FORM OF
NON-RECOURSE
PROMISSORY NOTE
DUE NOVEMBER 1, 1997
$450,000.00 Pasadena, California
July 6, 1997
FOR VALUE RECEIVED, ACACIA RESEARCH CORPORATION, a California
corporation ("MAKER"), unconditionally promises to pay to the
order of _______________, an individual ("PAYEE"), in the manner
and at the place hereinafter provided, the principal amount of
FOUR HUNDRED FIFTY THOUSAND DOLLARS ($450,000.00).
Maker also promises to pay interest on the unpaid principal
amount hereof from the date hereof until paid in full at a simple
interest rate equal to 6.07% per annum from July 6, 1997 through
November 1, 1997 ("Maturity"). Such interest shall not compound.
Interest on this Note shall be payable on the maturity date and
as set forth in Section 3 hereof.
PAYMENTS. All payments of principal and interest in respect
of this Note shall be made in lawful money of the United States
of America. Maker shall have the right at any time and from time
to time to prepay the principal of this Note in whole or in part,
without premium or penalty, such prepayment, if in full, to be
accompanied by accrued and unpaid interest to the date of
prepayment. Maker shall also have the option, but not the
obligation, on each date on which a partial payment is made to
pay any interest which has accrued as of such partial payment
date. Any partial payments made hereunder shall be credited to
(i) cost of collection with respect to the Pledged Shares as
defined in the Pledge Agreement, of even date herewith, between
Maker and Payee; and (ii) principal, unless otherwise provided
herein, and interest shall thereupon cease to accrue upon the
principal so credited.
ACCELERATION. Prior to the complete repayment of the Note
and within 10 business days after the closing of one or more
transactions (including, without limitation, offerings of equity
or the incurrence of debt) in which Maker raises capital to be
used for Maker's purposes, Maker agrees to use 32.5% of the net
proceeds realized by Maker in each transaction to reduce the
outstanding amount of this Note.
EVENTS OF DEFAULT. The occurrence of any of the following
events shall constitute an "EVENT OF DEFAULT:"
failure of Maker to pay any principal under this Note when
due, whether at stated maturity, acceleration, or otherwise, or
failure of Maker to pay any interest or other amount due under
this Note within five business days after the date due; and
if Maker shall challenge, or institute any proceedings to
challenge, the validity, binding effect or enforceability of this
Note or any endorsement of this Note or any other obligation to
Payee.
REMEDIES. Upon the occurrence and during the continuance of
any Event of Default, Payee may, by written notice to Maker,
declare the principal amount of this Note, together with accrued
interest thereon, to be due and payable, and the principal amount
of this Note, together with such interest, shall thereupon
immediately become due and payable without presentment, further
notice, protest or other requirements of any kind (all of which
are hereby expressly waived by Maker).
MISCELLANEOUS.
(a) Any notice or other communication herein required or
permitted to be given shall be in writing and may be personally
served, telexed or sent by telefacsimile or United States mail or
courier service and shall be deemed to have been given when
delivered in person or by courier service, upon receipt of
telefacsimile or telex, or three business days after depositing
it in the United States mail with postage prepaid and properly
addressed. For the purposes hereof, the address of Maker shall
be as specified under its signature below; the address of Payee
shall be Mr. H. Lee Browne, c/o Soundview Technologies
Incorporated, Two Soundview Drive, Greenwich, Connecticut 06830;
or in each case at such other address as shall be designated by
Payee or Maker.
(b) No failure or delay on the part of Payee or any other
holder of this Note to exercise any right, power or privilege
under this Note and no course of dealing between Maker and Payee
shall impair such right, power or privilege or operate as a
waiver of any default or an acquiescence therein, nor shall any
single or partial exercise of any such right, power or privilege
preclude any other or further exercise thereof or the exercise of
any other right, power or privilege. The rights and remedies
expressly provided in this Note are cumulative to, and not
exclusive of, any rights or remedies that Payee would otherwise
have. No notice to or demand on Maker in any case shall entitle
Maker to any other or further notice or demand in similar or
other circumstances or constitute a waiver of the right of Payee
to any other or further action in any circumstances without
notice or demand.
(c) Maker and any endorser of this Note hereby consent to
renewals and extensions of time at or after the maturity hereof,
without notice, and hereby waive diligence, presentment, protest,
demand and notice of every kind and, to the full extent permitted
by law, the right to plead any statute of limitations as a
defense to any demand hereunder.
(d) If any provision in or obligation under this Note shall be
invalid, illegal or unenforceable in any jurisdiction, the
validity, legality and enforceability of the remaining provisions
or obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired
thereby.
(e) This Note is non-recourse to the Maker and its assets, and
Maker shall have no personal liability under this Note. Payee's
only recourse shall be against the collateral pledged to Payee
under the Pledge Agreement.
(f) This Note and the rights and obligations of Maker and
Payee hereunder shall be governed by, and shall be construed and
enforced in accordance with, the internal laws of the State of
California without regard to conflicts of laws principles.
IN WITNESS WHEREOF, Maker has caused this Note to be executed
and delivered by its authorized officer as of the day and year
and at the place first above written.
ACACIA RESEARCH CORPORATION
By: Paul R. Ryan
Its: President and Chief Executive
Officer
Notice Address:
Acacia Research Corporation
12 South Raymond Avenue
Pasadena, California 91105