D:    Form
      of
      Lock-Up Agreement

     

    Exhibit
      E:    List
      of
      Directors and Executive Officers Executing Lock-Up Agreements

     

    Exhibit
      F:    Matters
      to be Covered in the Opinion of Counsel to the Company

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Schedule
      I

     

    Subsidiaries
      of the Company

     

    

      

      

      The
        following is a listing of the significant subsidiaries of Acacia Research
        Corporation: 

      

        
          	 	
                  Jurisdiction
                    of Incorporation

                
	
                  CombiMatrix
                    Corporation

                	
                  Delaware

                
	
                  Acacia
                    Global Acquisition Corporation

                	
                  Delaware

                
	
                  IP
                    Innovation LLC

                	
                  Texas
                    (as of 12/31/05, not as 9/30//06)

                
	
                  Computer
                    Docking Station Corporation

                	
                  Delaware
                    (not as of 12/31/05, as of 9/30/06)

                

        

         

      

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Exhibit
      A

     

    Form
      of
      Subscription Agreement

     

     

     

    Filed
      as Exhibit 10.2 to this Current Report on Form
      8-K.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Exhibit
      B

     

    Form
      of
      Investor Warrant

     

     

    Filed
      as Exhibit 10.3 to this Current Report on Form 8-K.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Exhibit
      C

     

    Form
      of
      Placement Agent’s Warrant

     

    
       

      ACACIA
        RESEARCH CORPORATION 

       

      WARRANT
        TO PURCHASE COMMON STOCK

       

      December
        13, 2006

       

      Void
        After December 13, 2011

       

      THIS
        CERTIFIES THAT,
        for
        value received, OPPENHEIMER
        & CO. INC.,
        or
        permitted registered assigns (the “Holder”),
        is
        entitled to subscribe for and purchase at the Exercise Price (defined below)
        from Acacia
        Research Corporation,
        a
        Delaware corporation (the
        “Company”),
        up to
488,416 shares
        of
        the Company’s Acacia Research-CombiMatrix common stock, par value $0.001 per
        share (the “Common
        Stock”).

       

      1. DEFINITIONS.
        As
        used
        herein, the following terms shall have the following respective
        meanings:

       

      (a) “Exercise
        Period” shall mean the period commencing on the date that is 181 days from the
        date hereof and ending five (5) years from the date hereof, unless sooner
        terminated as provided below.

       

      (b) “Exercise
        Price” shall mean $1.0875
        per
        share, subject to adjustment pursuant to Section 5 below.

       

      (c) “Exercise
        Shares” shall mean the shares of Common Stock issuable upon exercise of this
        Warrant.

       

      (d) “Trading
        Day” shall mean
        (a)
        any day on which the Common Stock is listed or quoted and traded on its primary
        Trading Market, (b) if the Common Stock is not then listed or quoted and
        traded
        on any Eligible Market, then a day on which trading occurs on the OTC
        Bulletin Board
        (or any
        successor thereto), or (c) if trading does not occur on the OTC Bulletin
        Board
        (or any successor thereto), any Business Day.

      

      2. EXERCISE
        OF WARRANT.  The
        rights represented by this Warrant may be exercised in whole or in part at
        any
        time during the Exercise Period, by delivery of the following to the Company
        at
        its address set forth on the signature page hereto (or at such other address
        as
        it may designate by notice in writing to the Holder):

       

      (a) An
        executed Notice of Exercise in the form attached hereto;

      

      (b) Payment
        of the Exercise Price either (i) in cash or by check, (ii) by cancellation
        of
        indebtedness, or (iii) pursuant to Section 2.1 below; and

      
        
          
          

        

        
          C-1

          
            

          

        

        
          
          

        

      

      (c) This
        Warrant.

       

      The
        Holder shall not be required to deliver the original Warrant in order to
        effect
        the exercise hereunder. Execution and delivery of the Notice of Exercise
        shall
        have the same effect as cancellation of the original Warrant and issuance
        of a
        new Warrant evidencing the right to purchase the remaining number of Exercise
        Shares.

      

      Certificates
        for shares purchased hereunder shall be transmitted by the transfer agent
        of the
        Company to the Holder by crediting the account of the Holder’s prime broker with
        the  Depository Trust Company through its Deposit Withdrawal Agent
        Commission system if the Company is a participant in such system, and otherwise
        by physical delivery to the address specified by the Holder in the Notice
        of
        Exercise within three business days from the delivery to the Company of the
        Notice of Exercise, surrender of this Warrant and payment of the aggregate
        Exercise Price as set forth above.  This Warrant shall be deemed to have
        been exercised on the date the Exercise Price is received by the Company. 
The Exercise Shares shall be deemed to have been issued, and Holder or any
        other
        person so designated to be named therein shall be deemed to have become a
        holder
        of record of such shares for all purposes, as of the date the Warrant has
        been
        exercised by payment to the Company of the Exercise Price.

       

      In
        addition to any other rights available to the Holder, if the Company fails
        to
        deliver to the Holder a certificate representing Exercise Shares by the third
        Trading Day after the date on which delivery of such certificate is required
        by
        this Warrant, and if after such third Trading Day the Holder purchases (in
        an
        open market transaction or otherwise) shares of Common Stock to deliver in
        satisfaction of a sale by the Holder of the Warrant Shares that the Holder
        anticipated receiving from the Company (a “Buy-In”),
        then
        in the Holder’s sole discretion, the Company shall within three Trading Days
        after the Holder’s request, either (i) pay cash to the Holder in an amount equal
        to the Holder’s total purchase price (including brokerage commissions, if any)
        for the shares of Common Stock so purchased less the Exercise Price (the
        “Buy-In
        Price”),
        at
        which point the Company’s obligation to deliver such certificate (and to issue
        such Common Stock) shall terminate, or (ii) promptly honor its obligation
        to
        deliver to the Holder a certificate or certificates representing such Common
        Stock and pay cash to the Holder in an amount equal to the excess (if any)
        of
        the Buy-In Price over the product of (A) such number of shares of Common
        Stock,
        times (B) the Closing Price on the date of the event giving rise to the
        Company’s obligation to deliver such certificate.

       

      The
        person in whose name any certificate or certificates for Exercise Shares
        are to
        be issued upon exercise of this Warrant shall be deemed to have become the
        holder of record of such shares on the date on which this Warrant was
        surrendered and payment of the Exercise Price was made, irrespective of the
        date
        of delivery of such certificate or certificates, except that, if the date
        of
        such surrender and payment is a date when the stock transfer books of the
        Company are closed, such person shall be deemed to have become the holder
        of
        such shares at the close of business on the next succeeding date on which
        the
        stock transfer books are open.

      
        
          
          

        

        
          C-2

          
            

          

        

        
          
          

        

      

      To
        the
        extent permitted by law, the Company’s obligations to issue and deliver Exercise
        Shares in accordance with the terms hereof are absolute and unconditional,
        irrespective of any action or inaction by the Holder to enforce the same,
        any
        waiver or consent with respect to any provision hereof, the recovery of any
        judgment against any person or entity or any action to enforce the same,
        or any
        setoff, counterclaim, recoupment, limitation or termination, or any breach
        or
        alleged breach by the Holder or any other person or entity of any obligation
        to
        the Company or any violation or alleged violation of law by the Holder or
        any
        other person or entity, and irrespective of any other circumstance which
        might
        otherwise limit such obligation of the Company to the Holder in connection
        with
        the issuance of Exercise Shares. Nothing herein shall limit a Holder’s right to
        pursue any other remedies available to it hereunder, at law or in equity
        including, without limitation, a decree of specific performance and/or
        injunctive relief with respect to the Company’s failure to timely deliver
        certificates representing shares of Common Stock upon exercise of the Warrant
        as
        required pursuant to the terms hereof. 

      

      This
        Warrant shall be non-callable.

      

      If
        immediately prior to the end of the Exercise Period, this Warrant has not
        been
        previously exercised, this Warrant shall automatically be exercised pursuant
        to
        Section 2.1 below.

