Document:

Exhibit 10.3

 

STOCK PLEDGE AGREEMENT

 

This STOCK PLEDGE AGREEMENT
(this “Agreement”), dated as of June 30, 2020, Acacia Research Group LLC, a Delaware limited liability
company, Advanced Skeletal Innovations LLC, a Texas limited liability company and Saint Lawrence Communications LLC,
a Texas limited liability company (the foregoing entities together with each other Person that executes a joinder and becomes a
“Grantor” hereunder, each a “Pledgor” and, collectively, the “Pledgors”), in
favor of Starboard Value Intermediate Fund LP, in its capacity as collateral agent (in such capacity, the “Collateral
Agent”) for the Holders.

 

WHEREAS, Acacia Research
Corporation, a Delaware corporation (the “Company”), and each party listed as a “Buyer” on the Schedule
of Buyers attached thereto (as such schedule may be amended, restated or otherwise modified from time to time, each a “Buyer”,
and collectively, the “Buyers”) are parties to the Securities Purchase Agreement, dated as of November 18, 2019
(as amended, restated or otherwise modified from time to time, the “Securities Purchase Agreement”), pursuant
to which, among other things, certain Buyers purchased from the Company certain senior secured notes issued on June 4, 2020 (as
such senior secured notes were amended, restated, replaced, exchanged or otherwise modified from time to time on or prior to the
date of the Exchange Agreement, the "June 4 Notes");

 

WHEREAS, pursuant to
that certain Exchange Agreement, dated as of the date hereof (as amended, restated, amended and restated, supplemented or otherwise
modified from time to time, the “Exchange Agreement”), by and between the Company, Merton Acquisition HoldCo
LLC, a Delaware limited liability company (“Merton”), and Starboard Value LP, each of the June 4 Notes shall
be exchanged and replaced in their entirety by new notes (as amended, restated, amended and restated, supplemented or otherwise
modified from time to time, the “Notes”) issued by Merton in favor of each of the Holders, in the original aggregate
principal amount of $115,000,000, to the same Starboard Funds and in the same respective amounts as the June 4 Notes;

 

WHEREAS, each Holder
(collectively, the “Holders”) has requested and the Pledgors have agreed, that in connection with the Holders
extending credit evidenced by the Notes, the Pledgors execute and deliver to the Collateral Agent this Agreement providing for
the grant to the Collateral Agent, for the benefit of the Holders, of a security interest in the Collateral described below;

 

WHEREAS, each Pledgor
is part of an integrated operation that reports on a consolidated basis and, at times, a Pledgor may receive credit provided through
financing obtained by another Pledgor or Transaction Party; and

 

WHEREAS, each Pledgor
has determined that the execution, delivery and performance of this Agreement directly benefit, and are in the best interests of
the Pledgors.

 

NOW, THEREFORE, in consideration
of the above premises and the agreements herein and for other consideration, the sufficiency of which is hereby acknowledged, each
Grantor agrees with the Collateral Agent, for the benefit of the Holders, as follows:

 

 

 

 

 

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1.                  
Definitions.

 

(a)               
Reference is hereby made to the Securities Purchase Agreement and the Notes for a statement of the terms thereof.
All terms used in this Agreement and the recitals hereto which are defined in the Securities Purchase Agreement, the Notes or in
Articles 8 or 9 of the Uniform Commercial Code (the “UCC”) as in effect from time to time in the State of New
York, and which are not otherwise defined herein shall have the same meanings herein as set forth therein, as applicable; provided
that terms used herein which are defined in the UCC as in effect in the State of New York on the date hereof shall continue to
have the same meaning notwithstanding any replacement or amendment of such statute except as the Collateral Agent may otherwise
determine. Words used herein, regardless of the number and gender specifically used, shall be deemed and construed to include any
other number, singular or plural, and any other gender, masculine, feminine or neuter, as the context indicates is appropriate.
When a reference is made in this Agreement to an Appendix, Exhibit, Introduction, Recital, Section or Schedule, such reference
shall be to an Appendix, an Exhibit, the Introduction, a Recital or a Section of, or a Schedule to, this Agreement unless otherwise
indicated. Whenever the words “include,” “includes” or “including” are used in this Agreement,
they shall be deemed to be followed by the words “without limitation.”

 

(b)               
The following terms shall have the respective meanings provided for in the UCC: “Cash Proceeds”, “Instruments”,
“Investment Property”, “Noncash Proceeds”, “Proceeds”, “Promissory Notes”, and
“Securities Account”.

 

(c)               
As used in this Agreement, the following terms shall have the respective meanings indicated below, such meanings
to be applicable equally to both the singular and plural forms of such terms:

 

“Collateral”
has the meaning set forth in Section 2.

 

“Control
Agreement” means a Securities Account Control Agreement, to be entered into by and among the applicable Pledgor, the
Collateral Agent and Securities Intermediary pursuant to which the Collateral Agent will have “control” (as defined
in Articles 8 and 9 of the applicable Uniform Commercial Code) over that part of the Collateral that is Investment Property (as
defined in Article 9 of the Uniform Commercial Code).

 

“Note
Transaction Documents” means the Securities Purchase Agreement, the Notes and the Security Documents.

 

“Obligations”
means all “Obligations” as defined in the Notes, whether due or to become due, and whether now existing or hereafter
arising or incurred.

 

“Pledged
Shares” means (a) the shares of capital stock or other Equity Interests described in Schedule I hereto, whether or not
evidenced or represented by any stock certificate, certificated security or other Instrument, issued by the Persons described in
such Schedule I (the “Existing Issuers”), (b) the shares of capital stock or other Equity Interests at any time
and from time to time acquired by a Pledgor of any and all Persons now or hereafter existing (such Persons, together with the Existing
Issuers, being hereinafter referred to collectively as the “Pledged Issuers” and each individually as a “Pledged
Issuer”), whether or not evidenced or represented by any stock certificate, certificated security or other Instrument,
and (c) the certificates representing such shares of capital stock, all options and other rights, contractual or otherwise, in
respect thereof and all dividends, distributions, cash, Instruments, Investment Property, financial assets, securities, capital
stock, other Equity Interests, stock options and commodity contracts, notes, debentures, bonds, Promissory Notes or other evidences
of indebtedness and all other property (including, without limitation, any stock dividend and any distribution in connection with
a stock split) from time to time received, receivable or otherwise distributed in respect of or in exchange for any or all of such
Equity Interests.

 

 

 

 

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“Securities
Account” means a securities account in the name of the applicable Pledgor maintained at a Securities Intermediary.

 

“Securities
Intermediary” means a nationally recognized “securities intermediary” (as defined in Article 8 of the UCC)
mutually agreed upon by the applicable Pledgor and the Collateral Agent that will maintain the Securities Account and be a party
to the Control Agreement.

