Seventh Supplemental Agreement, dated as of April 14, 2022, between Starboard Value, L.P., on behalf of the Starboard Funds, Acacia Research Corporation and Merton Acquisition Holdco LLC

Definitions. Unless otherwise specified herein, all capitalized terms used and not defined herein shall have the meanings ascribed to them in the Securities Purchase Agreement, the First Supplemental Agreement, the Second Supplemental Agreement, the Third Supplemental Agreement, the Fourth Supplemental Agreement, the Fifth Supplemental Agreement, the Sixth Supplemental Agreement and the Exchange Agreement, as applicable.

Amendment of Existing Merton Notes. The Company, Merton and the Designee on behalf of the Starboard Funds representing the Required Holders (as defined in the Existing Merton Notes) agree to amend the terms of the Existing Merton Notes as follows:

a. Definition of Maturity Date. The definition of the term “Maturity Date” set forth in Section 1 of the Existing Merton Notes is hereby amended and replaced by the following: “July 15, 2022”.

b. Definition of Permitted Debt. The definition of the term “Permitted Debt” set forth in Section 10(a)(i) of the Existing Merton Notes is amended to add the following:

(23) guarantees by the Company or the Parent Guarantor issued in connection with Derivative Instruments permitted by Section 27(hhh)(xix).

c. Definition of Permitted Investments. The definition of the term “Permitted Investments” set forth in Section 27(hhh) of the Existing Merton Notes is amended to add the following:

(xix) Derivative Instruments where the aggregate collateral pledged under the Derivative Instruments does not at any time exceed (i) the sum of total cash and Cash Equivalents held by the Parent Guarantor and its Subsidiaries, less (ii) the amount of unrestricted and unencumbered cash and or Marketable Securities required to satisfy the minimum cash covenant set forth in Section 10(f).

d. Definition of Derivative Instruments. Section 27 of the Existing Merton Notes is hereby amended to add the following definition:

(fffff) “Derivative Instruments” means (i) derivative instruments that create short-equivalent positions provided that securities equivalent in kind and amount to the securities “sold short” (or securities convertible into or exchangeable for such securities) are set aside and held while the instrument is outstanding, (ii) derivative instruments that create long equivalent positions in debt or equity instruments, and (iii) other derivative instruments as may be approved in writing by the Designee.

Representations and Warranties.  

a. The Designee represents and warrants to the Company, and each of the Company and Merton, represents and warrants to the Designee and the Starboard Funds holding the Merton Notes in accordance with this Agreement, that, as of the date hereof: (i) such Person is an entity duly organized and validly existing under the laws of the jurisdiction of its formation, has the requisite power and authority to execute and deliver this Agreement and to carry out and perform all of its obligations under the terms of this Agreement; (ii) this Agreement has been duly executed and delivered on behalf of such Person, and this Agreement constitutes the valid and legally binding obligation of such Person enforceable against such Person in accordance with its terms, except as such enforceability may be limited by general principles of equity or to applicable bankruptcy, insolvency, reorganization, moratorium, liquidation and other similar laws relating to, or affecting generally, the enforcement of applicable creditors’ rights and remedies; (iii) the execution, delivery and performance by such Person of this Agreement and the consummation by such Person of the transactions contemplated hereby will not (1) result in a violation of the organizational documents of such Person, (2) 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 Person is a party, or (3) result in a violation of any law, rule, regulation, order, judgment or decree (including federal and state securities laws) applicable to such Person, except in the case of clause (2) and (3) above, for such conflicts, defaults, rights or violations which would not, individually or in the aggregate, reasonably be expected to have a material adverse effect on the ability of such Person to perform its obligations hereunder; and (iv) the Designee has the requisite authority to execute this Agreement on behalf of the Required Holders (as defined in the applicable Transaction Documents).

b.  In addition, the Company hereby represents and warrants to the Designee and the Starboard Funds holding the Merton Notes, that, as of the date hereof and as of the date of the consummation of the transactions contemplated hereby: (i) the Board of Directors of the Company approved the resolutions set forth in Schedule A attached hereto; (ii) no Subsidiary, other than Acacia Research Group LLC (“ARG”), has any (a) Material Claims or Liabilities, whether direct or indirect, absolute, accrued or contingent, that would be required to be reflected on a balance sheet prepared with respect to such Person on a stand-alone basis in accordance with GAAP, (b) unusual forward or long-term commitments, (c) unrealized or anticipated losses from any unfavorable commitments, (d) contracts or commitments, including leases or with employees, except as set forth on Schedule B attached hereto, which, for purposes of the Merton Notes, shall not be a breach of Section 10 (g)(i)(3) thereof; or (e) litigation, arbitration or dispute, including regarding tax (clause (a) to and including clause (e) are collectively referred to herein as “Obligations”), other than legal and professional fees and royalty sharing arrangements, and related contracts or commitments, accrued in the ordinary course of the patent assertion business, and, in the case of (e), litigation with respect to such Subsidiaries as plaintiffs in Intellectual Property litigation, (iii) neither the Company nor Merton or any of their respective Subsidiaries has any knowledge of any event, circumstance or information that would give rise to a reasonable basis for the assertion against any Subsidiary, other than ARG, of any future Obligations material to such Subsidiary on a stand-alone basis, (iv) to the Company’s knowledge, no Subsidiary, other than ARG and the Subsidiaries and related activities listed on Schedule D, has conducted any business or operations or has had any liabilities or obligations or owned any asset or been party to any agreement during the last five (5) years, or, since such Subsidiary has been formed if such Subsidiary was formed within the last five (5) years, other than their ordinary course activities of purchasing and licensing intellectual property and liabilities incidental to such activities; and (v) the Subsidiaries listed on Schedule C attached hereto, represent all Material Subsidiaries (as defined below) of the Company. As used herein, (i) “Material Subsidiary” means any Subsidiary of the Company that, (x) had total revenues for the twelve (12) month period ended December 31, 2021 that were equal to, or more than, 1% of the consolidated revenues of the Company and its Subsidiaries or (y) as of December 31, 2021 held 1% or more of the consolidated assets of the Company and its Subsidiaries, (ii) “Material Claims or Liabilities” means claims or liabilities to third parties greater than $1 million, and (iii) “Company’s Knowledge” means the actual knowledge or belief of Clifford Press, Marc Booth, Richard Rosenstein, Jason Soncini, Jennifer Graff, Nadereh Russell, Martin D. McNulty Jr. or Wesley L. Golby.