Document:

Unassociated Document

    EXHIBIT
      10.8

     

    FORM
      OF
      INDEMNIFICATION AGREEMENT

     

    THIS
      AGREEMENT is made as of December _____, 2006, by and between CombiMatrix
      Corporation, a Delaware corporation (the “Company”), and _________________., one
      of the Directors of the Company (the “Indemnitee”),
      with
      reference to the following facts:

     

     

    R
      E C I T
      A L S:

     

    The
      Indemnitee is currently serving as a Director of the Company and the Company
      wishes the Indemnitee to continue in such capacity. The Indemnitee is willing,
      under certain circumstances, to continue serving as a Director of the Company.
      

     

    Section
      145 of the General Corporation Law of the State of Delaware, under which Law
      the
      Company is organized, empowers corporations to indemnify a person serving as
      a
      director, officer, employee or agent of the corporation and a person who serves
      at the request of the corporation as a director, officer, employee or agent
      of
      another corporation, partnership, joint venture, trust, or other enterprise,
      and
      said Section 145 specifies that the indemnification set forth in said Section
      145 shall not be deemed exclusive of any other rights to which those seeking
      indemnification may be entitled under any By-Law, agreement, vote of
      stockholders or disinterested directors or otherwise. 

     

    In
      order
      to induce the Indemnitee to continue to serve as a Director of the Company
      and
      in consideration of his continued service, the Company has determined and agreed
      to enter into this agreement with the Indemnitee. 

     

    NOW,
      THEREFORE, in consideration of the Indemnitee’s continued service as a Director
      of the Company, the parties hereto agree as follows:

     

    INDEMNITY.
      The Company will indemnify the Indemnitee, his executors, administrators or
      assigns, for any Damages or Expenses (as defined below) which the Indemnitee
      is
      or becomes legally obligated to pay in connection with any Proceeding. As used
      in this Agreement the term “Proceeding” shall include any threatened, pending or
      completed claim, action, suit or proceeding, whether brought by or in the right
      of the Company or otherwise and whether of a civil, criminal, administrative
      or
      investigative nature, in which the Indemnitee may be or may have been involved
      as a party or otherwise, by reason of the fact that Indemnitee is or was a
      director or officer of the Company, by reason of any actual or alleged error
      or
      misstatement or misleading statement or omission made or suffered by the
      Indemnitee, by reason of any action taken by him or of any inaction on his
      part
      while acting as such director or officer, or by reason of the fact that the
      Indemnitee was serving at the request of the Company as a director, trustee,
      officer, employee or agent of another corporation, partnership, joint venture,
      trust or other enterprise; provided, that in each such case Indemnitee acted
      in
      good faith and in a manner which he reasonably believed to be in or not opposed
      to the best interests of the Company, and, in the case of a criminal proceeding,
      in addition had no reasonable cause to believe that his conduct was unlawful.
      The termination of any action, suit or proceeding by judgment, order, settlement
      or conviction, or upon a plea of nolo
      contendere
      or its
      equivalent, shall not, of itself, create a presumption that such Indemnitee
      did
      not act in good faith and in a manner which he reasonably believed to be in
      or
      not opposed to the best interests of the Company, and, with respect to any
      criminal action or proceeding, had reasonable cause to believe that his conduct
      was unlawful. As used in this Agreement, the term “other enterprise” shall
      include (without limitation) employee benefit plans and administrative
      committees thereof, and the term “fines” shall include (without limitation) any
      excise tax assessed with respect to any employee benefit plan. References to
      “serving at the request of the Corporation” shall include any service as a
      director, officer, employee or agent of the Corporation which imposes duties
      on,
      or involves services by, such director, officer, employee or agent with respect
      to an employee benefit plan, its participants or beneficiaries, and if such
      Indemnitee acted in good faith and in a manner he reasonably believed to be
      in
      the interest of the participants and beneficiaries of an employee benefit plan
      he shall be deemed to have acted in a manner “not opposed to the best interests
      of the Company” as referred to above.

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

       

    

    EXPENSES.
      As used in this Agreement, the term “Expenses” shall include, without
      limitation, damages, judgments, fines, penalties, settlements and costs,
      attorneys’ fees and disbursements and costs of attachment or similar bonds,
      investigations, and any expenses of establishing a right to indemnification
      under this Agreement and the term “Damages” shall include damages, judgments,
      fines, penalties and settlements. 

     

    ENFORCEMENT.
      If a claim or request under this Agreement is not paid by the Company, or on
      its
      behalf, within thirty days after a written claim or request has been received
      by
      the Company, the Indemnitee may at any time thereafter bring suit against the
      Company to recover the unpaid amount of the claim or request and if successful
      in whole or in part, the Indemnitee shall be entitled to be paid also the
      Expenses of prosecuting such suit. The Company shall have the right to recoup
      from the Indemnitee the amount of any item or items of Expenses (other than
      Damages) theretofore paid by the Company pursuant to this Agreement, to the
      extent such Expenses are not reasonable in nature or amount; provided, however,
      that the Company shall have the burden of proving such Expenses to be
      unreasonable. The burden of proving that the Indemnitee is not entitled to
      indemnification for any other reason shall be upon the Company.

     

    SUBROGATION.
      In the event that the Company pays any Expenses under this Agreement, the
      Company shall be subrogated to the extent of such payment to all of the rights
      of recovery of the Indemnitee, who shall execute all papers required and shall
      do everything that may be necessary to secure such rights, including the
      execution of such documents necessary to enable the Company effectively to
      bring
      suit to enforce such rights. 