 

2.                  
Non-Recourse Pledge. Subject to Section 16 hereof, each Pledgor hereby agrees that such Pledgor is jointly
and severally liable for, and absolutely and unconditionally guarantees to Holders on a non-recourse basis as set forth in Section
16 hereof, the prompt payment and performance when due, whether at stated maturity, upon acceleration or otherwise, and at all
times thereafter, all of the Obligations. To secure such guaranty and the payment and performance of the Obligations, each Pledgor
hereby pledges to Holders and grants to Holders, a security interest in, any and all right, title and interest in and to the following
(the "Collateral"):

 

(a)               
the Pledged Shares;

 

(b)               
all Proceeds, securities, moneys or property representing dividends or interest paid on any of the Pledged Shares,
or representing a distribution in respect of the Pledged Shares, or resulting from a split-up, stock split, revision, reclassification,
merger, consolidation, reorganization or other like change of the Pledged Shares or otherwise received in exchange therefor, and
any subscription warrants, rights or options issued to the holders of, or otherwise in respect of, the Pledged Shares; and

 

(c)               
all equity interests or other property now owned or hereafter acquired by such Pledgor in exchange for or related
to the Pledged Shares, exchange offers, conversions, recapitalizations of any type, contributions to capital, warrants, options
or other rights relating to the Pledged Shares.

 

3.                  
[Reserved]

 

4.                  
Perfection of Security Interest; Authority to File.

 

(a)               
The Pledgors shall, from time to time, as may be required by the Collateral Agent with respect to all Collateral,
immediately take all actions as may be reasonably requested by the Collateral Agent to perfect the security interest of the Collateral
Agent in the Collateral, including, without limitation, any actions in order to establish or maintain control with respect to all
Collateral over which control may be obtained within the meaning of Section 8-106 of the UCC. All of the foregoing shall be at
the sole cost and expense of the Pledgors.

 

(b)               
The Pledgors hereby irrevocably authorize the Collateral Agent at any time and from time to time to file in any relevant
jurisdiction any financing statements and amendments thereto that contain the information required by Article 9 of the UCC of each
applicable jurisdiction for the filing of any financing statement or amendment relating to the Collateral, without the signature
of any Pledgor where permitted by law and without referencing any restrictions on the Pledged Shares as of the date hereof. The
Pledgors agree to provide all information required by the Collateral Agent pursuant to this Section promptly to the Collateral
Agent upon request.

 

 

 

 

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(c)               
If and when the Pledged Shares are certificated, each Pledgor agrees (in its sole discretion) to (i) promptly deliver
the share certificates to the Collateral Agent for the possession by the Collateral Agent thereof in the State of New York, together
with executed undated stock powers and assignments in blank, or (ii) promptly establish a Securities Account with a Securities
Intermediary promptly following the parties’ decision as to the agreed upon Securities Intermediary. Promptly following the
establishment of the Securities Account, each Pledgor will deliver the Pledged Shares, along with executed assignments in blank,
to the Securities Intermediary for deposit into the Securities Account. If applicable, each Pledgor agrees to do all things necessary
to ensure that the Control Agreement is executed and delivered by all parties thereto within 30 Business Days from the date the
Pledged Shares are certificated by Issuer. Collateral Agent agrees to instruct the Securities Intermediary to take all actions
required to accomplish the intent of this Agreement.

 

(d)               
If the Pledged Shares are uncertificated securities registered in a Pledgor’s name on Issuer’s books
and records, upon Collateral Agent’s request, such Pledgor will do all things necessary, including entering into this Agreement
and any other agreement reasonably necessary so that the Collateral Agent will have “control” (as defined in Articles
8 and 9 of the applicable UCC) over the Pledged Shares.

 

5.                  
Representations and Warranties. Each Pledgor represents and warrants as follows:

 

(a)               
The Pledged Shares have been duly authorized and validly issued, and are fully paid and non-assessable and subject
to no options to purchase or similar rights. All information set forth in Schedule 1 attached hereto relating to the Pledged Shares
is accurate and complete.

 

(b)               
No authorization or approval or other action by, and no notice to or filing with, any governmental authority or other
regulatory body, or any other Person, is required for (i) the grant by such Pledgor, or the perfection, of the security interest
purported to be created hereby in the Collateral, (ii) the exercise by the Collateral Agent of any of its rights and remedies
hereunder, or (iii) the exercise by the Collateral Agent of any of its rights and remedies hereunder, other than (A) those
that have been obtained or will be obtained and/or made and filings and recordings with respect to Collateral to be made, or otherwise
delivered to the Collateral Agent for filing or recordation, on or contemporaneously with the Issuance Date, (B) any immaterial
authorization, approval, other action or notice of filing and (C) solely in the case of this clause (iii), except as may be required
in connection with any sale of any Pledged Shares by laws affecting the offering and sale of securities generally. No authorization
or approval or other action by, and no notice to or filing with, any governmental authority or any other Person, is required for
the perfection of the security interest purported to be created hereby in the Collateral, except (A) filings pursuant to the
UCC in the office of the Secretary of State (or equivalent filing office) of the relevant State(s) of the respective jurisdictions
of organization of the Pledgors, (B) delivery of Collateral consisting of certificates (if any) evidencing Equity Interests
required to be pledged hereunder, and (C) entering into Control Agreements with respect to any Collateral which is certificated
(subclauses (A) -- (C), each a “Perfection Requirement” and collectively, the “Perfection
Requirements”). Notwithstanding anything to the contrary contained herein, no Perfection Requirement shall be required
to be undertaken with respect to the laws of any non-U.S. jurisdiction to create or perfect a security interest in the Collateral
(and no security agreements or pledge agreements governed by the laws of any non-U.S. jurisdiction shall be required in respect
of such assets) to the extent (i) it would reasonably be expected to cause any material adverse tax consequences to any Transaction
Party or Pledgor or (ii) the Collateral Agent and the Transaction Parties reasonably determine that the cost of creating or perfecting
such security interest is excessive in relation to the benefits to the Collateral Agent and the Holders therefrom.

 

(c)               
This Agreement creates in favor of the Collateral Agent a legal, valid and enforceable security interest in the Collateral
secured thereby, as security for the Obligations, except as may be limited by (i) applicable bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting the enforcement of creditors’ rights generally and by general principles of equity
or (ii) the laws of any non-U.S. jurisdiction. The compliance with the Perfection Requirements will result in the perfection of
such security interests. Such security interests in the Collateral are, or in the case of Collateral in which such Pledgor obtains
rights after the date hereof, will be, perfected, first priority security interests, subject only to Permitted Liens and the recording
of such instruments of assignment. Such Perfection Requirements and all other action necessary or desirable to perfect and protect
such security interest have been duly made or taken, except for (i) the other filings and recordations and actions described in
Section 5(b) hereof and (iii) any other Perfection Requirements that the Collateral Agent agrees may be made or taken after
the date of this Agreement.

 

 

 

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(d)               
[Reserved]

 

(e)               
There is no pending or written notice threatening any action, suit, proceeding or claim adversely affecting such
Pledgor before any governmental authority or any arbitrator, or any order, judgment or award by any governmental authority or arbitrator,
that may adversely affect the grant by such Pledgor, or the perfection, of the security interest purported to be created hereby
in the Collateral, or the exercise by the Collateral Agent of any of its rights or remedies hereunder.

 

(f)                
Except with the respect to the laws of any non-U.S. jurisdiction, the exercise by the Collateral Agent of any of
its rights and remedies hereunder will not contravene any law or any contractual restriction binding on or otherwise affecting
such Pledgor or any of its properties and will not result in or require the creation of any Lien, upon or with respect to any of
its properties (other than as set forth in this Agreement or a Permitted Lien).