      

      2.1. Net
        Exercise. 
If
        during the Exercise Period, the fair market value of one share of the Common
        Stock is greater than the Exercise Price (at the date of calculation as set
        forth below), in lieu of exercising this Warrant by payment of cash or by
        check,
        or by cancellation of indebtedness, the Holder may elect to receive shares
        equal
        to the value (as determined below) of this Warrant (or the portion thereof
        being
        canceled) by surrender of this Warrant at the principal office of the Company
        together with the properly endorsed Notice of Exercise in which event the
        Company shall issue to the Holder a number of shares of Common Stock computed
        using the following formula:

       

      X
        =    Y
        (A-B)     

      A

       

      Where
        X =
        the number of shares of Common Stock to be issued to the Holder

      

      
        	
                Y
                  =
                  

              	
                the
                  number of shares of Common Stock purchasable under the Warrant
                  or, if only
                  a portion of the Warrant is being exercised, the portion of the
                  Warrant
                  being canceled (at the date of such calculation)

              
	
                  

              	 
	
                A
                  =
                  

              	
                the
                  fair market value of one share of the Company’s Common Stock (at the date
                  of such calculation)

              
	
                 

              	 
	
                 B
                  = 

              	
                Exercise
                  Price (as adjusted to the date of such
                  calculation)

              

      

       

      
        
          
          

        

        
          C-3

          
            

          

        

        
          
          

        

      

      For
        purposes of the above calculation, the “fair market value” of one share of
        Common Stock shall mean (i) the average of the closing sales prices for the
        shares of Common Stock on the Nasdaq Global Market or other trading market
        where
        such security is listed or traded as reported by Bloomberg Financial Markets
        (or
        a comparable reporting service of national reputation selected by the Company
        and reasonably acceptable to the Holder if Bloomberg Financial Markets is
        not
        then reporting sales prices of such security) (collectively, “Bloomberg”) for
        the trading day immediately preceding such date, or (ii) if the Nasdaq Global
        Market is not the principal trading market for the shares of Common Stock,
        the
        average of the reported sales prices reported by Bloomberg on the principal
        trading market for the Common Stock during the same period, or, if there
        is no
        sales price for such period, the last sales price reported by Bloomberg for
        such
        period, or (iii) if neither of the foregoing applies, the last sales price
        of
        such security in the over-the-counter market on the pink sheets or bulletin
        board for such security as reported by Bloomberg, or if no sales price is
        so
        reported for such security, the last bid price of such security as reported
        by
        Bloomberg or (iv) if fair market value cannot be calculated as of such date
        on
        any of the foregoing bases, the fair market value shall be as determined
        by the
        Board of Directors of the Company in the exercise of its good faith
        judgment. 

       

      2.2. Issuance
        of New Warrants. 
        Upon any partial exercise of this Warrant, the Company, at its expense, will
        forthwith and, in any event within five business days, issue and deliver
        to the
        Holder a new warrant or warrants of like tenor, registered in the name of
        the
        Holder, exercisable, in the aggregate, for the balance of the number of shares
        of Common Stock remaining available for purchase under the Warrant.

       

      2.3. Payment
        of Taxes and Expenses. 
        The Company shall pay any recording, filing, stamp or similar tax which may
        be
        payable in respect of any transfer involved in the issuance of, and the
        preparation and delivery of certificates (if applicable) representing, (i)
        any
        Exercise Shares purchased upon exercise of this Warrant and/or (ii) new or
        replacement warrants in the Holder’s name or the name of any transferee of all
        or any portion of this Warrant.

      

      3. COVENANTS
        OF THE COMPANY.

       

      3.1. Covenants
        as to Exercise Shares. 
        The Company covenants and agrees that all Exercise Shares that may be issued
        upon the exercise of the rights represented by this Warrant will, upon issuance
        in accordance with the terms hereof, be validly issued and outstanding, fully
        paid and nonassessable, and free from all taxes, liens and charges with respect
        to the issuance thereof.  The Company further covenants and agrees that the
        Company will at all times during the Exercise Period, have authorized and
        reserved, free from preemptive rights, a sufficient number of shares of Common
        Stock to provide for the exercise of the rights represented by this
        Warrant.  If at any time during the Exercise Period the number of
        authorized but unissued shares of Common Stock shall not be sufficient to
        permit
        exercise of this Warrant, the Company will take such corporate action as
        may, in
        the opinion of its counsel, be necessary to increase its authorized but unissued
        shares of Common Stock to such number of shares as shall be sufficient for
        such
        purposes.

      
        
          
          

        

        
          C-4

          
            

          

        

        
          
          

        

      

      3.2. No
        Impairment. 
        Except and to the extent as waived or consented to by the Holder, the Company
        will not, by amendment of its Certificate of Incorporation or through any
        reorganization, transfer of assets, consolidation, merger, dissolution, issue
        or
        sale of securities or any other voluntary action, avoid or seek to avoid
        the
        observance or performance of any of the terms to be observed or performed
        hereunder by the Company, but will at all times in good faith assist in the
        carrying out of all the provisions of this Warrant and in the taking of all
        such
        action as may be necessary or appropriate in order to protect the exercise
        rights of the Holder against impairment.

       

      3.3. Notices
        of Record Date and Certain Other Events. 
In
        the event of any taking by the Company of a record of the holders of any
        class
        of securities for the purpose of determining the holders thereof who are
        entitled to receive any dividend (other than a cash dividend which is the
        same
        as cash dividends paid in previous quarters) or other distribution, the Company
        shall mail to the Holder, at least 20 days prior to the date on which any
        such
        record is to be taken for the purpose of such dividend or distribution, a
        notice
        specifying such date.  In the event of any voluntary dissolution,
        liquidation or winding up of the Company, the Company shall mail to the Holder,
        at least 20 days prior to the date of the occurrence of any such event, a
        notice
        specifying such date. In the event the Company authorizes or approves, enters
        into any agreement contemplating, or solicits stockholder approval for any
        Fundamental Transaction, as defined in Section 7 herein, the Company shall
        mail
        to the Holder, at least twenty days prior to the date of the occurrence of
        such
        event, a notice specifying such date.

       

      4. [INTENTIONALLY
        OMITTED]

       

      5. ADJUSTMENT
        OF EXERCISE PRICE AND SHARES.

       

      (a) In
        the
        event of changes in the outstanding Common Stock of the Company by reason
        of
        stock dividends, split-ups, recapitalizations, reclassifications, combinations
        or exchanges of shares, separations, reorganizations, liquidations,
        consolidation, acquisition of the Company (whether through merger or acquisition
        of substantially all the assets or stock of the Company), or the like, the
        number, class and type of shares available under the Warrant in the aggregate
        and the Exercise Price shall be correspondingly adjusted to give the Holder
        of
        the Warrant, on exercise for the same aggregate Exercise Price, the total
        number, class, and type of shares or other property as the Holder would have
        owned had the Warrant been exercised prior to the event and had the Holder
        continued to hold such shares until the event requiring adjustment.  The
        form of this Warrant need not be changed because of any adjustment in the
        number
        of Exercise Shares subject to this Warrant.

       

      (b) If
        at any
        time or from time to time the holders of Common Stock of the Company (or
        any
        shares of stock or other securities at the time receivable upon the exercise
        of
        this Warrant) shall have received or become entitled to receive, without
        payment
        therefor,  

      
        
          
          

        

        
          C-5

          
            

          

        

        
          
          

        

      

      (i) Common
        Stock or any shares of stock or other securities which are at any time directly
        or indirectly convertible into or exchangeable for Common Stock, or any rights
        or options to subscribe for, purchase or otherwise acquire any of the foregoing
        by way of dividend or other distribution (other than a dividend or distribution
        covered in Section 5(a) above),

       

      (ii) any
        cash
        paid or payable otherwise than as a cash dividend or

       

      (iii) Common
        Stock or additional stock or other securities or property (including cash)
        by
        way of spinoff, split-up, reclassification, combination of shares or similar
        corporate rearrangement (other than shares of Common Stock pursuant to
        Section 5(a) above), then and in each such case, the Holder hereof will,
        upon the exercise of this Warrant, be entitled to receive, in addition to
        the
        number of shares of Common Stock receivable thereupon, and without payment
        of
        any additional consideration therefor, the amount of stock and other securities
        and property (including cash in the cases referred to in clauses (ii) and
        (iii)
        above) which such Holder would hold on the date of such exercise had such
        Holder
        been the holder of record of such Common Stock as of the date on which holders
        of Common Stock received or became entitled to receive such shares or all
        other
        additional stock and other securities and property.

      

      (c) Upon
        the
        occurrence of each adjustment pursuant to this Section 5, the Company at
        its
        expense will, at the written request of the Holder, promptly compute such
        adjustment in accordance with the terms of this Warrant and prepare a
        certificate setting forth such adjustment, including a statement of the adjusted
        Exercise Price and adjusted number or type of Exercise Shares or other
        securities issuable upon exercise of this Warrant (as applicable), describing
        the transactions giving rise to such adjustments and showing in detail the
        facts
        upon which such adjustment is based. Upon written request, the Company will
        promptly deliver a copy of each such certificate to the Holder and to the
        Company’s transfer agent.

      

      6. FRACTIONAL
        SHARES.  No
        fractional shares shall be issued upon the exercise of this Warrant as a
        consequence of any adjustment pursuant hereto.  All Exercise Shares
        (including fractions) issuable upon exercise of this Warrant may be aggregated
        for purposes of determining whether the exercise would result in the issuance
        of
        any fractional share.  If, after aggregation, the exercise would result in
        the issuance of a fractional share, the Company shall, in lieu of issuance
        of
        any fractional share, pay the Holder otherwise entitled to such fraction
        a sum
        in cash equal to the product resulting from multiplying the then current
        fair
        market value of an Exercise Share by such fraction.