     

    EXCLUSIONS.
      Notwithstanding the foregoing, the Company shall not be liable under this
      Agreement to pay any Expenses in connection with any Proceeding: 

     

    to
      the
      extent that payment of such Expenses is actually made to the Indemnitee under
      a
      valid, enforceable and collectible insurance policy;

     

    to
      the
      extent that the Indemnitee is indemnified and actually paid otherwise than
      pursuant to this Agreement;

     

    in
      connection with a judicial action by or in the right of the Company, in respect
      of any claim, issue or matter as to which the Indemnitee shall have been
      adjudged to be liable to the Company unless and only to the extent that the
      Court of Chancery of the State of Delaware or the court in which such Proceeding
      was brought shall determine upon application that, despite the adjudication
      of
      liability but in view of all the circumstances of the case, the Indemnitee
      is
      fairly and reasonably entitled to indemnity for such Expenses as such court
      shall deem proper;

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

       

    

    if
      it is
      proved by final judgment in a court of law or other final adjudication that
      the
      Indemnitee had in fact gained any personal profit or advantage to which he
      was
      not legally entitled;

     

    for
      a
      disgorgement of profits made from the purchase and sale by the Indemnitee of
      securities pursuant to Section 16(b) of the Securities Exchange Act of 1934
      and
      amendments thereto or similar provisions of any state statutory law or common
      law;

     

    brought
      about or contributed to by the dishonesty of the Indemnitee seeking payment
      hereunder; however, notwithstanding the foregoing, the Indemnitee shall be
      protected under this Agreement as to any Proceeding brought against him by
      reason of any alleged dishonesty on such Indemnitee’s part, unless a judgment or
      other final adjudication thereof adverse to such Indemnitee shall establish
      that
      he committed (i) acts of active and deliberate dishonesty, (ii) with actual
      dishonest purpose and intent and (iii) such acts were material to the cause
      of
      action so adjudicated; or

     

    for
      any
      Damages which the Company is prohibited by applicable law from paying as
      indemnity. 

     

    INDEMNIFICATION
      OF EXPENSES OF SUCCESSFUL PARTY. Notwithstanding any other provision of this
      Agreement, to the extent that the Indemnitee has been successful on the merits
      or otherwise in defense of any Proceeding or in defense of any claim, issue
      or
      matter therein, including dismissal without prejudice, Indemnitee shall be
      indemnified against any and all Expenses actually and reasonably incurred in
      connection therewith.

     

    PARTIAL
      INDEMNIFICATION. If the Indemnitee is entitled under any provision of this
      Agreement to indemnification by the Company for some or a portion of Expenses,
      but not, however, for the total amount thereof, the Company shall nevertheless
      indemnify the Indemnitee for the portion of such Expenses to which the
      Indemnitee is entitled.

     

    ADVANCE
      OF EXPENSES. Expenses incurred by the Indemnitee in connection with any
      Proceeding, except the amount of any Damages, shall be paid by the Company
      in
      advance of the final disposition thereof upon request of the Indemnitee that
      the
      Company pay such Expenses. The Indemnitee hereby undertakes to repay to the
      Company the amount of any Expenses theretofore paid by the Company to the extent
      that it is ultimately determined that such Expenses were not reasonable or
      that
      the Indemnitee is not entitled to indemnification therefor.

     

    APPROVAL
      OF PAYMENT OF DAMAGES. No payment of Damages for which indemnity shall be sought
      under this Agreement, other than those in respect of judgments and verdicts
      actually rendered, shall be incurred without the prior consent of the Company,
      which consent shall not be unreasonably withheld. 

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

       

    

    NOTICE
      OF
      CLAIM. The Indemnitee, as a condition precedent to his right to be indemnified
      under this Agreement, shall give to the Company notice in writing as soon as
      reasonably practicable of any Proceeding against any of him for which indemnity
      will or could be sought under this Agreement. Notice to the Company shall be
      given at its principal office and shall be directed to the Corporate Secretary
      (or such other address as the Company shall designate in writing to the
      Indemnitee); notice shall be deemed given on the earlier of the date of receipt
      or the seventh day after it is sent by properly addressed, prepaid registered
      or
      certified mail, return receipt requested. In addition, the Indemnitee shall
      give
      the Company such information and cooperation as it may reasonably require and
      as
      shall be within the Indemnitee’s power. 

     

    COUNTERPARTS.
      This Agreement may be executed in any number of counterparts, all of which
      taken
      together shall constitute one instrument.

     

    INDEMNIFICATION
      HEREUNDER NOT EXCLUSIVE. Nothing herein shall be deemed to diminish or otherwise
      restrict the Indemnitee’s right to indemnification under any provision of the
      Certificate of Incorporation or By-Laws of the Company and amendments thereto
      or
      under law. 

     

    GOVERNING
      LAW. This Agreement shall be governed by and construed in accordance with
      Delaware law. 

     

    SAVING
      CLAUSE. Wherever there is conflict between any provision of this Agreement
      and
      any applicable present or future statute, law or regulation contrary to which
      the Company and the Indemnitee have no legal right to contract, the latter
      shall
      prevail, but in such event the affected provisions of this Agreement shall
      be
      curtailed and restricted only to the extent necessary to bring them within
      applicable legal requirements. 

     

    COVERAGE.
      The provisions of this Agreement shall apply with respect to the Indemnitee’s
      service as a Director of the Company prior to the date of this Agreement and
      with respect to all periods of such service after the date of this Agreement,
      even though such Indemnitee may have ceased to be a Director of the Company
      and
      shall inure to the benefit of the heirs, executors and administrators of the
      Indemnitee. 

     

    SURVIVAL
      OF AGREEMENT. For purposes of this Agreement, any reference to the Company”
shall include, in addition to the resulting or surviving corporation, any
      constituent corporation (including any constituent of a constituent) absorbed
      in
      a consolidation or merger which, if its separate existence had continued, would
      have had power and authority to indemnify its directors, officers, employees
      or
      agents, so that any person who is or was a director, officer, employee or agent
      of such constituent corporation, or is or was serving at the request of such
      constituent corporation as a director, officer, employee or agent of another
      corporation, partnership, joint venture, trust or other enterprise, shall stand
      in the same position under the provisions of this Agreement with respect to
      the
      resulting or surviving corporation as he would have with respect to such
      constituent corporation if its separate existence had continued. 