 

(g)               
 Such Pledgor has title to the Pledged Shares of such Pledgor (as set forth on Schedule I) and will have title to
each other item of Collateral hereafter acquired by such Pledgor, free of all Liens except the security interest of the Collateral
Agent and Permitted Liens. No financing statement covering all or any part of the Collateral is on file in any public office (except
for any financing statements filed by the Collateral Agent). Without limiting the foregoing, all certificates, agreements or instruments
representing or evidencing the Pledged Shares in existence on the date hereof have been delivered to the Collateral Agent in suitable
form for transfer by delivery or accompanied by duly executed instruments of transfer or assignment in blank.

 

6.                  
Dividends and Voting Rights.

 

(a)               
So long as no Event of Default has occurred and is continuing, each Pledgor shall be entitled to vote or consent
with respect to the Pledged Shares in any manner so long as such vote or consent is not inconsistent with this Agreement or not
materially adverse to the Collateral Agent. Upon the occurrence and during the continuance of an Event of Default, the Collateral
Agent shall, after providing written notice to such Pledgor, have the exclusive right to vote or give consents with respect to
the Pledged Shares. Each Pledgor hereby grants to the Collateral Agent an irrevocable proxy to vote the Pledged Shares, which proxy
shall be effective immediately upon the occurrence of and during the continuance of an Event of Default, and, upon request of the
Collateral Agent, such Pledgor agrees to deliver to the Collateral Agent such further evidence of such irrevocable proxy or such
further irrevocable proxy to vote the Pledged Shares as the Collateral Agent may request.

 

(b)               
The Collateral Agent agrees that each Pledgor may, unless an Event of Default shall have occurred and be continuing,
receive and retain all cash dividends and other distributions with respect to the Pledged Shares.

 

7.                  
Further Assurances.

 

(a)               
Each Pledgor shall, use its commercially reasonable efforts to defend title to and ownership of the Collateral of
such Pledgor at its own reasonable cost and expense against the claims and demands of all other parties claiming an interest therein.

 

(b)               
Each Pledgor agrees that at any time and from time to time, at the expense of such Pledgor, such Pledgor will promptly
execute and deliver all further instruments and documents, obtain such agreements from third parties, and take all further action,
that may be necessary or desirable, or that the Collateral Agent may request, in order to create and/or maintain the validity,
perfection or priority of and protect any security interest granted or purported to be granted hereby or to enable the Collateral
Agent to exercise and enforce its rights and remedies hereunder or under any other agreement with respect to any Collateral.

 

 

 

 

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(c)               
Each Pledgor will give the Collateral Agent prompt written notice of any change to its legal name, identity, type
of organization, jurisdiction of organization, corporate structure, location of its chief executive office or its principal place
of business or its organizational identification number. Each Pledgor will, in connection with any change described in the preceding
sentence, take all actions requested by the Collateral Agent to maintain the perfection and priority of the Collateral Agent’s
security interest in the Collateral.

 

(d)               
Each Pledgor hereby agrees to take any or all reasonable action that may be necessary or desirable or that the Collateral
Agent may request in order for the Collateral Agent to obtain control in accordance with Sections 9-105 – 9-107 of the UCC
with respect to the Collateral.

 

8.                  
Transfers and Other Liens. Each Pledgor agrees that it will not create, suffer to exist or grant any Lien
upon or with respect to any Collateral other than a Permitted Lien.

 

9.                  
Collateral Agent Appointed Attorney-in-Fact. Each Pledgor hereby appoints the Collateral Agent such Pledgor’s
attorney-in-fact, with full authority in the place and stead of such Pledgor and in the name of such Pledgor or otherwise, from
time to in the Collateral Agent’s discretion, and, in each case to be exercisable only upon the occurrence and during the
continuance of an Event of Default, to take any action and to execute any instrument which the Collateral Agent may deem necessary
or advisable to accomplish the purposes of this Agreement, including, without limitation, to receive, endorse and collect all instruments
made payable to such Pledgor representing any dividend, interest payment or other distribution in respect of the Collateral or
any part thereof and to give full discharge for the same (but the Collateral Agent shall not be obligated to and shall have no
liability to such Pledgor or any third party for failure to do so or take action). Such appointment, being coupled with an interest,
shall be irrevocable. Each Pledgor hereby ratifies all that said attorneys shall lawfully do or cause to be done by virtue hereof.

 

10.                
Collateral Agent May Perform. If any Pledgor fails to perform any agreement or obligation contained herein
to protect the Collateral Agent’s interest in the Collateral, the Collateral Agent may itself perform, or cause performance
of, such agreement or obligation, in the name of such Pledgor or the Collateral Agent, and the reasonable and documented expenses
of the Collateral Agent incurred in connection therewith shall be payable by such Pledgor pursuant to Section 13 hereof and secured
by the Collateral; provided that the Collateral Agent shall not be required to perform or discharge any obligation of such Pledgor.

 

 

 

 

 

 

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11.              
Remedies Upon Default. If any Event of Default shall have occurred and be continuing:

 

(a)                
The Collateral Agent may exercise in respect of the Collateral, in addition to any other rights and remedies provided
for herein or otherwise available to it, all of the rights and remedies of a secured party upon default under the UCC (whether
or not the UCC applies to the affected Collateral), and also may (i) take absolute control of the Collateral, including, without
limitation, transfer into the Collateral Agent’s name or into the name of its nominee or nominees (to the extent the Collateral
Agent has not theretofore done so) and thereafter receive, for the benefit of the Collateral Agent, all payments made thereon,
give all consents, waivers and ratifications in respect thereof and otherwise act with respect thereto as though it were the outright
owner thereof, (ii) require each Pledgor to, and each Pledgor hereby agrees that it will at its expense and upon request of
the Collateral Agent forthwith, assemble all or part of its respective Collateral as directed by the Collateral Agent and make
it available to the Collateral Agent at a place or places to be designated by the Collateral Agent that is reasonably convenient
to both parties, and the Collateral Agent may enter into and occupy any premises owned or leased by such Pledgor where the Collateral
or any part thereof is located or assembled for a reasonable period in order to effectuate the Collateral Agent’s rights
and remedies hereunder or under law, without obligation to such Pledgor in respect of such occupation, and (iii) without notice
except as specified below and without any obligation to prepare or process the Collateral for sale, (A) sell the Collateral
or any part thereof in one or more parcels at public or private sale, at any of the Collateral Agent’s offices or elsewhere,
for cash, on credit or for future delivery, and at such price or prices and upon such other terms as the Collateral Agent may deem
commercially reasonable and/or (B) dispose of the Collateral or any part thereof upon such terms as the Collateral Agent may
deem commercially reasonable. Each Pledgor agrees that, to the extent notice of sale or any other disposition of its respective
Collateral shall be required by law, at least ten (10) days’ notice to such Pledgor of the time and place of any public sale
or the time after which any private sale or other disposition of its respective Collateral is to be made shall constitute reasonable
notification. The Collateral Agent shall not be obligated to make any sale or other disposition of any Collateral regardless of
notice of sale having been given. The Collateral Agent may adjourn any public or private sale from time to time by announcement
at the time and place fixed therefor, and such sale may, without further notice, be made at the time and place to which it was
so adjourned. Each Pledgor hereby waives any claims against the Collateral Agent and the Holders arising by reason of the fact
that the price at which its respective Collateral may have been sold at a private sale was less than the price which might have
been obtained at a public sale or was less than the aggregate amount of the Obligations, even if the Collateral Agent accepts the
first offer received and does not offer such Collateral to more than one offeree, and waives all rights that such Pledgor may have
to require that all or any part of such Collateral be marshalled upon any sale (public or private) thereof. Each Pledgor hereby
acknowledges that (i) any such sale of its respective Collateral by the Collateral Agent shall be made without warranty, (ii) the
Collateral Agent may specifically disclaim any warranties of title, possession, quiet enjoyment or the like, and (iii) such
actions set forth in clauses (i) and (ii) above shall not adversely affect the commercial reasonableness of any such sale
of Collateral.