      
        
          
          

        

        
          C-6

          
            

          

        

        
          
          

        

      

      7. FUNDAMENTAL
        TRANSACTIONS. 
        If, at any time while this Warrant is outstanding, (i) the Company effects
        any
        merger of the Company with or into another entity, (ii) the Company effects
        any
        sale of all or substantially all of its assets in one or a series of related
        transactions, (iii) any tender offer or exchange offer (whether by the Company
        or another individual or entity) is completed pursuant to which holders of
        Common Stock are permitted to tender or exchange their shares for other
        securities, cash or property or (iv) the Company effects any reclassification
        of
        the Common Stock or any compulsory share exchange pursuant to which the Common
        Stock is effectively converted into or exchanged for other securities, cash
        or
        property (other than as a result of a subdivision or combination of shares
        of
        Common Stock covered by Section 5 above) (in any such case, a “Fundamental
        Transaction”),
        then,
        upon any subsequent exercise of this Warrant, the Holder shall have the right
        to
        receive, for each Warrant Share that would have been issuable upon such exercise
        immediately prior to the occurrence of such Fundamental Transaction, at the
        option of the Holder, (a) upon exercise of this Warrant, the number of shares
        of
        Common Stock of the successor or acquiring corporation or of the Company,
        if it
        is the surviving corporation, and any additional consideration (the
“Alternate
        Consideration”)
        receivable upon or as a result of such reorganization, reclassification,
        merger,
        consolidation or disposition of assets by a Holder of the number of shares
        of
        Common Stock for which this Warrant is exercisable immediately prior to such
        event.  
        For
        purposes of any such exercise, the determination of the Exercise Price shall
        be
        appropriately adjusted to apply to such Alternate Consideration based on
        the
        amount of Alternate Consideration issuable in respect of one share of Common
        Stock in such Fundamental Transaction, and the Company shall apportion the
        Exercise Price among the Alternate Consideration in a reasonable manner
        reflecting the relative value of any different components of the Alternate
        Consideration.  If holders of Common Stock are given any choice as to the
        securities, cash or property to be received in a Fundamental Transaction,
        then
        the Holder shall be given the same choice as to the Alternate Consideration
        it
        receives upon any exercise of this Warrant following such Fundamental
        Transaction.  To the extent necessary to effectuate the foregoing
        provisions, any successor to the Company or surviving entity in such Fundamental
        Transaction shall issue to the Holder a new warrant consistent with the
        foregoing provisions and evidencing the Holder’s right to exercise such warrant
        into Alternate Consideration. The terms of any agreement pursuant to which
        a
        Fundamental Transaction is effected shall include terms requiring any such
        successor or surviving entity to comply with the provisions of this Section
        7
        and insuring that this Warrant (or any such replacement security) will be
        similarly adjusted upon any subsequent transaction analogous to a Fundamental
        Transaction.

       

      8. NO
        STOCKHOLDER RIGHTS.  This
        Warrant in and of itself shall not entitle the Holder to any voting rights
        or
        other rights as a stockholder of the Company.

       

      9. TRANSFER
        OF WARRANT.  Subject
        to applicable laws, this Warrant and all rights hereunder are transferable,
        by
        the Holder in person or by duly authorized attorney, upon delivery of this
        Warrant and the form of assignment attached hereto to any transferee designated
        by Holder.

      
        
          
          

        

        
          C-7

          
            

          

        

        
          
          

        

      

      10. LOST,
        STOLEN, MUTILATED OR DESTROYED WARRANT.  If
        this
        Warrant is lost, stolen, mutilated or destroyed, the Company may, on such
        terms
        as to indemnity or otherwise as it may reasonably impose (which shall, in
        the
        case of a mutilated Warrant, include the surrender thereof), issue a new
        Warrant
        of like denomination and tenor as the Warrant so lost, stolen, mutilated
        or
        destroyed.  Any such new Warrant shall constitute an original contractual
        obligation of the Company, whether or not the allegedly lost, stolen, mutilated
        or destroyed Warrant shall be at any time enforceable by anyone.

       

      11. NOTICES,
        ETC.  All
        notices required or permitted hereunder shall be in writing and shall be
        deemed
        effectively given: (a) upon personal delivery to the party to be notified,
        (b) when sent by confirmed telex or facsimile if sent during normal
        business hours of the recipient, if not, then on the next business day,
        (c) five days after having been sent by registered or certified mail,
        return receipt requested, postage prepaid, or (d) one day after deposit
        with a nationally recognized overnight courier, specifying next day delivery,
        with written verification of receipt.  All communications shall be sent to
        the Company at the address listed on the signature page hereto and to Holder
        at
        the applicable address set forth on the applicable signature page to the
        Subscription Agreement or at such other address as the Company or Holder
        may
        designate by 10 days advance written notice to the other parties
        hereto.

        

      12. ACCEPTANCE. 
        Receipt
        of this Warrant by the Holder shall constitute acceptance of and agreement
        to
        all of the terms and conditions contained herein.

       

      13. GOVERNING
        LAW.  This
        Warrant and all rights, obligations and liabilities hereunder shall be governed
        by the laws of the State of New York.

       

      [REMAINDER
        OF PAGE INTENTIONALLY LEFT BLANK]

      
        
          
          

        

        
          C-8

          
            

          

        

        
          
          

        

      

      IN
        WITNESS WHEREOF,
        the
        Company has caused this Warrant to be executed by its duly authorized officer
        as
        of December 13, 2006.

      
        
          	 	 	 
	 	
                  ACACIA
                    RESEARCH CORPORATION

                
	 
 	 
 	 
	 	By:  	
                                                                                                                
                    

                
	 	Name: 
	 	Title: 
                  

        

         

      

      
        
          
          

        

        
          C-9

          
            

          

        

        
          
          

        

      

      NOTICE
        OF EXERCISE

       

      TO: 
        ACACIA
        RESEARCH CORPORATION 

       

      (1)  
        o  The
        undersigned hereby elects to purchase _________ shares of the Acacia
        Research-CombiMatrix Common Stock (the “Common
        Stock”)
        of
ACACIA
        RESEARCH CORPORATION  (the
        “Company”)
        pursuant to the terms of the attached Warrant, and tenders herewith payment
        of
        the exercise price in full, together with all applicable transfer taxes,
        if
        any.

       

       
        o     The
        undersigned hereby elects to purchase _________ shares of Common Stock of
        the
        Company pursuant to the terms of the net exercise provisions set forth in
        Section 2.1 of the attached Warrant, and shall tender payment of all
        applicable transfer taxes, if any.

       

      (2) 
        Please
        issue a certificate or certificates representing said shares of Common Stock
        of
        the Company in the name of the undersigned or in such other name as is specified
        below:

       

       

      (Name)

       

       

       

      (Address)

       

      

      

      

                                         _____________________________

       (Date)                               (Signature)

      

      

                                          _____________________________

                                          (Print
        name)

       

       

      
        
          
          

        

        
          C-10

          
            

          

        

        
          
          

        

      

      ASSIGNMENT
        FORM

       

      (To
        assign the foregoing Warrant, execute this form and supply required
        information.  Do not use this form to purchase shares.)

       

      FOR
        VALUE RECEIVED,
        the
        foregoing Warrant and all rights evidenced thereby are hereby assigned
        to

       

      

        
          	
                  Name:

                	_______________________________________________
	 	
                  (Please
                    Print)

                
	
                   

                	 
	
                  Address:

                	_______________________________________________ 
	 	
                  (Please
                    Print)

                

        

      

       

      Dated:
        ,
        20___

       

       

        

      Holder’s
        Signature:

       

      Holder’s
        Address:

       

       

      

       

      

      

      

       

       

      NOTE: 
        The signature to this Assignment Form must correspond with the name as it
        appears on the face of the Warrant, without alteration or enlargement or
        any
        change whatever.  Officers of corporations and those acting in a fiduciary
        or other representative capacity should file proper evidence of authority
        to
        assign the foregoing Warrant.

       

    

    
      
        
        

      

      
        C-11

        
          

        

      

      
        
        

      

    

    Exhibit
      D

     

    Form
      of
      Lock-Up Agreement

     

    

      December
        ___, 2006

      

      

      Oppenheimer
        & Co., Inc.

      125
        Broad
        Street

      New
        York,
        NY 10004

      

      

      Re:
        Acacia Research Corporation (the “Company”)

      

      Ladies
        and Gentlemen:

      

      The
        undersigned is an owner of record or beneficially of certain shares of Acacia
        Research - CombiMatrix common stock, par value $0.001 per share (the
“Common
        Stock”),
        of
        the Company or securities convertible into or exchangeable or exercisable
        for
        Common Stock.

      

      The
        undersigned is aware that the Company proposes to carry out a registered
        direct
        offering of Common Stock and warrants (the “Warrants”)
        to
        purchase Common Stock (the “Offering”)
        for
        which you will act as placement agent. The undersigned recognizes that the
        Offering will be of benefit to the undersigned and will benefit the Company
        by,
        among other things, raising additional capital for its operations. The
        undersigned acknowledges that you are relying on the representations and
        agreements of the undersigned contained in this letter in carrying out the
        Offering. 