     

    
      
        
        

      

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

     

    
      	 	
              COMBIMATRIX CORPORATION, 

              a Delaware corporation

            
	 	 
	 	By:   ____________________________________________ 
	 	         [Name] 
	 	Its:   [Title] 
	 	 
	 	INDEMNITEE: 
	 	___________________________________________ 
	 	[Name] 

    

     

     

     

     

    5Unassociated Document

EXHIBIT 10.18

    

     

    
      
        

      

     

    EMPLOYEE
      MATTERS AGREEMENT

     

    by
      and
      between

     

    ACACIA
      RESEARCH CORPORATION

     

    and

     

    COMBIMATRIX
      CORPORATION

     

     

    
      
        

      

     

     

     

    December
      21, 2006

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    TABLE
      OF CONTENTS

     

    Page

    
      	
              ARTICLE
                I
                DEFINITIONS 

            	
               1

            
	
              Section
                1.01    General

            	
               1

            
	 	
               

            
	
              ARTICLE
                II
                EMPLOYEES 

            	
               3

            
	
              Section
                2.01    Employees

            	
               3

            
	
              Section
                2.02    Non-Solicitation
                of Employees

            	
               4

            
	 	 
	
              ARTICLE
                III
                SAVINGS PLANS 

            	
               4

            
	 	 
	
              ARTICLE
                IV
                OPTIONS 

            	
               5

            
	 	 
	
              ARTICLE
                V
                OTHER EMPLOYEE PLANS AND MATTERS 

            	
               5

            
	
              Section
                5.01    Welfare
                Plans

            	
               5

            
	
              Section
                5.02    Incentive
                Compensation Plans

            	
               6

            
	Section
              5.03    Deferred
              Compensation Plans	
               7

            
	Section
              5.04    Severance
              Pay	
               7

            
	Section
              5.05    Employment,
              Consulting and Other Employee Related Agreements	
               7

            
	Section
              5.06    Workers
              Compensation	
               8

            
	Section
              5.07    Other
              Liabilities	
               8

            
	 	 
	
              ARTICLE
                VI
                MISCELLANEOUS 

            	
               9

            
	Section
              6.01    Indemnification	
               9

            
	Section
              6.02    Sharing
              of Information	
               9

            
	Section
              6.03    Entire
              Agreement; Construction	
               9

            
	Section
              6.04    Survival
              of Agreements	
               9

            
	Section
              6.05    Governing
              Law	
               9

            
	Section
              6.06    Notices	
               10

            
	Section
              6.07    Amendments	
               10

            
	Section
              6.08    Assignment	
               10

            
	Section
              6.09    Captions;
              Currency	
               10

            
	Section
              6.10    Severability	
               10

            
	Section
              6.11    Parties
              in Interest	
               11

            
	Section
              6.12    Schedules	
               11

            
	Section
              6.13    Termination	
               11

            
	Section
              6.14    Change
              of Name	
               11

            
	Section
              6.15    Waivers;
              Remedies	
               11

            
	Section
              6.16    Counterparts	
               11

            
	Section
              6.17    Performance	
               12

            
	Section
              6.18    Dispute
              Resolution	
               12

            
	Section
              6.19    Cooperation	
               12

            
	Section
              6.20    Interpretation	
               12

            

    

     

    
      
        
        

      

      
        i

        
          

        

      

      
        
        

      

       

    

    EMPLOYEE
      MATTERS AGREEMENT

     

    EMPLOYEE
      MATTERS AGREEMENT (this “Agreement”)
      dated
      as of December 21, 2006 by and between ACACIA RESEARCH CORPORATION, a
      Delaware corporation (“Acacia”),
      and
      COMBIMATRIX CORPORATION, a Delaware corporation (“CombiMatrix”),
      a
      wholly owned subsidiary of Acacia.

     

    WHEREAS,
      the Acacia Board of Directors has determined that it is appropriate and
      desirable, subject to the terms and conditions set forth in the Distribution
      Agreement by and between Acacia and CombiMatrix dated as of the date hereof
      (the
“Distribution
      Agreement”),
      to
      distribute all outstanding shares of CombiMatrix Common Stock on a pro rata
      basis to the holders of CombiMatrix Tracking Stock (the “Distribution”);
      

     

    WHEREAS,
      in connection with the Distribution, Acacia and CombiMatrix have determined
      that
      it is appropriate and desirable to provide for the allocation of certain other
      matters relating to employees, employee benefit plans and compensation
      arrangements;

     

    NOW,
      THEREFORE, in consideration of the premises and the respective agreements and
      covenants contained in this Agreement, the parties hereby agree as
      follows:

     

    ARTICLE
      I

     

    DEFINITIONS

     

    Section
      1.01  General.
      The
      following terms have the following meanings (in each case, such meanings to
      be
      equally applicable to both the singular and plural forms of the terms
      defined):

     

    “Acacia”
has
      the
      meaning set forth in the preamble.

     

    “Acacia
      Group”
means
      Acacia Research Corporation and all of its Subsidiaries, excluding any entities
      in the CombiMatrix Group.

     

    “Acacia
      Participant”
means
      any individual who, immediately after the Time of Distribution, is (i) an
      Active Acacia Employee, (ii) a Former Acacia Employee or
      (iii) a beneficiary of either of the foregoing.

     

    “Acacia
      Savings Plan”
means
      the Acacia Technologies Services Corporation 401(k) Savings Plan, including
      all
      amendments thereto through the Distribution Date.

     

    “Acacia
      Welfare Plans”
mean
      the Welfare Plans maintained by Acacia and its Subsidiaries (excluding members
      of the CombiMatrix Group) immediately prior to the Time of
      Distribution.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

       

    

    “Active
      Acacia Employee”
means
      any individual who, immediately after the Time of Distribution, will be employed
      by a member of the Acacia Group pursuant to Section 2.01(b).

     

    “Active
      CombiMatrix Employee”
means
      any individual who, immediately after the Time of Distribution, will be employed
      by a member of the CombiMatrix Group pursuant to Section 2.01(a).

     

    “Agreement”
has
      the
      meaning set forth in the preamble.

     

    “CombiMatrix”
has
      the
      meaning set forth in the preamble.

     

    “CombiMatrix
      Group”
means
      CombiMatrix and all of its Subsidiaries.

     

    “CombiMatrix
      Participant”
means
      any individual who, immediately after the Time of Distribution, is (i) an Active
      CombiMatrix Employee, (ii) a Former CombiMatrix Employee or (iii) a beneficiary
      of either of the foregoing.

     

    “CombiMatrix
      Savings Plan”
means
      the CombiMatrix Corporation 401(k) Savings Plan, including all amendments
      thereto through the Distribution Date.