 

(b)               
Any cash held by the Collateral Agent as Collateral and all Cash Proceeds received by the Collateral Agent in respect
of any sale of or collection from, or other realization upon, all or any part of the Collateral may, in the discretion of the Collateral
Agent, be held by the Collateral Agent as collateral for, and/or then or at any time thereafter applied (after payment of any amounts
payable to the Collateral Agent pursuant to Section 13 hereof) in whole or in part by the Collateral Agent against, all or any
part of the Obligations in such order as the Collateral Agent shall elect, consistent with the provisions of the Securities Purchase
Agreement. Any surplus of such cash or Cash Proceeds held by the Collateral Agent and remaining after the indefeasible payment
in full in cash of all Obligations under the Notes (together with any matured indemnification obligations as of the date of such
payment, but excluding any inchoate or unmatured contingent indemnification obligations) shall be paid over to whomsoever shall
be lawfully entitled to receive the same or as a court of competent jurisdiction shall direct.

 

(c)                
In the event that the proceeds of any such sale, collection or realization are insufficient to pay all amounts to
which the Collateral Agent and the Holders are legally entitled, each Pledgor shall be liable for the deficiency, together with
interest thereon at the highest rate specified in any of the applicable Note Transaction Documents for interest on overdue principal
thereof or such other rate as shall be fixed by applicable law, together with the reasonable and documented out-of-pocket costs
of collection and the reasonable and documented out-of-pocket fees, costs, expenses and other client charges of any attorneys employed
by the Collateral Agent to collect such deficiency.

 

 

 

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(d)               
Each Pledgor hereby acknowledges that if the Collateral Agent complies with any applicable state, provincial, or
federal law requirements in connection with a disposition of the Collateral, such compliance will not adversely affect the commercial
reasonableness of any sale or other disposition of the Collateral.

 

(e)                
The Collateral Agent shall not be required to marshal any present or future collateral security (including, but not
limited to, this Agreement and the Collateral) for, or other assurances of payment of, the Obligations or any of them or to resort
to such collateral security or other assurances of payment in any particular order, and all of the Collateral Agent’s rights
hereunder and in respect of such collateral security and other assurances of payment shall be cumulative and in addition to all
other rights, however existing or arising. To the extent that each Pledgor lawfully may, such Pledgor hereby agrees that it will
not, invoke any law relating to the marshalling of collateral which might cause delay in or impede the enforcement of the Collateral
Agent’s rights under this Agreement or under any other instrument creating or evidencing any of the Obligations or under
which any of the Obligations is outstanding or by which any of the Obligations is secured or payment thereof is otherwise assured,
and, to the extent that it lawfully may, such Pledgor hereby irrevocably waives the benefits of all such laws.

 

12.              
[Reserved]

 

13.              
Indemnity and Expenses.

 

(a)                
Each Pledgor agrees, jointly and severally, to defend, protect, indemnify and hold the Collateral Agent and each
of the Holders, jointly and severally, harmless from and against any and all Indemnified Liabilities to the extent that they arise
out of or otherwise result from this Agreement (including, without limitation, enforcement of this Agreement), except actions,
causes of action, suits, claims, damages, losses, liabilities, penalties, fees, costs or expenses resulting solely and directly
from such Person’s gross negligence or willful misconduct or a material breach of this Agreement, as determined by a final
judgment of a court of competent jurisdiction.

 

(b)               
With respect to costs, expenses and fees, Section 4(g) of the Securities Purchase Agreement is hereby incorporated
herein by reference as if fully stated herein and shall apply to this Agreement mutatis mutandis.

 

14.              
  Notices, Etc. All notices and other communications provided for hereunder shall be in writing and shall be
mailed (by certified mail, postage prepaid and return receipt requested), telecopied or delivered in accordance with Section 9(f)
of the Securities Purchase Agreement at the addresses set forth below. All such notices and other communications shall be effective
(a) if sent by certified mail, return receipt requested, when received or five days after deposited in the mails, whichever
occurs first, (b) if telecopied or sent by electronic mail, when transmitted (during normal business hours), or (c) if
delivered, upon delivery.

 

15.              
  Miscellaneous.

 

(a)                
No amendment of any provision of this Agreement shall be effective unless it is in writing and signed by each Pledgor
affected thereby and the Collateral Agent, and no waiver of any provision of this Agreement, and no consent to any departure by
a Pledgor therefrom, shall be effective unless it is in writing and signed by the Collateral Agent, and then such waiver or consent
shall be effective only in the specific instance and for the specific purpose for which given.

 

 

 

 

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(b)               
No failure on the part of the Collateral Agent to exercise, and no delay in exercising, any right hereunder or under
any of the other Note Transaction Documents shall operate as a waiver thereof; nor shall any single or partial exercise of any
such right preclude any other or further exercise thereof or the exercise of any other right. The rights and remedies of the Collateral
Agent or any Holder provided herein and in the other Note Transaction Documents are cumulative and are in addition to, and not
exclusive of, any rights or remedies provided by law. The rights of the Collateral Agent or any Holder under any of the other Note
Transaction Documents against any party thereto are not conditional or contingent on any attempt by such Person to exercise any
of its rights under any of the other Note Transaction Documents against such party or against any other Person, including but not
limited to, any Pledgor.

 

(c)                
To the extent permitted by applicable law, each Pledgor hereby waives promptness, diligence, notice of acceptance
and any other notice with respect to any of the Obligations and this Agreement and any requirement that the Collateral Agent exhaust
any right or take any action against any other Person or any Collateral. Each Pledgor acknowledges that it will receive direct
and indirect benefits from the financing arrangements contemplated herein and that the waiver set forth in this Section 15(c)
is knowingly made in contemplation of such benefits. All authorizations and agencies contained herein with respect to any of the
Collateral are irrevocable and powers coupled with an interest.

 

(d)               
No Pledgor may exercise any rights that it may now or hereafter acquire against any other Pledgor that arise from
the existence, payment, performance or enforcement of any Pledgor’s obligations under this Agreement, including, without
limitation, any right of subrogation, reimbursement, exoneration, contribution or indemnification and any right to participate
in any claim or remedy of the Collateral Agent against any Pledgor or any Collateral, whether or not such claim, remedy or right
arises in equity or under contract, statute or common law, including, without limitation, the right to take or receive from any
Pledgor, directly or indirectly, in cash or other property or by set-off or in any other manner, payment or security solely on
account of such claim, remedy or right, unless and until the indefeasible payment in full in cash of all Obligations under the
Notes (together with any matured indemnification obligations as of the date of such payment, but excluding any inchoate or unmatured
contingent indemnification obligations). If any amount shall be paid to a Pledgor in violation of the immediately preceding sentence
at any time prior to the indefeasible payment in full in cash of all Obligations under the Notes (together with any matured indemnification
obligations as of the date of such payment, but excluding any inchoate or unmatured contingent indemnification obligations), such
amount shall be held in trust for the benefit of the Collateral Agent and shall forthwith be paid to the Collateral Agent to be
credited and applied to the Obligations and all other amounts payable under the Transaction Documents, whether matured or unmatured,
in accordance with the terms of the Transaction Documents, or to be held as Collateral for any Obligations or other amounts payable
under the Transaction Documents thereafter arising.