      

        In
        consideration of the foregoing, the undersigned hereby agrees that the
        undersigned will not (and will cause any spouse or minor child or immediate
        family member of the spouse or the undersigned living in the undersigned’s
        household not to), without your prior written consent (which consent may
        be
        withheld in their sole discretion), directly or indirectly, sell, offer,
        contract or grant any option to sell (including without limitation any short
        sale), pledge, transfer, or otherwise dispose of any shares of Common Stock,
        options or warrants to acquire shares of Common Stock, or securities
        exchangeable or exercisable for or convertible into shares of Common Stock
        currently or hereafter owned either of record or beneficially (as defined
        in
        Rule 13d-3 under the Securities Exchange Act of 1934, as amended) by the
        undersigned (or such spouse or minor child or family member), or publicly
        announce an intention to do any of the foregoing, for a period commencing
        on the
        date hereof and continuing through the ninety (90) days following the closing
        of
        the Offering (the “Lock-Up
        Period”).

      

      If
        (i)
        the Company issues an earnings release or material news, or a material event
        relating to the Company occurs, during the last 17 days of the Lock-Up
        Period,
        or (ii)
        prior to the expiration of the Lock-Up
        Period,
        the
        Company announces that it will release earnings results during the 16-day
        period
        beginning on the last day of the Lock-Up
        Period,
        the
        restrictions imposed by this agreement shall continue to apply until the
        expiration of the 18-day period beginning on the issuance of the earnings
        release or the occurrence of the material news or material event.

       

      
        
          
          

        

        
          D-1

          
            

          

        

        
          
          

        

      

      The
        undersigned also agrees and consents to the entry of stop transfer instructions
        with the Company’s transfer agent and registrar against the transfer of shares
        of Common Stock or securities convertible into or exchangeable or exercisable
        for Common Stock held by the undersigned except in compliance with the foregoing
        restrictions. 

      

      This
        agreement is irrevocable and will be binding on the undersigned and the
        respective successors, heirs, personal representatives, and assigns of the
        undersigned. 

      

      
        	
                  

                ____________________________________________________

                Printed
                  Name of Holder

              
	
                 

                By: 

              	
                 

                _______________________________________  

                 

              	
                 

                 

              
	
                 

                    

                ____________________________________________________

                Printed
                  Name of Person Signing

              	
                 

                 

              	
                 

                 

              
	
                (indicate
                  capacity of person signing if signing as 

                custodian,
                  trustee, or on behalf of an entity)

              	
                 

              	
                 

              

      

       

    

    
      
        
        

      

      
        D-2

        
          

        

      

      
        
        

      

    

    Exhibit
      E

     

    List
      of
      Directors and Executive Officers Executing Lock-Up Agreements

     

     

    

      Rigdon
        Currie

      Fred
        deBoon

      Thomas
        B.
        Akin

      Edward
        Frykman

      Paul
        R.
        Ryan

      Robert
        L.
        Harris, II

      G.
        Louis
        Graziadio

      Amit
        Kumar, Ph.D.

      Brooke
        Anderson

      Scott
        Burell

      Hisashi
        Fuji

      Andrew
        McShea

      Michael
        Tognotti

    

     

    
      
        
        

      

      
        E-1

        
          

        

      

      
        
        

      

    

    Exhibit
      F

     

    Matters
      to be Covered in the Opinion of Counsel to the Company

     

    

      1. The
        Company and each of its Subsidiaries is a company, validly existing and in
        good
        standing under the laws of the state of its respective incorporation or
        formation. The Company has the corporate power and authority necessary to
        own or
        hold its properties, to conduct its business as described in the Registration
        Statement and the Prospectus and to enter into and perform its obligations
        under
        the Placement Agency Agreement, the Warrants, the Placement Agent’s Warrants,
        and the Subscription Agreements.

       

      2. The
        Company has an authorized capitalization as set forth in the Registration
        Statement and the Prospectus and all of the outstanding shares of AR-CombiMatrix
        Common Stock of the Company as of immediately prior to the Closing are duly
        authorized, validly issued and fully paid and nonassessable; and to our
        knowledge, none of the outstanding shares of capital stock of the Company
        was
        issued in violation of any statutory, contractual preemptive or other similar
        rights of any securityholder of the Company.

       

      3. The
        Shares have been duly and validly authorized and, when issued and delivered
        to
        the Investors and paid for in accordance with the terms of the Placement
        Agency
        Agreement and the Subscription Agreements, will be validly issued, fully
        paid
        and nonassessable. The Warrant Shares to be issued from time to time upon
        the
        exercise of the Warrants and the Placement Agent’s Warrants, as applicable, have
        been duly and validly authorized and, upon payment of the exercise price
        in
        accordance with the terms of the Warrants and the Placement Agent’s Warrants, as
        the case may be, will be validly issued, fully paid and
        nonassessable.

       

      4. The
        issuance of the Shares and the Warrant Shares is not subject to any statutory
        preemptive right or, to our knowledge, other similar rights of any
        securityholder of the Company.

       

      5. Each
        of
        the Placement Agency Agreement, the Warrants, the Placement Agent’s Warrants,
        and the Subscription Agreements has been duly and validly authorized, executed
        and delivered by the Company and constitutes the legal, valid and binding
        obligation of the Company, enforceable against the Company in accordance
        with
        its terms.

       

      6. The
        execution of the Placement Agency Agreement, the Warrants, the Placement
        Agent’s
        Warrants, and the Subscription Agreements by the Company, and the consummation
        by the Company of the transactions contemplated thereunder to be consummated
        on
        the Closing Date, will not (a) result in any violation of or conflict with
        any
        provision of the Company's Certificate of Incorporation or Bylaws, (b) violate
        or conflict with the General Corporations Law of the State of Delaware or
        any
        statute of the United States or the State of California or any order, rule
        or
        regulation of any governmental agency or body of the United States or the
        State
        of California that in our experience is normally applicable to the transactions
        of the type contemplated by the Placement Agency Agreement or the Subscription
        Agreements.

       

      7. The
        Company is not in violation of any provision of its Certificate of Incorporation
        or its Bylaws and, to our knowledge, the Company is not in material default
        in
        the performance of any obligation, agreement, covenant or condition contained
        in
        any document filed as exhibit to the Registration Statement or incorporated
        by
        reference therein.

       

      
        
          
          

        

        
          F-1

          
            

          

        

        
          
          

        

      

      8. No
        consent, approval, authorization or order of, or qualification with, any
        governmental body or agency is required for the performance by the Company
        of
        its obligations under the Placement Agency Agreement, the Warrants, the
        Placement Agent’s Warrants, or the Subscription Agreements, except: (i) such as
        have been obtained under the Securities Act and (ii) such as may be required
        by
        the securities or Blue Sky laws of the various states in connection with
        the
        offer and sale of the Securities by the Company, as to which we express no
        opinion.

       

      9. To
        our
        knowledge, there is not pending or threatened any action, suit, proceeding,
        inquiry or investigation, to which the Company or any of its subsidiaries
        are
        parties, or to which the property of the Company or its subsidiaries are
        subject, before or brought by any court or governmental authority, arbitration
        board or tribunal, domestic or foreign, that is required to be described
        in the
        Prospectus and is not so described therein.

       

      10. The
        Registration Statement is effective under the Securities Act, and, to our
        knowledge, no stop order suspending the effectiveness of the Registration
        Statement or any post-effective amendment thereof has been issued and no
        proceedings therefore have been initiated or threatened by the Commission
        and
        all filings required by Rule 424(b) and Rule 430(A) promulgated under the
        Securities Act have been made.

       

      11. To
        our
        knowledge, no person or entity has the right to require the registration
        of
        shares of AR-CombiMatrix Common Stock or other equity securities of the Company
        (including securities that are convertible into or exchangeable for the
        Company's equity securities) because of the filing or effectiveness of the
        Registration Statement or the completion of the Offering.

       

      12. To
        our
        knowledge, the Company is not a party to any contract or agreement of a
        character required to be filed as an exhibit to the Registration Statement
        that
        has not been so filed.

       

      13. The
        Registration Statement (including the Base Prospectus), as of its effective
        date, and the Prospectus, as of its date, complied as to form in all material
        respects with the requirements of the Securities Act, and the documents
        incorporated by reference in the Registration Statement, the Base Prospectus
        or
        the Prospectus, including any Current Report on Form 8-K filed with the
        Commission prior to the Closing Date, when they became effective or were
        filed
        with the Commission, as applicable, complied as to form in all material respects
        with the requirements of the Securities Act.

       

      14. The
        Company is not, and will not be after giving effect to the offering of the
        Shares and Warrants and the application of the proceeds thereof as described
        in
        the Base Prospectus and the Prospectus, an “investment company” as defined in
        the Investment Company Act of 1940, as amended.