     

    “CombiMatrix
      Tracking Stock”
means
      the Acacia common stock designated for its CombiMatrix Subsidiary prior to
      the
      Time of Distribution and also referred to as Acacia Research - CombiMatrix
      stock.

     

    “CombiMatrix
      Welfare Plans”
mean
      the Welfare Plans maintained by the CombiMatrix Group immediately prior to
      the
      Time of Distribution.

     

    “Distribution”
has
      the
      meaning set forth in the recitals.

     

    “Distribution
      Agreement”
has
      the
      meaning set forth in the recitals.

     

    “ERISA”
means
      the Employee Retirement Income Security Act of 1974, as amended, or any
      successor legislation.

     

    “Former
      Acacia Employee”
means
      any Pre-Distribution Group Employee who is not, immediately after the Time
      of
      Distribution, an Active Acacia Employee or an Active CombiMatrix Employee,
      and
      whose most recent active employment was with the Acacia Group.

     

    “Former
      CombiMatrix Employee”
means
      any Pre-Distribution Group Employee who is not, immediately after the Time
      of
      Distribution, an Active CombiMatrix Employee or an Active Acacia Employee,
      and
      whose most recent active employment was with the CombiMatrix Group.

     

    “Incentive
      Compensation Plan”
means
      any plan providing for bonuses or other incentive compensation other than a
      plan
      that provides for equity compensation (such as stock options). 

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

       

    

    “Liabilities”
has
      the
      meaning set forth in the Distribution Agreement.

     

    “Pre-Distribution
      Group”
has
      the
      meaning set forth in the Distribution Agreement.

     

    “Pre-Distribution
      Group Employee”
means
      any individual who was, at any time prior to the Time of Distribution, employed
      by Acacia, CombiMatrix or any other member of the Pre-Distribution
      Group.

     

    “Separation
      Agreement”
has
      the
      meaning set forth in the Distribution Agreement.

     

    “Subsidiary”
means,
      with respect to any person, any corporation or other organization, whether
      incorporated or unincorporated, of which such person or any Subsidiaries of
      such
      person controls or owns, directly or indirectly, more than 50% of the stock
      or
      other equity interest, or more than 50% of the voting power entitled to vote
      on
      the election of members to the board of directors or similar governing body.
      Notwithstanding the foregoing, the term “Subsidiary” shall also mean, with
      respect to Combimatrix, the following entities: (i) Leuchemix, a California
      corporation, and (ii) CombiMatrix K.K., a Japanese corporation.

     

    “Time
      of Distribution”
means
      the effective date of the Distribution.

     

    “Welfare
      Plan”
means
      an employee welfare benefit plan as defined in Section 3(1) of ERISA,
      including cafeteria, medical, vision, dental and other health plans, retiree
      health plans, life insurance plans, retiree life insurance plans, accidental
      death and dismemberment plans, long-term disability plans and severance pay
      plans, dependent care reimbursement plans, health care reimbursement plans
      and
      any other employee welfare benefit and fringe benefit arrangements.

     

    ARTICLE
      II

     

    EMPLOYEES

     

    Section
      2.01  Employees.

     

    (a)  Each
      individual who is currently employed by a member of the CombiMatrix Group
      immediately prior to the Time of Distribution, including those individuals
      who
      are actively employed or on lay-off, leave, short-term or long-term disability
      or other permitted absence from employment will continue to be employed by
      a
      member of the CombiMatrix Group immediately after the Time of Distribution
      and
      will be an Active CombiMatrix Employee. 

     

    (b)  Each
      individual (other than those employed by the CombiMatrix Group immediately
      prior
      to the Time of Distribution) who is employed by the Acacia Group immediately
      prior to the Time of Distribution (including those who are actively employed
      or
      on lay-off, leave, short-term or long-term disability or other permitted absence
      from employment) will be or will continue to be employed by a member of the
      Acacia Group immediately after the Time of Distribution and will be an Active
      Acacia Employee.

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

       

    

    (c)  Effective
      as of the Time of Distribution, (i) for immigration purposes CombiMatrix
      will be the successor-in-interest to any and all pending or approved visa
      petitions (whether with the U.S. Bureau of Citizenship and Immigration Services
      or U.S. Department of Labor), including pending or completed Labor Condition
      Applications, made by Acacia or any of its Subsidiaries with respect to any
      Active CombiMatrix Employees, and CombiMatrix will adopt and accept all
      representations made by Acacia in any of these petitions and applications,
      (ii) CombiMatrix will adopt any Labor Condition Application included in the
“Public Access Folders” for Active CombiMatrix Employees who have H-1B visas,
      and (iii) CombiMatrix will adopt any existing I-9 certifications of Acacia
      and its Subsidiaries with respect to Active CombiMatrix Employees.

     

    (d)  Nothing
      contained in this Section 2.01 is intended to confer upon any employee of
      the CombiMatrix Group or the Acacia Group any right to continued employment
      after the Time of Distribution.

     

    Section
      2.02    Non-Solicitation
      of Employees.
      Without
      the express written agreement of both the Chief Executive Officer of Acacia
      and
      the Chief Executive Officer of CombiMatrix:

     

    (a)  Acacia
      agrees not to (and to cause the other members of the Acacia Group not to)
      solicit, recruit or hire, directly or indirectly (including by contracting
      with
      or through an independent contractor, consultant or other third party) any
      employee of, or individual providing consulting services to, CombiMatrix or
      any
      other member of the CombiMatrix Group until eighteen (18) months after the
      Time of Distribution or until six (6) months after such employee’s employment
      with, or such individual’s provision of consulting services to, CombiMatrix or
      any other member of the CombiMatrix Group terminates, whichever occurs
      first;

     

    (b)  CombiMatrix
      agrees not to (and to cause the other members of the CombiMatrix Group not
      to)
      solicit, recruit or hire, directly or indirectly (including by contracting
      with
      or through an independent, contractor, consultant or other third party) any
      employee of, or individual providing consulting services to, Acacia or any
      other
      member of the Acacia Group until 18 months after the Time of Distribution or
      until six months after such employee’s employment with, or such individual’s
      provision of consulting services to, Acacia or any other member of the Acacia
      Group terminates, whichever occurs first; and

     

    (c)  Notwithstanding
      the foregoing (but subject to the restriction on hiring), such prohibitions
      on
      solicitation do not restrict general recruitment efforts carried out through
      a
      public or general solicitation.