 

(e)                With respect to severability, Section 9(d) of the Securities Purchase Agreement is hereby incorporated herein by
reference as if fully stated herein and shall apply to this Agreement mutatis mutandis.

 

(f)                This
Agreement shall create a continuing security interest in the Collateral and shall (i) remain in full force and effect until the
indefeasible payment in full in cash of all Obligations under the Notes (together with any matured indemnification obligations
as of the date of such payment, but excluding any inchoate or unmatured contingent indemnification obligations), and (ii) be binding
on each Pledgor and all other Persons who become bound as debtor to this Agreement in accordance with Section 9-203(d) of the
UCC and shall inure, together with all rights and remedies of the Collateral Agent and the Holders hereunder, to the benefit of
the Collateral Agent and the Holders and their respective permitted successors, transferees and assigns. Without limiting the
generality of clause (ii) of the immediately preceding sentence the Collateral Agent and the Holders may assign or otherwise transfer
their rights and obligations under this Agreement and any of the other Transaction Documents, to any other Person pursuant to
the terms of the Notes and the Securities Purchase Agreement and such other Person shall thereupon become vested with all of the
benefits in respect thereof granted to the Collateral Agent and the Holders herein or otherwise. Upon any such assignment or transfer,
all references in this Agreement to the Collateral Agent or any such Holder shall mean the assignee of the Collateral Agent or
such Holder. None of the rights or obligations of any Pledgor hereunder may be assigned or otherwise transferred without the prior
written consent of the Collateral Agent, and any such assignment or transfer without the consent of the Collateral Agent shall
be null and void.

 

 

 

 

    	 	9	 

     

    

 

(g)               
Upon the indefeasible payment in full in cash of all Obligations under the Notes (together with any matured indemnification
obligations as of the date of such payment, but excluding any inchoate or unmatured contingent indemnification obligations), (i)
subject to paragraph (f) above, this Agreement and the security interests and licenses created hereby shall automatically terminate
and all rights to the Collateral shall revert to the Pledgors and (ii) the Collateral Agent will, upon the Pledgors’ request
and at the Pledgors’ expense, without any representation, warranty or recourse whatsoever, (A) return to the Pledgors (or
whomsoever shall be lawfully entitled to receive the same or as a court of competent jurisdiction shall direct) such of the Collateral
as shall not have been sold or otherwise disposed of or applied pursuant to the terms hereof and (B) execute and deliver to the
Pledgors such documents as the Pledgors shall reasonably request to evidence such termination.

 

(h)               
ALL QUESTIONS CONCERNING THE CONSTRUCTION, VALIDITY, ENFORCEMENT AND INTERPRETATION OF THIS AGREEMENT SHALL BE GOVERNED
BY THE INTERNAL LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO ANY CHOICE OF LAW OR CONFLICT OF LAW PROVISION OR RULE
(WHETHER OF THE STATE OF NEW YORK OR ANY OTHER JURISDICTIONS) THAT WOULD CAUSE THE APPLICATION OF THE LAWS OF ANY JURISDICTIONS
OTHER THAN THE STATE OF NEW YORK.

 

(i)                 
EACH PARTY HEREBY IRREVOCABLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE STATE AND FEDERAL COURTS SITTING IN THE
CITY OF NEW YORK, BOROUGH OF MANHATTAN, FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION HEREWITH OR WITH ANY TRANSACTION
CONTEMPLATED HEREBY OR DISCUSSED HEREIN, AND HEREBY IRREVOCABLY WAIVES, AND AGREES NOT TO ASSERT IN ANY SUIT, ACTION OR PROCEEDING,
ANY CLAIM THAT IS NOT PERSONALLY SUBJECT TO THE JURISDICTION OF ANY SUCH COURT, THAT SUCH SUIT, ACTION OR PROCEEDING IS BROUGHT
IN AN INCONVENIENT FORUM OR THAT THE VENUE OF SUCH SUIT, ACTION OR PROCEEDING IS IMPROPER.

 

(j)                 
EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION
OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.

 

(k)               
Each party hereby irrevocably waives personal service of process and consents to process being served in any suit,
action or proceeding by mailing a copy thereof to such party at the address for such notices to it under this Agreement and agrees
that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be
deemed to limit in any way any right to serve process in any manner permitted by law.

 

(l)                 
Each party hereto irrevocably and unconditionally waives any right it may have to claim or recover in any legal action,
suit or proceeding referred to in this Section any special, exemplary, punitive or consequential damages.

 

(m)              
Section headings herein are included for convenience of reference only and shall not form part of, or affect the
interpretation of, this Agreement.

 

(n)               
With respect to counterparts, Section 9(b) of the Securities Purchase Agreement is hereby incorporated herein by
reference as if fully stated herein and shall apply to this Agreement mutatis mutandis.

 

16.              
  Notwithstanding anything to the contrary contained in this Agreement, the sole recourse of Collateral Agent for any
obligations of any Pledgor under this Agreement (except for obligations set forth in Section 13) shall be to the Collateral.

 

[SIGNATURE PAGE FOLLOWS]

 

 

 

 

 

    	 	10	 

     

    

 

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

 

 

PLEDGORS:

 

ACACIA RESEARCH GROUP LLC

 

By: Marc Booth                                       

Name: Marc Booth

Title: Chief Executive Officer

 

Address for Notices:

 

 

 

SAINT LAWRENCE COMMUNICATIONS LLC

 

 

By: Marc Booth                                     

Name: Marc Booth

Title: Chief Executive Officer

 

Address for Notices:

 

 

 

ADVANCED SKELETAL INNOVATIONS LLC

 

 

By: Marc Booth                                 

Name: Marc Booth

Title: Chief Executive Officer

 

Address for Notices:

 

 

 

    	 	11	 

     

    

 

ACCEPTED BY:

 

STARBOARD VALUE INTERMEDIATE FUND LP,

as Collateral Agent

 

 

By: /s/ Jeffrey C. Smith                            

Name: Jeffrey C. Smith

Title: Authorized Signatory

 

Address:

 

 

 

 

 

 

 

 

 

 

 

 

 

    	 	12	 

     

    

 

SCHEDULE I

PLEDGED SHARES

 

	

Issuer	Percentage of Ownership (%)	Type	Number	Value	Certificate Number	
        Percentage Pledged

        (%)
	Certificated
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 

 

 

 

 

 

 

 

 

    	 	13Exhibit 10.4

 

GUARANTY (as amended,
restated, amended and restated, supplemented or otherwise modified from time to time, this "Guaranty"), dated
as of June 30, 2020, made by each of the undersigned (together with each other Person that executes a joinder agreement and becomes
a "Guarantor" hereunder, each a "Guarantor", and collectively, the "Guarantors"), in
favor of the Holders.