       

       

      F-2Unassociated Document

    EXHIBIT
      10.2

     

     

    SUBSCRIPTION
      AGREEMENT

     

     

    Acacia
      Research Corporation 

    500
      Newport Center Drive, 7th
      Floor,

    Newport
      Beach, California 92660

    

    

    The
      undersigned (the “Investor”)
      hereby
      confirms its agreement with you as follows: 

     

    1. This
      Subscription Agreement (this “Agreement”)
      is
      made as of the date set forth below between Acacia Research Corporation, a
      Delaware corporation (the “Company”),
      and
      the Investor.

     

    2. The
      Company has authorized the sale and issuance to certain investors of up to
      _________ units (the “Units”),
      each
      consisting of (i) one share (the “Share”
and
      collectively the “Shares”)
      of its
      Acacia Research-CombiMatrix Common Stock, par value $0.001 per share (the
“Common
      Stock”)
      and
      (ii) one warrant (the “Warrant”
and
      collectively the “Warrants”)
      to
      purchase 1.2 Shares of Common Stock (and the fractional amount being the
“Warrant
      Ratio”),
      in
      substantially the form attached hereto as Exhibit
      A,
      subject
      to adjustment by the Company’s Board of Directors, or a committee thereof, for a
      purchase price of $1.02 per Unit (the “Purchase
      Price”).
      The
      shares issuable upon the exercise of the Warrants are referred to herein as
      the
“Warrant
      Shares”
and,
      together with the Units, the Shares and the Warrants, are referred to herein
      as
      the “Securities.”

     

    3. The
      offering and sale of the Securities (the “Offering”)
      is
      being made pursuant to an effective Registration Statement on Form S-3
      (including the Prospectus contained therein (the “Base
      Prospectus”)
      and
      the exhibits thereto and the documents incorporated therein by reference, the
      “Registration
      Statement”)
      filed
      by the Company with the Securities and Exchange Commission (the “Commission”),
      if
      applicable, certain preliminary prospectuses that have or will be filed with
      the
      Commission and delivered to the Investor on or prior to the date hereof (the
      “Time
      of Sale Prospectus”),
      and a
      Prospectus Supplement (the “Prospectus
      Supplement”)
      containing certain supplemental information regarding the Securities and terms
      of the Offering that will be filed with the Commission and delivered, or
      otherwise made available, to the Investor along with the Company’s counterpart
      to this Agreement. 

     

    4. The
      Company and the Investor agree that the Investor will purchase from the Company
      and the Company will issue and sell to the Investor the Units as set forth
      below
      for the aggregate purchase price set forth below. The Units shall be purchased
      pursuant to the Terms and Conditions for Purchase of Units attached hereto
      as
Annex
      I
      and
      incorporated herein by this reference as if fully set forth herein.

     

    5. The
      manner of settlement of the Shares included in the Units purchased by the
      Investor shall be determined by such Investor as follows (check
      one):

     

    
      	
              [____]

            	
              A.

            	
              Delivery
                by electronic book-entry at The Depository Trust Company (“DTC”),
                registered in the Investor’s name and address as set forth below, and
                released by U.S. Stock Transfer , the Company’s transfer agent (the
                “Transfer
                Agent”),
                to the Investor at the Closing. NO
                LATER THAN ONE (1) BUSINESS DAY AFTER THE EXECUTION OF THIS AGREEMENT
                BY
                THE INVESTOR AND THE COMPANY, THE INVESTOR SHALL:
                

            

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    
      	 	 	
              (I)

            	
              DIRECT
                THE BROKER-DEALER AT WHICH THE ACCOUNT OR ACCOUNTS TO BE CREDITED
                WITH THE
                SHARES ARE MAINTAINED TO SET UP A DEPOSIT/WITHDRAWAL AT CUSTODIAN
                (“DWAC”)
                INSTRUCTING THE TRANSFER AGENT TO CREDIT SUCH ACCOUNT OR ACCOUNTS
                WITH THE
                SHARES, AND

            

    

     

    
      	 	
              (II)

            	
              REMIT
                BY WIRE TRANSFER THE AMOUNT OF FUNDS EQUAL TO THE AGGREGATE PURCHASE
                PRICE
                FOR THE SHARES BEING PURCHASED BY THE INVESTOR TO THE FOLLOWING
                ACCOUNT:

            

    

    

    Bank
      of
      New York

    ABA
      No.
      021000018

    GLA
      111-565

    Cust
      A/C
      # 102209

    A/C
      Name
      Oppenheimer/Acacia Research Corporation

     

    -
      OR
      -

     

    
      	
              [____]

            	
              B.

            	
              Delivery
                versus payment (“DVP”)
                through DTC (i.e., the Company shall deliver Shares registered in
                the
                Investor’s name and address as set forth below and released by the
                Transfer Agent to the Investor at the Closing directly to the account(s)
                at Oppenheimer & Co. Inc. identified by the Investor and
                simultaneously therewith payment shall be made from such account(s)
                to the
                Company through DTC). NO
                LATER THAN ONE (1) BUSINESS DAY AFTER THE EXECUTION OF THIS AGREEMENT
                BY
                THE INVESTOR AND THE COMPANY, THE INVESTOR SHALL:
                

            

    

     

    
      	 	
              (I)

            	
              NOTIFY
                OPPENHEIMER & CO. INC. OF THE ACCOUNT OR ACCOUNTS AT OPPENHEIMER &
                CO. INC. TO BE CREDITED WITH THE SHARES BEING PURCHASED BY SUCH INVESTOR,
                AND 

            

    

     

    
      	 	 	
              (II)

            	
              CONFIRM
                THAT THE ACCOUNT OR ACCOUNTS AT OPPENHEIMER & CO. INC. TO BE CREDITED
                WITH THE SHARES BEING PURCHASED BY THE INVESTOR HAVE A MINIMUM BALANCE
                EQUAL TO THE AGGREGATE PURCHASE PRICE FOR THE SHARES BEING PURCHASED
                BY
                THE INVESTOR. 

            

    

     

    IT
      IS THE INVESTOR’S RESPONSIBILITY TO (A) MAKE THE NECESSARY WIRE TRANSFER OR
      CONFIRM THE PROPER ACCOUNT BALANCE IN A TIMELY MANNER AND (B) ARRANGE FOR
      SETTLEMENT BY WAY OF DWAC OR DVP IN A TIMELY MANNER. IF THE INVESTOR DOES NOT
      DELIVER THE AGGREGATE PURCHASE PRICE FOR THE UNITS OR DOES NOT MAKE PROPER
      ARRANGEMENTS FOR SETTLEMENT IN A TIMELY MANNER, THE UNITS MAY NOT BE DELIVERED
      AT CLOSING TO THE INVESTOR OR THE INVESTOR MAY BE EXCLUDED FROM THE CLOSING
      ALTOGETHER.

     

    6. The
      executed Warrant shall be delivered in accordance with the terms
      thereof.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    7. The
      Investor represents that, except as set forth below, (a) it has had no
      position, office or other material relationship within the past three years
      with
      the Company or persons known to it to be affiliates of the Company, (b) it
      is not a NASD member or an Associated Person (as such term is defined under
      the
      NASD Membership and Registration Rules Section 1011) as of the Closing, and
      (c) neither the Investor nor any group of Investors (as identified in a
      public filing made with the Commission) of which the Investor is a part in
      connection with the Offering of the Units, acquired, or obtained the right
      to
      acquire, 20% or more of the Common Stock (or securities convertible into or
      exercisable for Common Stock) or the voting power of the Company on a
      post-transaction basis. Exceptions:

     

      
        

      

    

    (If
      no
      exceptions, write “none.” If left blank, response will be deemed to be
“none.”)

     

    8. The
      Investor represents that it has received, prior to or in connection with the
      receipt of this Agreement, the final Base Prospectus, dated April 25, 2006,
      which is a part of the Company’s Registration Statement, and the Prospectus
      Supplement (collectively, the “Disclosure
      Package”)
      along
      with the Company’s counterpart to this Agreement.

     

    9. The
      Company shall have the sole right to accept offers to purchase the Units and
      may
      reject any such offer, in its sole and absolute discretion, in whole or in
      part.
      No offer by the Investor to buy Units will be accepted and no part of the
      purchase price will be delivered to the Company until the Company has accepted
      such offer by countersigning a copy of this Agreement, and any such offer may
      be
      withdrawn or revoked, without obligation or commitment of any kind, at any
      time
      prior to the Company (or a Placement Agent on behalf of the Company) sending
      (orally, in writing or by electronic mail) notice of its acceptance of such
      offer. An indication of interest in response to the Investor signing this
      Agreement will involve no obligation or commitment of any kind until this
      Agreement is accepted and countersigned by the Company and notice of such
      acceptance has been sent as aforesaid.

     

     

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    Number
      of
      Units:___________________________ 

     

    Purchase
      Price Per Unit: $_____________________

     

    Aggregate
      Purchase Price: $___________________

     

    Please
      confirm that the foregoing correctly sets forth the agreement between us by
      signing in the space provided below for that purpose.