     

    ARTICLE
      III

     

    SAVINGS
      PLANS

     

    As
      of the
      Time of Distribution, CombiMatrix maintains the CombiMatrix Retirement Savings
      Plan, in which employees of the CombiMatrix Group are eligible to participate.
      As of the Time of Distribution, the Acacia Group maintains the Acacia Retirement
      Savings Plan, in which employees of the Acacia Group are eligible to
      participate. No changes to the current operation of and no transfers between
      the
      CombiMatrix Retirement Savings Plan and the Acacia Retirement Savings Plan
      shall
      be required by this Transaction and both plans shall continue in operation
      in
      accordance with their terms.

     

    
      
        
        

      

      
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    ARTICLE
      IV

     

    OPTIONS

     

    Acacia
      and CombiMatrix will take all action necessary or appropriate so that the
      Distribution will be treated as a “change in control” under each Acacia equity
      compensation plan where options to purchase shares of CombiMatrix Tracking
      Stock
      (each an “Option”)
      are
      outstanding. Each such Option that is outstanding immediately prior to the
      Time
      of Distribution will be fully vested immediately prior to the Time of
      Distribution and contingent upon the Distribution and, except as otherwise
      specified in this paragraph, will terminate at the Time of Distribution. Acacia
      and CombiMatrix will provide written notice to the holders of the Options that
      the Options are vesting fully and terminating at the Time of Distribution.
      To
      the extent that an Option cannot be terminated as of the Time of Distribution
      and for any Option held by a person who is no longer an employee of either
      the
      Acacia Group or the CombiMatrix Group, such Option shall be assumed by the
      CombiMatrix Group at the Time of Distribution (an “Assumed
      Option”)
      and
      will be appropriately and equitably adjusted as the number of shares purchasable
      under such Assumed Option and the per share exercise price for any differences
      in the capitalization of CombiMatrix in comparison with Acacia with respect
      to
      the Acacia-CombiMatrix Stock. Each such Assumed Option will otherwise have
      the
      same terms and conditions as those in effect immediately prior to the
      assumption. 

     

    ARTICLE
      V

     

    OTHER
      EMPLOYEE PLANS AND MATTERS

     

    Section
      5.01  Welfare
      Plans.

     

    (a)  Prior
      to
      the Time of Distribution, Acacia and CombiMatrix will take all action necessary
      or appropriate to create a separate Welfare Plan for each of the CombiMatrix
      Group and the Acacia Group to the extent that the Acacia Group and the
      CombiMatrix Group participate in or sponsor the same Welfare Plan as of the
      date
      of this Agreement.

     

    (b)  As
      of the
      Time of Distribution, CombiMatrix will maintain Welfare Plans and other employee
      welfare benefit and fringe benefit arrangements (collectively, “CombiMatrix
      Welfare Plans”)
      for
      CombiMatrix Participants. As of the Time of Distribution, the Acacia Group
      will
      maintain Welfare Plans and other employee welfare benefit and fringe benefit
      arrangements (collectively, “Acacia
      Welfare Plans”)
      for
      Acacia Participants. Except as provided in Section 5.01(a), no changes to the
      operation of the CombiMatrix Welfare Plans and the Acacia Welfare Plans shall
      be
      required in connection with the Distribution and the CombiMatrix Welfare Plans
      and the Acacia Welfare Plans shall continue in operation in accordance with
      their terms. 

     

    (c)  As
      of the
      Time of Distribution, CombiMatrix (and, if appropriate, the correct member
      of
      the CombiMatrix Group) will have established, and will cover Active CombiMatrix
      Employees under, policies relating to vacation days and personal and sick days.
      As of the Time of Distribution, CombiMatrix (and, if appropriate, the correct
      member of the CombiMatrix Group) will credit each Active CombiMatrix Employee
      with the unused vacation days and personal and sick days accrued by such
      employee through the Time of Distribution in accordance with the policies
      relating to vacation days and personal and sick days applicable to such employee
      in effect immediately prior to the Time of Distribution.

     

    
      
        
        

      

      
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    (d)  From
      and
      after the Time of Distribution, except as specifically set forth in Section
      5.06, CombiMatrix (and, if applicable, the appropriate member of the CombiMatrix
      Group) hereby assume or retain, as applicable, and will be solely responsible
      for and will fully perform, pay and discharge, all Liabilities of the Acacia
      Group and the CombiMatrix Group with respect to CombiMatrix Participants (and
      claims by or relating to CombiMatrix Participants) with respect to Welfare
      Plans
      and other employee welfare and fringe benefits arrangements (including, but
      not
      limited to, medical, dental, life, travel, accident, short- and long-term
      disability, hospitalization, workers’ compensation and other insurance
      benefits), whether under the Acacia Welfare Plans, the CombiMatrix Welfare
      Plans
      or otherwise, whether incurred, or arising in connection with incidents
      occurring, before, at or after the Time of Distribution and whether any claim
      is
      made with respect thereto before, at or after the Time of
      Distribution.

     

    (e)  From
      and
      after the Time of Distribution, except as specifically set forth in this
      Agreement, Acacia hereby assumes or retains, as applicable, and will be solely
      responsible for and will fully perform, pay and discharge, all Liabilities
      of
      Acacia (including those received by members of the CombiMatrix Group) in respect
      of Acacia Participants (and claims by or relating to Acacia Participants) with
      respect to Welfare Plans and other employee welfare and fringe benefits
      arrangements (including, but not limited to, medical, dental, life, travel,
      accident, short- and long-term disability, hospitalization, workers’
compensation and other insurance benefits), whether under the Acacia Welfare
      Plans or otherwise, whether incurred, or arising in connection with incidents
      occurring, before, at or after the Time of Distribution and whether any claim
      is
      made with respect thereto before, at or after the Time of
      Distribution.

     

    (f)  Acacia
      and CombiMatrix acknowledge and agree that neither party has any retiree welfare
      plans.

     

    Section
      5.02  Incentive
      Compensation Plans.
      