 

W I T N E S S E T H :

 

WHEREAS, Acacia Research
Corporation, a Delaware corporation, (the "Company"), and each party listed as a "Buyer" on
the Schedule of Buyers (as such schedule may be amended, restated or otherwise modified from time to time) attached to the Securities
Purchase Agreement (each a "Buyer", and collectively, the "Buyers") are parties to that certain
Securities Purchase Agreement, dated as of November 18, 2019 (as amended, restated, amended and restated, supplemented or otherwise
modified from time to time, the "Securities Purchase Agreement"), pursuant to which, among other things, certain
Buyers purchased from the Company certain senior secured notes issued on June 4, 2020 (as such senior secured notes were amended,
restated, replaced, exchanged or otherwise modified from time to time on or prior to the date of the Exchange Agreement, the "June
4 Notes");

 

WHEREAS, pursuant to
that certain Exchange Agreement, dated as of the date hereof (as amended, restated, amended and restated, supplemented or otherwise
modified from time to time, the “Exchange Agreement”), by and between the Company, Merton Acquisition HoldCo
LLC, a Delaware limited liability company ("Merton"), and Starboard Value LP, each of the June 4 Notes shall be
exchanged and replaced in their entirety by new notes (as amended, restated, amended and restated, supplemented or otherwise modified
from time to time, the "Notes") issued by Merton in favor of each of the Holders, in the original aggregate principal
amount of $115,000,000, to the same Starboard Funds and in the same respective amounts as the June 4 Notes;

 

WHEREAS, the Holders
have requested, and the Guarantors have agreed, that the Guarantors shall execute and deliver to the Holders a guaranty guaranteeing
all of the Obligations;

 

WHEREAS, pursuant to
that certain Pledge and Security Agreement, dated as of June 30, 2020, (as amended, restated, amended and restated, supplemented
or otherwise modified from time to time, the "Merton Security Agreement"), the Company and Merton and have granted
to Starboard Value Intermediate Fund LP, as collateral agent for the Buyers (in such capacity, the "Collateral Agent"),
a security interest in and lien on certain assets to secure the Secured Obligations (as defined in the Security Agreement);

 

WHEREAS, pursuant to
that certain Stock Pledge Agreement, dated as of June 30, 2020, (as amended, restated, amended and restated, supplemented or otherwise
modified from time to time, the "Pledge Agreement" and together with the Merton Security Agreement, the "Security
Agreements", and each, a "Security Agreement"), certain Subsidiaries of the Company have granted to the
Collateral Agent a security interest in and lien on certain assets to secure the Secured Obligations (as defined in the Pledge
Agreement); and

 

WHEREAS, each Guarantor
has determined that the execution, delivery and performance of this Guaranty directly benefits, and is in the best interest of,
such Guarantor.

 

NOW, THEREFORE, in consideration
of the premises and the agreements herein and for other consideration, the sufficiency of which is hereby acknowledged, each Guarantor
hereby agrees with each Holder as follows:

 

 

 

 

 

    	 	1	 

     

    

 

SECTION 1. Definitions.
Reference is hereby made to the Securities Purchase Agreement and the Notes for a statement of the terms thereof. All terms used
in this Guaranty which are defined in the Securities Purchase Agreement or the Notes and not otherwise defined herein shall have
the same meanings as set forth therein, as applicable.

 

SECTION 2. Guaranty.
The Guarantors, jointly and severally, hereby unconditionally and irrevocably, guarantee the punctual payment, as and when due
and payable, by stated maturity or otherwise, of all Obligations now or hereafter existing under the Notes (including, without
limitation, all interest that accrues after the commencement of any proceeding commenced by or against Merton or any Guarantor
under any provision of the Bankruptcy Code (Chapter 11 of Title 11 of the United States Code) or under any other bankruptcy
or insolvency law, assignments for the benefit of creditors, formal or informal moratoria, compositions, or extensions generally
with creditors, or proceedings seeking reorganization, arrangement, or other similar relief (an "Insolvency Proceeding")),
whether or not the payment of such interest is unenforceable or is not allowable due to the existence of such Insolvency Proceeding,
and all fees, commissions, expense reimbursements, indemnifications and all other amounts due or to become due under the Notes
(such obligations, to the extent not paid by Merton, being the "Guaranteed Obligations"). Without limiting the
generality of the foregoing, each Guarantor's liability hereunder shall extend to all amounts that constitute part of the Guaranteed
Obligations and would be owed by Merton to the Holders under the Notes but for the fact that they are unenforceable or not allowable
due to the existence of an Insolvency Proceeding involving Merton.

 

SECTION 3. Guaranty
Absolute; Continuing Guaranty; Assignments.

 

(a)         
Except as set forth herein to the contrary, the Guarantors, jointly and severally, guarantee that the Guaranteed Obligations
will be paid strictly in accordance with the terms of the applicable Transaction Documents, regardless of any law, regulation or
order now or hereafter in effect in any jurisdiction affecting any of such terms or the rights of the Holders with respect thereto.
The obligations of each Guarantor under this Guaranty are independent of the Guaranteed Obligations, and a separate action or actions
may be brought and prosecuted against any Guarantor to enforce such obligations, irrespective of whether any action is brought
against Merton and any of the Guarantors (each, a "Transaction Party") or whether any Transaction Party is joined
in any such action or actions. The liability of any Guarantor under this Guaranty shall be irrevocable, absolute and unconditional
irrespective of, and each Guarantor hereby irrevocably waives, to the extent permitted by law, any defenses it may now or hereafter
have (other than payment in full of all Guaranteed Obligations (together with any matured indemnification obligations as of the
date of such payment, but excluding any inchoate or unmatured contingent indemnification obligations)) in any way relating to,
any or all of the following:

 

(i)             any lack of validity or enforceability of any applicable Transaction Document or any agreement or instrument relating thereto;

 

(ii)            any change in the time, manner or place of payment of, or in any other term of, all or any of the Guaranteed Obligations,
or any other amendment or waiver of or any consent to departure from any applicable Transaction Document, including, without limitation,
any increase in the Guaranteed Obligations resulting from the extension of additional credit to any Transaction Party or otherwise;

 

(iii)           any taking, exchange, release or non-perfection of any Collateral (as defined in the applicable Security Agreement) with
respect to the Guaranteed Obligations, or any taking, release or amendment or waiver of or consent to departure from any other
guaranty, for all or any of the Guaranteed Obligations; or

 

(iv)           any change, restructuring or termination of the corporate, limited liability company or partnership structure or existence
of any Transaction Party.

 

 

 

 

    	 	2	 

     

    

 

This Guaranty shall continue to be effective
or be reinstated, as the case may be, if at any time any payment of any of the Guaranteed Obligations is rescinded or must otherwise
be returned by any Holder or any other Person upon the insolvency, bankruptcy or reorganization of any Transaction Party or otherwise,
all as though such payment had not been made.

 

(b)         
This Guaranty is a continuing guaranty and shall remain in full force and effect until the payment in full of all Guaranteed
Obligations (together with any matured indemnification obligations as of the date of such payment, but excluding any inchoate or
unmatured contingent indemnification obligations).