     

     

    Dated
      as
      of: December ___, 2006

     

    _________________________________

    INVESTOR

    By:_______________________________

    Print
      Name:_________________________

    Title:______________________________

    Address:

    __________________________________

    __________________________________

    __________________________________

     

     

    

    Agreed
      and Accepted

    this
      ___
      day of December, 2006:

    

     

    ACACIA
      RESEARCH CORPORATION 

     

    

    By: _______________________________

    Name:

    Title:
      

     

     

    
      
         

      

      
         

        
          

        

      

      
         

      

       

    

    ANNEX
      I

     

    TERMS
      AND CONDITIONS FOR PURCHASE OF SHARES

     

    1.     Authorization
      and Sale of the Shares. Subject
      to the terms and conditions of this Agreement, the Company has authorized the
      sale of the Units, which consist of the Shares and the Warrants.

     

    2.     Agreement
      to Sell and Purchase the Units; Placement Agent.

     

    2.1 At
      the
      Closing (as defined in Section
      3.1),
      the
      Company will sell to the Investor, and the Investor will purchase from the
      Company, upon the terms and conditions set forth herein, the number of Units
      set
      forth on the last page of the Agreement to which these Terms and Conditions
      for
      Purchase of Units are attached as Annex
      I
      (the
“Signature
      Page”)
      for
      the aggregate purchase price therefor set forth on the Signature
      Page.

     

    2.2 The
      Company proposes to enter into substantially this same form of Subscription
      Agreement with certain other investors (the “Other
      Investors”)
      and
      expects to complete sales of Units to them for an aggregate purchase price
      not
      to exceed $10,000,000. The Investor and the Other Investors are hereinafter
      sometimes collectively referred to as the “Investors,”
and
      this Agreement and the Subscription Agreements executed by the Other Investors
      are hereinafter sometimes collectively referred to as the “Agreements.”

    

    2.3 (a)
      In
      the event that the Warrant Shares are exchangeable for shares of CombiMatrix
      Corporation (the “New
      Company Shares”)
      pursuant to a spin-out transaction of CombiMatrix Corporation from the Company
      (the “Spin
      Out”),
      then
      promptly following the effective date of the Spin Out (the “Spin
      Out Date”),
      but
      in any event no later than 30 days after the Spin Out Date (the “Filing
      Deadline”),
      the
      Company shall cause CombiMatrix Corporation to file a registration statement
      on
      Form S-3, if such form is available to CombiMatrix Corporation, covering the
      resale of the New Company Shares, in an amount sufficient to cover the resale
      of
      the New Company Shares issuable upon exchange of the Warrant Shares, in
      accordance with the terms of this Section 2.3. In the event that Form S-3 is
      unavailable and/or inappropriate for such a registration of the New Company
      Shares, CombiMatrix Corporation shall use such other form or forms as are
      available and appropriate for such a registration. If a registration statement
      covering the New Company Shares is not filed with the SEC on or prior to the
      Filing Deadline, the Company shall cause CombiMatrix Corporation to make pro
      rata payments to each Investor, as liquidated damages and not as a penalty,
      in
      an amount equal to 1.0% of the fair market value of the New Company Shares
      issuable upon the exercise of such Investor’s Warrants or pro rata for any
      portion thereof following the Filing Deadline for which no registration
      statement is filed with respect to the New Company Shares. Such payments shall
      constitute the Investors’ exclusive monetary remedy for such events, but shall
      not affect the right of the Investors to seek injunctive relief. Such payments
      shall be made to each Investor in cash. For purposes of the above calculation,
      the “fair market value” of one share of New Company Shares shall mean (i) the
      average of the closing sales prices for New Company Shares on the Nasdaq Global
      Market or other trading market where such security is listed or traded as
      reported by Bloomberg Financial Markets (or a comparable reporting service
      of
      national reputation selected by CombiMatrix Corporation and reasonably
      acceptable to the Investors if Bloomberg Financial Markets is not then reporting
      sales prices of such security) (collectively, “Bloomberg”)
      for
      the 10 consecutive trading days immediately preceding such date, or (ii) if
      the
      Nasdaq Global Market is not the principal trading market for the New Company
      Shares, the average of the reported sales prices reported by Bloomberg on the
      principal trading market for the New Company Shares during the same period,
      or,
      if there is no sales price for such period, the last sales price reported by
      Bloomberg for such period, or (iii) if neither of the foregoing applies, the
      last sales price of such security in the over-the-counter market on the pink
      sheets or bulletin board for such security as reported by Bloomberg, or if
      no
      sales price is so reported for such security, the last bid price of such
      security as reported by Bloomberg or (iv) if fair market value cannot be
      calculated as of such date on any of the foregoing bases, the fair market value
      shall be as determined by the Board of Directors of CombiMatrix Corporation
      in
      the exercise of its good faith judgment.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (b) The
      Company shall cause CombiMatrix Corporation to use its commercially reasonable
      efforts to cause the registration statement to be declared effective under
      the
      Securities Act as promptly as possible after the filing thereof. If (A) a
      registration statement covering the New Company Shares is not declared effective
      by the SEC prior to the earlier of (i) five (5) business days after the SEC
      shall have informed CombiMatrix Corporation that no review of the registration
      statement will be made or that the SEC has no further comments on the
      registration statement or (ii) the 120th day after the Spin Out Date, or (B)
      after the registration statement has been declared effective by the SEC, sales
      cannot be made pursuant to such registration statement for any reason (including
      without limitation by reason of a stop order, or CombiMatrix Corporation’s
      failure to update the registration statement), but excluding the inability
      of
      any Investor to sell its New Company Shares due to market conditions and except
      as excused pursuant to clause (c) below, then the Company shall cause
      CombiMatrix Corporation to make pro rata payments to each Investor, as
      liquidated damages and not as a penalty, in an amount equal to 1.0% of the
      fair
      market value of the New Company Shares issuable upon the exercise of such
      Investor’s Warrants or pro rata for any portion thereof following the date by
      which such registration statement should have been effective (the “Blackout
      Period”).
      Such
      payments shall constitute the Investors’ exclusive monetary remedy for such
      events, but shall not affect the right of the Investors to seek injunctive
      relief. The amounts payable as liquidated damages pursuant to this paragraph
      shall be paid monthly within three (3) business days of the last day of each
      month following the commencement of the Blackout Period until the termination
      of
      the Blackout Period. Such payments shall be made to each Investor in
      cash.

    

    (c) For
      not
      more than twenty (20) consecutive days or for a total of not more than
      forty-five (45) days in any twelve (12) month period, CombiMatrix Corporation
      may delay the disclosure of material non-public information concerning the
      CombiMatrix Corporation, by suspending the use of any prospectus included in
      any
      registration contemplated by this Section 2.3 containing such information,
      the
      disclosure of which at the time is not, in the good faith opinion of CombiMatrix
      Corporation, in the best interests of CombiMatrix Corporation (an “Allowed
      Delay”);
      provided, that CombiMatrix Corporation shall promptly (i) notify the Investors
      in writing of the existence of (but in no event, without the prior written
      consent of an Investor, shall CombiMatrix Corporation disclose to such Investor
      any of the facts or circumstances regarding) material non-public information
      giving rise to an Allowed Delay, (ii) advise the Investors in writing to cease
      all sales under the registration statement until the end of the Allowed Delay
      and (c) use commercially reasonable efforts to terminate an Allowed Delay as
      promptly as practicable.

    

    (d) CombiMatrix
      Corporation shall use its best efforts to keep such registration statement
      effective (pursuant to Rule 415 if available) at all times until such date
      as is
      the earlier of (i) the date on which all such New Company Shares have been
      sold
      and (ii) the date on which such New Company Shares may be immediately sold
      without restriction (including without limitation as to volume restrictions
      by
      each holder thereof) without registration under the Securities Act pursuant
      to
      Rule 144(k).

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    2.4 Investor
      acknowledges that the Company intends to pay Oppenheimer & Co. Inc. (the
“Placement
      Agent”)
      a fee
      (the “Placement
      Fee”)
      in
      respect of the sale of Units to the Investor.

    

    2.5 The
      Company has entered into a Placement Agent Agreement (the “Placement
      Agreement”)
      with
      the Placement Agent that contains certain representations, warranties, covenants
      and agreements of the Company that may be relied upon by the Investor, which
      shall be a third party beneficiary thereof. As a condition to closing, the
      Company shall cause its counsel(s) to issue to the Investor or to permit the
      Investor to rely on any legal opinions being issued by such counsel(s) to the
      Placement Agent in connection with the transactions contemplated hereby. A
      copy
      of the Placement Agreement is available upon request.