     

    (a)  From
      and
      after the Time of Distribution, except as specifically set forth in this
      Agreement, Acacia hereby assumes or retains, as applicable, and will be solely
      responsible for and will fully perform, pay and discharge, all Liabilities
      of
      Acacia (including those received by members of the CombiMatrix Group) in respect
      of Acacia Participants (and claims by or relating to Acacia Participants) with
      respect to all Incentive Compensation Plans, whether incurred, or arising in
      connection with incidents occurring, before, at or after the Time of
      Distribution and whether any claim is made with respect thereto before, at
      or
      after the Time of Distribution.

     

    (b)  From
      and
      after the Time of Distribution, except as specifically set forth in this
      Agreement, CombiMatrix hereby assumes or retains, as applicable, and will be
      solely responsible for and will fully perform, pay and discharge, all
      Liabilities of CombiMatrix (including those received by members of the Acacia
      Group) in respect of CombiMatrix Participants (and claims by or relating to
      CombiMatrix Participants) with respect to all Incentive Compensation Plans,
      whether incurred, or arising in connection with incidents occurring, before,
      at
      or after the Time of Distribution and whether any claim is made with respect
      thereto before, at or after the Time of Distribution.

     

    
      
        
        

      

      
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    Section
      5.03  Deferred
      Compensation Plans.
      Acacia
      and CombiMatrix acknowledge and agree that neither party has any nonqualified
      deferred compensation plans.

     

    Section
      5.04  Severance
      Pay.

     

    (a)  Acacia
      and CombiMatrix acknowledge and agree that (i) the transactions
      contemplated by the Separation Agreements will not constitute a severance of
      employment of any employee of Acacia Group or the CombiMatrix Group prior to
      or
      as a result thereof and (ii) individuals who, in connection with the
      Distribution, become Active Acacia Employees or Active CombiMatrix Employees
      pursuant to this Agreement will not be deemed to have experienced a termination,
      layoff or severance of employment from the Acacia Group or the CombiMatrix
      Group, in each case for purposes of any policy, plan, program or agreement
      of
      Acacia Group or the CombiMatrix Group that provides for the payment of
      severance, salary continuation or similar benefits.

     

    (b)  CombiMatrix
      and the CombiMatrix Subsidiaries hereby assume or retain, as applicable, and
      will be solely responsible for and will fully perform, pay and discharge, all
      Liabilities of the Acacia Group and the CombiMatrix Group in connection with
      claims made by or on behalf of CombiMatrix Participants in respect of severance
      pay, salary continuation and similar obligations relating to the termination
      or
      alleged termination (whether voluntary or involuntary) of any such person’s
      employment, whether such termination or alleged termination occurred before,
      at
      or after the Time of Distribution and whether any claim is made with respect
      thereto before, at or after the Time of Distribution (whether or not such claim
      is based on any severance policy, agreement, arrangement or program which may
      exist or arise under any employment, collective bargaining or other agreement
      or
      under any federal, state, local, provincial or foreign law).

     

    (c)  Acacia
      and the Acacia Subsidiaries hereby assume or retain, as applicable, and will
      be
      solely responsible for and will fully perform, pay and discharge, all
      Liabilities of the Acacia Group and the CombiMatrix Group in connection with
      claims made by or on behalf of Acacia Participants in respect of severance
      pay,
      salary continuation and similar obligations relating to the termination or
      alleged termination (whether voluntary or involuntary) of any such person’s
      employment, whether such termination or alleged termination occurred before,
      at
      or after the Time of Distribution and whether any claim is made with respect
      thereto before, at or after the Time of Distribution (whether or not such claim
      is based on any severance policy, agreement, arrangement or program which may
      exist or arise under any employment, collective bargaining or other agreement
      or
      under any federal, state, local, provincial or foreign law).

     

    Section
      5.05  Employment,
      Consulting and Other Employee Related Agreements.

     

    (a)  Effective
      as of the Time of Distribution, CombiMatrix and the Combimatrix Subsidiaries
      hereby assume or retain, as applicable, and will be solely responsible for
      and
      will fully perform, pay and discharge, all Liabilities of the Acacia Group
      and
      the CombiMatrix Group relating to all CombiMatrix service providers under their
      respective employment, consulting, separation, arbitration and other employee
      related agreements with any member of the Pre-Distribution Group, as the same
      are in effect immediately prior to the Time of Distribution.

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

       

    

    (b)  Effective
      as of the Time of Distribution, Acacia and the Acacia Subsidiaries hereby assume
      or retain, as applicable, and will be solely responsible for and will fully
      perform, pay and discharge, all Liabilities of the Acacia Group and the
      CombiMatrix Group relating to all Acacia service providers under their
      respective employment, consulting, separation, arbitration and other employee
      related agreements with any member of the Pre-Distribution Group, as the same
      are in effect immediately prior to the Time of Distribution.

     

    Section
      5.06     Workers
      Compensation.
      Acacia
      and CombiMatrix acknowledge and agree that (i) CombiMatrix has not paid prior
      to
      the Time of Distribution and will not pay after the Time of Distribution any
      costs of workers’ compensation coverage for any Acacia Participants and (ii) to
      the extent that Acacia pays the costs for workers’ compensation coverage
      (whether through insurance or self-insurance) after the Time of Distribution
      for
      any CombiMatrix Participant, CombiMatrix shall reimburse Acacia (on a monthly
      basis after submission to CombiMatrix of a statement of costs by Acacia) for
      all
      costs of workers’ compensation coverage that are paid by Acacia after the Time
      of Distribution for the CombiMatrix Participants. The determination of the
      costs
      shall be mutually agreed to by the parties based on the relevant costs,
      including, but not limited to any premiums paid, the rate of return foregone
      on
      any cash deposits and the cost of any payments made for workers’ compensation
      claims. Both parties agree to cooperate to transfer the responsibility for
      any
      workers’ compensation coverage for CombiMatrix Participants that is provided by
      Acacia to CombiMatrix within a reasonable period of time after the Time of
      Distribution, but in no event later than January 1, 2008. 

     

    Section
      5.07  Other
      Liabilities.