 

SECTION 4. Waivers.
To the extent permitted by applicable law, each Guarantor hereby waives promptness, diligence, notice of acceptance and any other
notice with respect to any of the Guaranteed Obligations and this Guaranty and any requirement that the Holders or the Collateral
Agent exhaust any right or take any action against any Transaction Party or any other Person or any Collateral (as defined in applicable
Security Agreement). Each Guarantor acknowledges that it will receive direct and/or indirect benefits from the financing arrangements
contemplated herein and that the waiver set forth in this Section 4 is knowingly made in contemplation of such benefits.
The Guarantors hereby waive any right to revoke this Guaranty, and acknowledge that this Guaranty is continuing in nature and applies
to all Guaranteed Obligations, whether existing now or in the future.

 

SECTION 5. Subrogation.
Until the payment in full of all Guaranteed Obligations (together with any matured indemnification obligations as of the date of
such payment, but excluding any inchoate or unmatured contingent indemnification obligations), each Guarantor subordinates any
rights that it may now or hereafter acquire against any Transaction Party or any other guarantor that arise from the existence,
payment, performance or enforcement of any Guarantor's obligations under this Guaranty, including, without limitation, any right
of subrogation, reimbursement, exoneration, contribution or indemnification and any right to participate in any claim or remedy
of the Holders or the Collateral Agent against any Transaction Party or any other guarantor or any Collateral (as defined in the
applicable Security Agreement), whether or not such claim, remedy or right arises in equity or under contract, statute or common
law, including, without limitation, the right to take or receive from any Transaction Party or any other guarantor, directly or
indirectly, in cash or other property or by set-off or in any other manner, payment or security solely on account of such claim,
remedy or right. If any amount shall be paid to a Guarantor in violation of the immediately preceding sentence at any time prior
to the payment in full of all Guaranteed Obligations (together with any matured indemnification obligations as of the date of such
payment, but excluding any inchoate or unmatured contingent indemnification obligations), such amount shall be held in trust for
the benefit of the Holders and shall forthwith be paid ratably to the Holders to be credited and applied to the Guaranteed Obligations
and all other amounts payable under this Guaranty, whether matured or unmatured, in accordance with the terms of the applicable
Transaction Documents, or to be held as Collateral (as defined in the applicable Security Agreement) for any Guaranteed Obligations
or other amounts payable under this Guaranty thereafter arising. If any Guarantor shall make indefeasible payment in full in cash
of all Guaranteed Obligations under the Notes (together with any matured indemnification obligations as of the date of such payment,
but excluding any inchoate or unmatured contingent indemnification obligations), the Holders will, at such Guarantor's request
and expense, execute and deliver to such Guarantor appropriate documents, without recourse and without representation or warranty
(in each case, solely with respect to such evidence of transfer by subrogation), necessary to evidence the transfer by subrogation
to such Guarantor of an interest in the Guaranteed Obligations resulting from such payment by such Guarantor.

 

SECTION 6. Representations,
Warranties and Covenants.

 

(a)         
Each Guarantor hereby represents and warrants as of the date first written above as follows:

 

(i)             Such Guarantor is an entity duly organized and validly existing and in good standing under the laws of the jurisdiction
in which it was formed, and has the requisite power and authorization to own its properties and to carry on its business as now
being conducted and as presently proposed to be conducted, except as would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect. Such Guarantor is duly qualified as a foreign entity to do business and is in good
standing in every jurisdiction in which its ownership of property or the nature of the business conducted by it makes such qualification
necessary, except to the extent that the failure to be so qualified or be in good standing would not reasonably be expected to
have a Material Adverse Effect.

 

 

 

 

    	 	3	 

     

    

 

(ii)            Such
Guarantor has the requisite power and authority to enter into and perform its obligations under each applicable Transaction Document
to which it is a party. The execution and delivery by such Guarantor of such applicable Transaction Documents and the consummation
by such Guarantor of the transactions contemplated thereby have been duly authorized by such Guarantor's board of directors (or
other applicable governing body). The applicable Transaction Documents to which such Guarantor is a party have been duly executed
and delivered by such Guarantor, and constitute the legal, valid and binding obligations of such Guarantor, enforceable against
it in accordance with their respective terms, except as such enforceability may be limited by general principles of equity or
applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws relating to, or affecting generally,
the enforcement of applicable creditors' rights and remedies.

 

(iii)           The execution, delivery and performance of the applicable Transaction Documents to which it is a party by such Guarantor
and the consummation of the transactions contemplated hereby and thereby will not (i) result in a violation of any organizational
documents of such Guarantor or (ii) conflict with, or constitute a default (or an event which with notice or lapse of time or both
would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, any agreement,
indenture or instrument to which such Guarantor is a party, or (iii) result in a violation of any law, rule, regulation, order,
judgment or decree applicable to such Guarantor or by which any property or asset of such Guarantor is bound or affected, other
than, in the cases of the foregoing clauses (ii) and (iii), such conflicts, defaults or violations that would not, individually
or in the aggregate, reasonably be expected to have a Material Adverse Effect.

 

(iv)           No Guarantor is required to obtain any consent, authorization or order of, or make any filing or registration with, any
court, governmental agency or any federal or state regulatory or self-regulatory agency or any other Person in order for it to
execute, deliver or perform any of its obligations under or contemplated by the applicable Transaction Documents, in each case
in accordance with the terms hereof or thereof, other than pursuant to the exceptions expressly provided for in any of the applicable
Transaction Documents or to the extent failure to obtain such consent, authorization or order of, or to make any filing or registration,
would not reasonably be expect to have a Material Adverse Effect.

 

(v)            Except
with respect to any matters related to Intellectual Property Rights that occur in the ordinary course of the Guarantor's business
as a purchaser, seller and enforcer of Intellectual Property Rights, there is no action, suit, proceeding, inquiry or investigation
before or by the Principal Market, any court, public board, government agency, self-regulatory organization or body pending or,
to the knowledge of such Guarantor, threatened against or adversely affecting such Guarantor, or any of such Guarantor's officers
or directors, whether of a civil or criminal nature or otherwise, in their capacities as such, except as set forth in Schedule
3(w) to the Securities Purchase Agreement and Schedule 1 hereto. The matters set forth in Schedule 3(w) and
Schedule 1 hereto would not reasonably be expected to have a Material Adverse Effect.

 

(vi)           Such Guarantor (A) has read and understands the terms and conditions of the Securities Purchase Agreement, the Notes and
the other applicable Transaction Documents, and (B) now has and will continue to have independent means of obtaining information
concerning the affairs, financial condition and business of Merton and the other Transaction Parties, and has no need of, or right
to obtain from the Collateral Agent or any Holder, any credit or other information concerning the affairs, financial condition
or business of Merton or the other Transaction Parties that may come under the control of the Collateral Agent or any Holder.

 

(b)         
Each Guarantor covenants and agrees that until the indefeasible payment in full in cash of all obligations under the Notes
(together with any matured indemnification obligations as of the date of such payment, but excluding any inchoate or unmatured
contingent indemnification obligations) and payment of all other amounts payable under this Guaranty (excluding any inchoate or
unmatured contingent indemnification obligations), it will comply with each of the covenants (except to the extent applicable only
to (1) a public company or (2) the Company or Merton (and not its Subsidiaries)) which are set forth in Section 10 of the
Notes as if such Guarantor were a party thereto.