    

    3.     Closings
      and Delivery of the Units and Funds. 

     

    3.1 Closing.
      The
      completion of the purchase and sale of the Units (the “Closing”)
      will
      occur at a place and time (the “Closing
      Date”)
      to be
      specified by the Company and the Placement Agent, and of which the Investors
      will be notified in advance by the Placement Agent. At the Closing, (a) the
      Company will cause the Transfer Agent to deliver to the Investor the number
      of
      Shares (and Units) set forth on the Signature Page registered in the name of
      the
      Investor or, if so indicated on the Investor Questionnaire attached hereto
      as
Exhibit B,
      in the
      name of a nominee designated by the Investor, (b) the Company shall cause
      to be delivered to the Investor a Warrant to purchase the number of whole
      Warrant Shares determined by multiplying the number of Shares (and Units) set
      forth on the signature page by the Warrant Ratio and rounding up to the nearest
      whole number and (c) the aggregate purchase price for the Units being
      purchased by the Investor will be delivered by or on behalf of the Investor
      to
      the Company. 

     

    3.2 (a) Conditions
      to the Company’s Obligations.
      The
      Company’s obligation to issue the Shares and the Warrants to the Investor will
      be subject to the receipt by the Company of the purchase price for the Units
      being purchased hereunder as set forth on the Signature Page and the accuracy
      of
      the representations and warranties made by the Investor and the fulfillment
      of
      those undertakings of the Investor to be fulfilled prior to the Closing
      Date.

    

    (b) Conditions
      to the Investor’s Obligations.
      The
      Investor’s obligation to purchase the Units will be subject to the accuracy of
      the representations and warranties made by the Company and the fulfillment
      of
      those undertakings of the Company to be fulfilled prior to the Closing Date,
      including, without limitation, those contained in the Placement Agreement
      (collectively, the “Company
      Closing Conditions”),
      and
      to the condition that the Placement Agent shall not have: (1) terminated
      the Placement Agreement pursuant to the terms thereof or (2) determined
      that the conditions to the closing in the Placement Agreement have not been
      satisfied. The Investor’s obligations are expressly not conditioned on the
      purchase by any or all of the Other Investors of the Units that they have agreed
      to purchase from the Company.

    

    3.3   Delivery
      of Funds.
      

    

    (a) Delivery
      by Electronic Book-Entry at The Depository Trust Company.
      If the
      Investor elects to settle the Shares purchased by such Investor through delivery
      by electronic book-entry at DTC, no
      later than one (1) business day after the execution of this Agreement by the
      Investor and the Company,
      the
      Investor shall remit by wire transfer the amount of funds equal to the aggregate
      purchase price for the shares being purchased by the Investor to the following
      account designated by the Company and the Placement Agent pursuant to the terms
      of that certain Escrow Agreement (the “Escrow
      Agreement”)
      dated
      as of December 6, 2006, by and among the Company, the Placement Agent and The
      Bank of New York (the “Escrow
      Agent”):

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    Bank
      of
      New York

    ABA
      No.
      021000018

    GLA
      111-565

    Cust
      A/C
      # 102209

    A/C
      Name
      Oppenheimer/Acacia Research Corporation

    

    Such
      funds shall be held in escrow until the Closing and delivered by the Escrow
      Agent on behalf of the Investors to the Company upon the satisfaction, in the
      sole judgment of the Placement Agent, of the Company Closing Conditions. The
      Placement Agent shall have no rights in or to any of the escrowed funds, unless
      the Placement Agent and the Escrow Agent are notified in writing by the Company
      in connection with the Closing that a portion of the escrowed funds shall be
      applied to the Placement Fee. The
      Company and the Investor agree to indemnify and hold the Escrow Agent harmless
      from and against any and all losses, costs, damages, expenses and claims
      (including, without limitation, court costs and reasonable attorneys fees)
      (“Losses”)
      arising under this Section
      3.3
      or
      otherwise with respect to the funds held in escrow pursuant hereto or arising
      under the Escrow Agreement, unless it is finally determined that such Losses
      resulted directly from the willful misconduct or gross negligence of the Escrow
      Agent. Anything in this Agreement to the contrary notwithstanding, in no event
      shall the Escrow Agent be liable for any special, indirect or consequential
      loss
      or damage of any kind whatsoever (including but not limited to lost profits),
      even if the Escrow Agent has been advised of the likelihood of such loss or
      damage and regardless of the form of action.

    

    Investor
      shall also furnish to the Placement Agent a completed W-9 form (or, in the
      case
      of an Investor who is not a United States citizen or resident, a W-8
      form).

    

    Investor
      acknowledges that the Escrow Agent acts as counsel to the Placement Agent,
      and
      shall have the right to continue to represent the Placement Agent, in any
      action, proceeding, claim, litigation, dispute, arbitration or negotiation
      in
      connection with the Offering, and Investor hereby consents thereto and waives
      any objection to the continued representation of the Placement Agent by the
      Escrow Agent in connection therewith based upon the services of the Escrow
      Agent
      under the Escrow Agreement, without waiving any duty or obligation the Escrow
      Agent may have to any other person.

    

    (b) Delivery
      Versus Payment through The Depository Trust Company.
      If the
      Investor elects to settle the Shares purchased by such Investor by delivery
      versus payment through DTC, no
      later than one (1) business day after the execution of this Agreement by the
      Investor and the Company,
      the
      Investor shall confirm that the account or accounts at Oppenheimer & Co.
      Inc. to be credited with the Shares being purchased by the Investor have a
      minimum balance equal to the aggregate purchase price for the Units being
      purchased by the Investor. 

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    3.4   Delivery
      of Shares.
      

    

    (a) Delivery
      by Electronic Book-Entry at The Depository Trust Company.
      If the
      Investor elects to settle the Shares purchased by such Investor through delivery
      by electronic book-entry at DTC, no
      later than one (1) business day after the execution of this Agreement by the
      Investor and the Company,
      the
      Investor shall direct the broker-dealer at which the account or accounts to
      be
      credited with the Shares being purchased by such Investor are maintained, which
      broker/dealer shall be a DTC participant, to set up a Deposit/Withdrawal at
      Custodian (“DWAC”) instructing U.S. Stock Transfer, the Company’s transfer
      agent, to credit such account or accounts with the Shares by means of an
      electronic book-entry delivery. Such DWAC shall indicate the settlement date
      for
      the deposit of the Shares, which date shall be provided to the Investor by
      the
      Placement Agent. Simultaneously with the delivery to the Company by the Escrow
      Agent of the funds held in escrow pursuant to Section
      3.3
      above,
      the Company shall direct its transfer agent to credit the Investor’s account or
      accounts with the Shares pursuant to the information contained in the DWAC.
      

    

    (b) Delivery
      Versus Payment through The Depository Trust Company.
      If the
      Investor elects to settle the Shares purchased by such Investor by delivery
      versus payment through DTC, no
      later than one (1) business day after the execution of this Agreement by the
      Investor and the Company,
      the
      Investor shall notify Oppenheimer & Co. Inc. of the account or accounts at
      Oppenheimer & Co. Inc. to be credited with the Shares being purchased by
      such Investor. On the Closing Date, the Company shall deliver the Shares to
      the
      Investor directly to the account(s) at Oppenheimer & Co. Inc. identified by
      Investor and simultaneously therewith payment shall be made from such account(s)
      to the Company through DTC.

     

    4.     Representations,
      Warranties and Covenants of the Investor.

     

    4.1 The
      Investor represents and warrants to, and covenants with, the Company that
      (a) the Investor is knowledgeable, sophisticated and experienced in making,
      and is qualified to make decisions with respect to, investments in shares
      presenting an investment decision like that involved in the purchase of the
      Units, including investments in securities issued by the Company and investments
      in comparable companies, and has requested, received, reviewed and considered
      all information it deemed relevant in making an informed decision to purchase
      the Units, (b) the Investor has answered all questions on the Signature
      Page and the Investor Questionnaire for use in preparation of the Prospectus
      Supplement and the answers thereto are true and correct as of the date hereof
      and will be true and correct as of the Closing Date, and (c) the Investor,
      in connection with its decision to purchase the number of Units set forth on
      the
      Signature Page, is relying only upon the Disclosure Package, the documents
      incorporated by reference therein and the representations and warranties of
      the
      Company contained herein, and the representations and warranties of the Company
      in the Placement Agreement. 

     

    4.2 The
      Investor acknowledges, represents and agrees that no action has been or will
      be
      taken in any jurisdiction outside the United States by the Company or any
      Placement Agent that would permit an offering of the Units, or possession or
      distribution of offering materials in connection with the issue of the Units
      in
      any jurisdiction outside the United States where action for that purpose is
      required. Each Investor outside the United States will comply with all
      applicable laws and regulations in each foreign jurisdiction in which it
      purchases, offers, sells or delivers Units or has in its possession or
      distributes any offering material, in all cases at its own expense. The
      Placement Agent are not authorized to make and have not made any representation
      or use of any information in connection with the issue, placement, purchase
      and
      sale of the Units, except as set forth or incorporated by reference in the
      Disclosure Package or the Prospectus. 