     

    (a)  From
      and
      after the Time of Distribution, except as specifically set forth in this
      Agreement, CombiMatrix and the Combimatrix Subsidiaries hereby assume or retain,
      as applicable, and will be solely responsible for and will fully perform, pay
      and discharge, all Liabilities of the Acacia Group and the CombiMatrix Group
      arising out of or relating to the employment of CombiMatrix service providers
      by
      any member of the Pre-Distribution Group, whether pursuant to benefit plans
      or
      otherwise and whether such Liabilities arose before, at or after the Time of
      Distribution or any claim is made with respect thereto before, at or after
      the
      Time of Distribution.

     

    (b)  From
      and
      after the Time of Distribution, except as specifically set forth in this
      Agreement, Acacia and the Acacia Subsidiaries hereby assumes or retains, as
      applicable, and will be solely responsible for and will fully perform, pay
      and
      discharge, all Liabilities of the Acacia Group and the CombiMatrix Group arising
      out of or relating to employment of Acacia service providers by any member
      of
      the Pre-Distribution Group, whether pursuant to benefit plans or otherwise
      and
      whether such Liabilities arose before, at or after the Time of Distribution
      or
      any claim is made with respect thereto before, at or after the Time of
      Distribution.

     

    
      
        
        

      

      
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    ARTICLE
      VI

     

    MISCELLANEOUS

     

    Section
      6.01  Indemnification.
      All
      Liabilities retained or assumed by or allocated to CombiMatrix or any member
      of
      the CombiMatrix Group pursuant to this Agreement will be deemed to be solely
      the
      Liabilities of CombiMatrix, and all Liabilities retained or assumed by or
      allocated to Acacia or any or any member of the Acacia Group pursuant to this
      Agreement will be deemed to be solely the Liabilities of Acacia, and, in each
      case, will be subject to the indemnification provisions set forth in
      Article IV of the Distribution Agreement.

     

    Section
      6.02  Sharing
      of Information.
      Acacia
      and CombiMatrix will, and will cause each of the respective members of their
      groups to, provide to the other all such information in its possession as the
      other may reasonably request to enable the requesting party to administer its
      employee benefit plans and programs, and to determine the scope of, and fulfill,
      its obligations under this Agreement. Such information will, to the extent
      reasonably practicable, be provided in the format and at the times and places
      requested, but in no event will the party providing such information be
      obligated to incur any direct expense not reimbursed by the party making such
      request, nor to make such information available outside its normal business
      hours and premises. The right of the parties to receive information hereunder
      will, without limiting the generality of the foregoing, extend to any and all
      reports, and the data underlying such reports. Any information shared or
      exchanged pursuant to this Agreement will be subject to the confidentiality
      requirements set forth in the Distribution Agreement.

     

    Section
      6.03  Entire
      Agreement; Construction.
      This
      Agreement, the Distribution Agreement, any other Separation Agreements,
      including any annexes, schedules and exhibits hereto or thereto, and other
      agreements and documents referred to herein and therein, will together
      constitute the entire agreement between the parties with respect to the subject
      matter hereof and thereof and will supersede all prior negotiations, agreements
      and understandings of the parties of any nature, whether oral or written, with
      respect to such subject matter. Notwithstanding any other provisions in any
      other agreements to the contrary, in the event and to the extent that there
      is a
      conflict between the provisions of this Agreement and the provisions of the
      Distribution Agreement, the provisions of this Agreement will
      control.

     

    Section
      6.04  Survival
      of Agreements.
      Except
      as otherwise contemplated by the Separation Agreements, all covenants and
      agreements of the parties contained in this Agreement will remain in full force
      and effect and survive the Time of Distribution.

     

    Section
      6.05  Governing
      Law.
      This
      Agreement will be governed by and construed in accordance with the internal
      laws
      of the State of Delaware applicable to contracts made and to be performed
      entirely within such State, without regard to the conflicts of law principles
      of
      such State.

     

    
      
        
        

      

      
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    Section
      6.06  Notices.
      All
      notices, requests, claims, demands and other communications required or
      permitted to be given hereunder will be in writing and will be delivered by
      hand
      or telecopied, e-mailed or sent, postage prepaid, by registered, certified
      or
      express mail or reputable overnight courier service and will be deemed given
      when so delivered by hand or telecopied, when e-mail confirmation is received
      if
      delivered by e-mail, or three (3) business days after being so mailed (one
      (1)
      business day in the case of express mail or overnight courier service). All
      such
      notices, requests, claims, demands and other communications will be addressed
      as
      set forth in Section 7.04 of the Distribution Agreement, or pursuant to such
      other instructions as may be designated in writing by the party to receive
      such
      notice.

     

    Section
      6.07  Amendments.
      This
      Agreement cannot be amended, modified or supplemented except by a written
      agreement executed by Acacia and CombiMatrix.

     

    Section
      6.08  Assignment.
      Except
      as otherwise provided herein, neither party to this Agreement will convey,
      assign or otherwise transfer any of its rights or obligations under this
      Agreement without the prior written consent of the other party in its sole
      and
      absolute discretion. Notwithstanding the foregoing, either party may (without
      obtaining any consent) assign all or any portion of its rights and obligations
      hereunder to (i) the surviving entity resulting from a merger or
      consolidation involving such party, (ii) the acquiring entity in a sale or
      other disposition of all or substantially all of the assets of such party as
      a
      whole or of any line of business or division of such party, or (iii) any
      other person that is created as a result of a spin-off from, or similar
      reorganization transaction of; such party or any line of business or division
      of
      such party. In the event of an assignment pursuant to (ii) or (iii) above,
      the
      nonassigning party shall, at the assigning party’s request, use good faith
      commercially reasonable efforts to enter into separate agreements with each
      of
      the resulting entities and take such further actions as may be reasonably
      required to assure that the rights and obligations under this Agreement are
      preserved, in the aggregate, and divided equitably between such resulting
      entities. Any conveyance, assignment or transfer requiring the prior written
      consent of another party pursuant to this Section 6.08 which is made
      without such consent will be void ab initio.
      No
      assignment of this Agreement will relieve the assigning party of its obligations
      hereunder.

     

    Section
      6.09  Captions;
      Currency.
      The
      article, section and paragraph captions herein and the table of contents hereto
      are for convenience of reference only, do not constitute part of this Agreement
      and will not be deemed to limit or otherwise affect any of the provisions
      hereof. Unless otherwise specified, all references herein to numbered articles
      or sections are to articles and sections of this Agreement and all references
      herein to schedules are to schedules to this Agreement. Unless otherwise
      specified, all references contained in this Agreement, in any schedule referred
      to herein or in any instrument or document delivered pursuant hereto to dollars
      or $ will mean United States Dollars.