 

 

 

 

    	 	4	 

     

    

 

SECTION 7. Right of
Set-off. Upon the occurrence and during the continuance of any Event of Default, the Collateral Agent and any Holder may,
and is hereby authorized to, at any time and from time to time, without prior notice to the Guarantors (any such notice being expressly
waived by each Guarantor) and to the fullest extent permitted by law, set-off and apply any and all deposits (general or special,
time or demand, provisional or final, but excluding (a) accounts specifically and exclusively used for payroll, payroll taxes and
other employee wage and benefit payments or for the benefit of any Guarantor's employees, (b) trust or tax withholding accounts
and (c) any other Excluded Account (as defined in applicable Security Agreement)) at any time held and other Indebtedness at any
time owing by any Holder to or for the credit or the account of any Guarantor against any and all Guaranteed Obligations of the
Guarantors now or hereafter existing under this Guaranty, irrespective of whether or not the Collateral Agent or any Holder shall
have made any demand under this Guaranty. Collateral Agent and each Holder agrees to notify the relevant Guarantor promptly after
any such set-off and application made by such Holder, provided that the failure to give such notice shall not affect the validity
of such set-off and application. The rights of the Collateral Agent or any Holder under this Section 7 are in addition
to other rights and remedies (including, without limitation, other rights of set-off) which the Collateral Agent or such Holder
may have under this Guaranty in law or otherwise.

 

SECTION 8. Notices,
Etc. All notices and other communications provided for hereunder shall be in writing and shall be mailed (by certified mail,
postage prepaid and return receipt requested), telecopied or delivered in accordance with Section 9(f) of the Securities Purchase
Agreement at the addresses set forth below. All such notices and other communications shall be effective (a) if set by certificated
mail, return receipt requested, when received or five days after deposited in the mails, whichever occurs first, (b) if telecopied
or sent by electronic mail, when transmitted (during normal business hours), or (c) if delivered personally, upon receipt.

 

SECTION 9. GOVERNING
LAW; CONSENT TO JURISDICTION; SERVICE OF PROCESS AND VENUE. ALL QUESTIONS CONCERNING THE CONSTRUCTION, VALIDITY, ENFORCEMENT
AND INTERPRETATION OF THIS GUARANTY SHALL BE GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO ANY
CHOICE OF LAW OR CONFLICT OF LAW PROVISION OR RULE (WHETHER OF THE STATE OF NEW YORK OR ANY OTHER JURISDICTIONS) THAT WOULD CAUSE
THE APPLICATION OF THE LAWS OF ANY JURISDICTIONS OTHER THAN THE STATE OF NEW YORK. EACH PARTY HEREBY IRREVOCABLY SUBMITS TO THE
EXCLUSIVE JURISDICTION OF THE STATE AND FEDERAL COURTS SITTING IN THE CITY OF NEW YORK, BOROUGH OF MANHATTAN, FOR THE ADJUDICATION
OF ANY DISPUTE HEREUNDER OR IN CONNECTION HEREWITH OR WITH ANY TRANSACTION CONTEMPLATED HEREBY OR DISCUSSED HEREIN, AND HEREBY
IRREVOCABLY WAIVES, AND AGREES NOT TO ASSERT IN ANY SUIT, ACTION OR PROCEEDING, ANY CLAIM THAT IS NOT PERSONALLY SUBJECT TO THE
JURISDICTION OF ANY SUCH COURT, THAT SUCH SUIT, ACTION OR PROCEEDING IS BROUGHT IN AN INCONVENIENT FORUM OR THAT THE VENUE OF SUCH
SUIT, ACTION OR PROCEEDING IS IMPROPER. Each party hereby irrevocably waives personal service
of process and consents to process being served in any suit, action or proceeding by mailing a copy thereof to such party at the
address for such notices to it under this Guaranty and agrees that such service shall constitute good and sufficient service of
process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner
permitted by law. 

 

SECTION 10. WAIVER
OF JURY TRIAL, ETC. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR
THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF THIS GUARANTY OR ANY TRANSACTION CONTEMPLATED
HEREBY.

 

SECTION 11. Miscellaneous.

 

(a)         
Each Guarantor will make each payment hereunder in lawful money of the United States of America and in immediately available
funds to each Holder, at such address specified by such Holder from time to time by notice to the Guarantors.

 

 

 

 

    	 	5	 

     

    

 

(b)         
Provisions of this Guaranty may be amended and the observance thereof may be waived (either generally or in a particular
instance and either retroactively or prospectively), only with the written consent of each Guarantor and the Required Holders.
Any amendment or waiver effected in accordance with this Section 11 shall be binding upon each Holder and each Guarantor.
Any consideration offered or paid to any Person to amend or consent to a waiver or modification of any provision of this Guaranty
shall be subject to the terms of the Securities Purchase Agreement.

 

(c)         
No failure on the part of the Collateral Agent or any Holder to exercise, and no delay in exercising, any right hereunder
shall operate as a waiver thereof, nor shall any single or partial exercise of any right hereunder preclude any other or further
exercise thereof or the exercise of any other right. The rights and remedies of the Collateral Agent and the Holders provided herein
are cumulative and are in addition to, and not exclusive of, any rights or remedies provided by law. The rights of the Collateral
Agent and the Holders under this Guaranty against any party hereto are not conditional or contingent on any attempt by the Collateral
Agent or any Holder to exercise any of their respective rights under any other applicable Transaction Document against such party
or against any other Person.

 

(d)         
With respect to severability, Section 9(d) of the Securities Purchase Agreement is hereby incorporated herein by reference
as if fully stated herein and shall apply to this Guaranty mutatis mutandis.

 

(e)         
This Guaranty shall (i) be binding on each Guarantor and its respective successors and permitted assigns, and (ii) inure,
together with all rights and remedies of the Collateral Agent and the Holders hereunder, to the benefit of the Collateral Agent
and the Holders and their respective successors, permitted transferees and permitted assigns. Without limiting the generality of
clause (ii) of the immediately preceding sentence, the Collateral Agent and any Holder may assign or otherwise transfer its rights
and obligations under this Guaranty to any other Person in accordance with the terms of the Notes and Securities Purchase Agreement,
and such other Person shall thereupon become vested with all of the benefits in respect thereof granted to the Collateral Agent
or such Holder, as the case may be, herein or otherwise. None of the rights or obligations of any Guarantor hereunder may be assigned
or otherwise transferred without the prior written consent of the Required Holders; provided that the prior written consent
of each Holder shall be required for the assignment or transfer of all or substantially all of the obligations of any Guarantor
hereunder.

 

(f)           
This Guaranty reflects the entire understanding of the transaction contemplated hereby and shall not be contradicted or
qualified by any other agreement, oral or written, entered into before the date hereof.

 

(g)         
Section headings herein are included for convenience of reference only and shall not form part of, or affect the interpretation
of, this Guaranty.

 

(h)         
With respect to counterparts, Section 9(b) of the Securities Purchase Agreement is hereby incorporated herein by reference
as if fully stated herein and shall apply to this Guaranty mutatis mutandis.

 

REMAINDER OF THIS
PAGE INTENTIONALLY LEFT BLANK]

 

 

    	 	6	 

     

    

 

IN WITNESS WHEREOF, each
Guarantor has caused this Guaranty to be executed by its respective duly authorized officer, as of the date first above written.

 

	 	ACACIA RESEARCH CORPORATION
	 	 
	 	By: /s/ Clifford Press                      
	 	Name: Clifford Press
	 	Title: Chief Executive Officer
	 	 
	 	Address for Notices:
	 	 

 

 

 

 

 

 

    	 	7

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