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    4.3 The
      Investor further represents and warrants to, and covenants with, the Company
      that (a) the Investor has full right, power, authority and capacity to
      enter into this Agreement and to consummate the transactions contemplated hereby
      and has taken all necessary action to authorize the execution, delivery and
      performance of this Agreement, and (b) this Agreement constitutes a valid
      and binding obligation of the Investor enforceable against the Investor in
      accordance with its terms, except as enforceability may be limited by applicable
      bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
      creditors’ and contracting parties’ rights generally and except as
      enforceability may be subject to general principles of equity (regardless of
      whether such enforceability is considered in a proceeding in equity or at law)
      and except as the indemnification agreements of the Investors herein may be
      legally unenforceable. 

     

    4.4 The
      Investor understands that nothing in this Agreement or any other materials
      presented to the Investor in connection with the purchase and sale of the Units
      constitutes legal, tax or investment advice. The Investor has consulted such
      legal, tax and investment advisors as it, in its sole discretion, has deemed
      necessary or appropriate in connection with its purchase of Units. 

     

    4.5 The
      Investor represents, warrants and agrees that, since the earlier to occur of
      (i) the date on which the Placement Agent first contacted the Investor
      about the Offering and (ii) the date that is the tenth (10) trading
      day prior to the date of this Agreement, it has not engaged in any short selling
      of the Company’s securities, or established or increased any “put equivalent
      position” as defined in Rule 16(a)-1(h) under the Securities Exchange Act of
      1934, as amended, with respect to the Company’s securities. 

     

    5.    Survival
      of Representations, Warranties and Agreements. Notwithstanding
      any investigation made by any party to this Agreement or by the Placement Agent,
      all covenants, agreements, representations and warranties made by the Company
      and the Investor herein will survive the execution of this Agreement, the
      delivery to the Investor of the Units being purchased and the payment
      therefor.

     

    6.    
      For
      purposes of this Section 6, the following definitions shall
      apply:

     

    (a)
      “Approved
      Stock Plan”
means
      any employee benefit plan which has been approved by the Board of Directors
      of
      the Company, pursuant to which the Company’s securities may be issued to any
      employee, officer or director for services provided to the Company.

     

    (b)
      “Common
      Stock Equivalents”
means,
      collectively, Options and Convertible Securities.

     

    (c)
      “Convertible
      Securities”
means
      any stock or securities (other than Options) convertible into or exercisable
      or
      exchangeable for Common Stock. 

     

    (d)
      “Excluded
      Securities”
means
      Common Stock issued or issuable: (i) as a stock dividend to holders of
      Common Stock or upon any subdivision or combination of shares of Common Stock;
      (ii) in connection with any Approved Stock Plan; (iii) any securities
      issued to the seller as consideration for the acquisition of another entity
      by
      the Company by merger or share exchange (whereby the Company owns no less than
      51% of the voting power of the surviving entity) or purchase of substantially
      all of such entity’s stock or assets; (iv) any securities issued in
      connection with a license, strategic partnership, joint venture or other similar
      agreement, provided that the purpose of such arrangement is not primarily the
      raising of capital; (v) upon exercise of warrants issued as a part of the
      issuance of straight debt securities (with no equity or equity-linked feature)
      issued to a financial institution or lender in connection with a bank loan,
      credit, lease, or other debt transaction with such financial institution or
      lender (where warrant coverage is not greater than 5%); or (vi) upon
      conversion of any Options or Convertible Securities which are outstanding on
      the
      day immediately preceding the Closing Date, provided that the terms of such
      Options or Convertible Securities are not amended, modified or changed on or
      after the Closing Date. 

     

    (e)
      “Options”
means
      any rights, warrants or options to subscribe for or purchase Common Stock or
      Convertible Securities.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    From
      the
      date hereof until the date that is 90 days after the Closing Date, the Company
      will not, directly or indirectly, offer, sell, grant any option to purchase,
      or
      otherwise dispose of (or announce any offer, sale, grant or any option to
      purchase or other disposition of) any of its or its subsidiaries’ equity or
      equity equivalent securities, including without limitation any debt, preferred
      stock or other instrument or security that is, at any time during its life
      and
      under any circumstances, convertible into or exchangeable or exercisable for
      shares of Common Stock or Common Stock Equivalents. The restrictions contained
      in this Section shall not apply in connection with the issuance of any Excluded
      Securities.

    

    7. Notices.
      All
      notices, requests, consents and other communications hereunder will be in
      writing, will be mailed (a) if within the domestic United States by first-class
      registered or certified airmail, or nationally recognized overnight express
      courier, postage prepaid, or by facsimile or (b) if delivered from outside
      the
      United States, by International Federal Express or facsimile, and will be deemed
      given (i) if delivered by first-class registered or certified mail domestic,
      three business days after so mailed, (ii) if delivered by nationally recognized
      overnight carrier, one business day after so mailed, (iii) if delivered by
      International Federal Express, two business days after so mailed and (iv) if
      delivered by facsimile, upon electric confirmation of receipt and will be
      delivered and addressed as follows:

     

    (a)    if
      to the
      Company, to: 

     

    Acacia
      Research Corporation

    500
      Newport Center Drive, 7th
      Floor

    Newport
      Beach, California 92660

    Attention:
      Chief Financial Officer

    Phone:
      (949) 480-8300

    Telecopy:
      (949) 480-8301

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    with
      copies to: 

     

    Greenberg
      Traurig, LLP

    650
      Town
      Center Drive, Suite 1700

    Costa
      Mesa, California 92626

    Attention:
      Raymond A. Lee

    Phone:
      (714) 708-6500

    Telecopy:
      (714) 708-6501 

     

    (b)    if
      to the
      Investor, at its address on the Signature Page hereto, or at such other address
      or addresses as may have been furnished to the Company in writing.

     

    8.
      Changes.
      This
      Agreement may not be modified or amended except pursuant to an instrument in
      writing signed by the Company and the Investor.

     

    9.
      Headings.
      The
      headings of the various sections of this Agreement have been inserted for
      convenience of reference only and will not be deemed to be part of this
      Agreement.

     

    10. Severability.
      In
      case
      any provision contained in this Agreement should be invalid, illegal or
      unenforceable in any respect, the validity, legality and enforceability of
      the
      remaining provisions contained herein will not in any way be affected or
      impaired thereby.

     

    11. Governing
      Law. This
      Agreement will be governed by, and construed in accordance with, the internal
      laws of the State of New York, without giving effect to the principles of
      conflicts of law that would require the application of the laws of any other
      jurisdiction.

     

    12. Counterparts.
      This
      Agreement may be executed in two or more counterparts, each of which will
      constitute an original, but all of which, when taken together, will constitute
      but one instrument, and will become effective when one or more counterparts
      have
      been signed by each party hereto and delivered to the other parties. The Company
      and the Investor acknowledge and agree that the Company shall deliver its
      counterpart to the Investor along with the Prospectus Supplement. 

     

    13. Confirmation
      of Sale.
      The
      Investor acknowledges and agrees that such Investor’s receipt of the Company’s
      counterpart to this Agreement, together with the Prospectus Supplement, shall
      constitute written confirmation of the Company’s sale of Shares to such
      Investor.

     

    14. Press
      Release. The
      Company and the Investor agree that the Company shall issue a press release
      announcing the Offering prior to the opening of the financial markets in New
      York City on the business day immediately after the date hereof, which press
      release the Company agrees to provide to the Investor for review prior to its
      issuance.

     

    15. Termination.
      In the
      event that the Placement Agreement is terminated by the Placement Agent pursuant
      to the terms thereof, this Agreement shall terminate without any further action
      on the part of the parties hereto.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    
 

    Exhibit
      A

     

    [FORM
      OF WARRANT]

     

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

     

    Exhibit
      B

     

    ACACIA
      RESEARCH CORPORATION

     

    INVESTOR
      QUESTIONNAIRE

     

     

    Pursuant
      to Section
      3
      of
Annex
      I
      to the
      Agreement, please provide us with the following information:

    

    
      	 1.	
              The
                exact name that your Shares and Warrants are to be registered in.
                You may
                use a nominee name if appropriate:

            	 	
              

            
	 	 	 	 
	 2.	
              The
                relationship between the Investor and the registered holder listed
                in
                response to item 1 above:

            	 	
              

            
	 	 	 	 
	 3. 	
              The
                mailing address of the registered holder listed in response to item
                1
                above:

            	 	
              

            
	 	 	 	 
	 4.	
              The
                Social Security Number or Tax Identification Number of the registered
                holder listed in the response to item 1 above:

            	 	
              

            
	 	 	 	 
	 5.	
              Name
                of DTC Participant (broker-dealer at which the account or accounts
                to be
                credited with the Shares are maintained):

            	 	
              

            
	 	 	 	 
	 6.	
              DTC
                Participant Number:

            	 	
              

            
	 	 	 	 
	 7.	
              Name
                of Account at DTC Participant being credited with the
                Shares:

            	 	
              

            
	 	 	 	 
	 8.	
              Account
                Number at DTC Participant being credited with the Shares:

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