     

    Section
      6.10  Severability.
      If any
      provision of this Agreement or the application thereof to any person or
      circumstance is determined by a court of competent jurisdiction to be invalid,
      void or unenforceable, the remaining provisions hereof; or the application
      of
      such provision to persons or circumstances other than those as to which it
      has
      been held invalid or unenforceable, will remain in full force and effect and
      will in no way be affected, impaired or invalidated thereby. If the economic
      or
      legal substance of the transactions contemplated hereby is affected in any
      manner adverse to any party as a result thereof; the parties will negotiate
      in
      good faith in an effort to agree upon a suitable and equitable substitute
      provision to effect the original intent of the parties.

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

       

    

    Section
      6.11  Parties
      in Interest.
      This
      Agreement is binding upon and is for the benefit of the parties hereto and
      their
      respective successors and permitted assigns. This Agreement is not made for
      the
      benefit of any person not a party hereto, and no person other than the parties
      hereto or their respective successors and permitted assigns will acquire or
      have
      any benefit, right, remedy or claim under or by reason of this Agreement. No
      provision of this Agreement will be construed (a) to limit the right of
      Acacia, any member of the Acacia Group, CombiMatrix or any member of the
      CombiMatrix Group to amend any plan or terminate their plans, or (b) to
      create any right or entitlement whatsoever in any employee, former employee
      or
      beneficiary including a right to continued employment or to any benefit under
      a
      plan or any other benefit or compensation.

     

    Section
      6.12  Schedules.
      All
      schedules attached hereto are hereby incorporated in and made a part of this
      Agreement as if set forth in full herein. Capitalized terms used in the
      schedules hereto but not otherwise defined therein will have the respective
      meanings assigned to such terms in this Agreement.

     

    Section
      6.13  Termination.
      This
      Agreement may be terminated at any time prior to the Time of Distribution by
      and
      in the sole discretion of the Acacia Board of Directors without the approval
      of
      CombiMatrix or Acacia’s stockholders. In the event of any such termination,
      neither party will have any liability of any kind to the other party on account
      of such termination. This Agreement may not be terminated after the Time of
      Distribution.

     

    Section
      6.14  Change
      of Name.
      On or
      promptly after the Time of Distribution, CombiMatrix will take such actions
      as
      may be required to change the names of all employee benefit plans sponsored
      or
      maintained by CombiMatrix or any member of the CombiMatrix Group to eliminate
      therefrom any reference to “Acacia”, “Acacia Research”, “Acacia Technologies” or
      any derivative thereof.

     

    Section
      6.15  Waivers;
      Remedies.
      No
      failure or delay on the part of either Acacia or CombiMatrix in exercising
      any
      right, power or privilege hereunder will operate as a waiver thereof; nor will
      any waiver on the part of either Acacia or CombiMatrix of any right, power
      or
      privilege hereunder operate as a waiver of any other right, power or privilege
      hereunder, nor will any single or partial exercise of any right, power or
      privilege hereunder preclude any other or further exercise thereof or the
      exercise of any other right, power or privilege hereunder. Subject to
      Section 6.18, the rights and remedies herein provided are cumulative and
      are not exclusive of any rights or remedies which the parties may otherwise
      have
      at law or in equity.

     

    Section
      6.16  Counterparts.
      This
      Agreement may be executed in separate counterparts, each such counterpart being
      deemed to be an original instrument, and all such counterparts will together
      constitute the same agreement. This Agreement may be executed and delivered
      by
      telecopier with the same force and effect as if it were a manually executed
      and
      delivered counterpart.

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

       

    

    Section
      6.17  Performance.
      Acacia
      will cause to be performed and hereby guarantees the performance of all actions,
      agreements and obligations set forth herein to be performed by any member of
      the
      Acacia Group. CombiMatrix will cause to be performed and hereby guarantees
      the
      performance of all actions, agreements and obligations set forth herein to
      be
      performed by any member of the CombiMatrix Group.

     

    Section
      6.18  Dispute
      Resolution.
      Any
      dispute, claim or controversy arising out of or relating to any provision of
      this Agreement or the breach, performance or validity thereof will be resolved
      in accordance with the procedures set forth in Section 7.05 of the
      Distribution Agreement.

     

    Section
      6.19  Cooperation.
      Acacia
      and CombiMatrix will cooperate in taking all such action as may be necessary
      or
      appropriate to implement the provisions of this Agreement, including making
      all
      appropriate filings as may be required under ERISA or the Internal Revenue
      Code
      of 1986, as amended, the regulations thereunder and any other applicable laws,
      exchanging and sharing all appropriate records, amending plan, trust, record
      keeping and other related documents and implementing all appropriate
      communications with participants.

     

    Section
      6.20  Interpretation.
      Any
      reference herein to any federal, state, local or foreign law shall be deemed
      also to refer to all rules and regulations promulgated thereunder, unless the
      context requires otherwise. For the purposes of this Agreement, (i) words
      in the singular shall be held to include the plural and vice versa
      and
      words of one gender shall be held to include the other gender as the context
      requires, (ii) the terms “hereof”, “herein”, and “herewith” and words of
      similar import shall, unless otherwise stated, be construed to refer to this
      Agreement as a whole and not to any particular provision of this Agreement,
      (iii) the word “including” and words of similar import when used in this
      Agreement shall mean “including, without limitation” and (iv) all
      references to any plan shall be deemed to include any amendments
      thereto.

     

     

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    IN
      WITNESS WHEREOF, this Agreement has been duly executed and delivered by the
      duly
      authorized officers of the parties as of the date first hereinabove
      written.

     

    
      	 	
              ACACIA
                RESEARCH CORPORATION

               

               

              By:____________________________________________  

                    
                Name: 

                  
Title: 

               

            
	 	
              COMBIMATRIX
                CORPORATION

               

               

              
                By:____________________________________________  

                       
Name: 

                     
Title: 

              

            

    

    

    

    

    

    [Signature
      Page to Employee Matters Agreement

     

    13

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