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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 8-K

 

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

 

Date of Report (Date of earliest event reported):  November 15, 2021

 

ACACIA RESEARCH CORPORATION

(Exact name of registrant as specified in its charter)

 

Delaware   001-37721   95-4405754
(State or other jurisdiction of   (Commission   (I.R.S. Employer
incorporation)   File Number)   Identification No.)

 

767 Third Avenue, Suite 602    
New York, NY   10017
(Address of principal executive offices)   (Zip Code)

 

(Registrant’s telephone number, including area code): (949) 480-8300

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class Trading Symbol Name of each exchange on which registered
Common Stock, par value $0.001 per share ACTG The NASDAQ Stock Market, LLC

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).     o Emerging growth company

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  o

 

     

 

 

Item 1.01. Entry into a Material Definitive Agreement.

 

On November 15, 2021, Acacia Research Corporation, a Delaware corporation (the “Company”) entered into a Note Amendment Agreement (“Note Amendment”) with Merton Acquisition HoldCo LLC (“Merton”) and Starboard Value LP (the “Designee” or “Starboard Value”), on behalf of the certain buyers (the “Starboard Funds”) of the Notes issued pursuant to the previously reported Securities Purchase Agreement (as amended and supplemented, the “Purchase Agreement”), dated as of November 18, 2019, to amend certain covenants of the notes previously issued pursuant to the Purchase Agreement to permit additional business activities of certain subsidiaries of the Company. In addition, on November 15, 2021, certain direct and indirect subsidiaries of the Company and Starboard Value Intermediate Fund LP, in its capacity as the Collateral Agent (the “Collateral Agent”) entered into a Supplement No. 5 and Amendment to the Stock Pledge Agreement (the “Pledge Amendment”) which supplements and amends that certain Stock Pledge Agreement by and among certain direct and indirect subsidiaries of the Company and the Collateral Agent, dated as of June 30, 2020 (as amended and supplemented, the “Stock Pledge”) to add a new subsidiary pledgor under the Stock Pledge.

 

The foregoing descriptions of the Note Amendment and Pledge Amendment is a summary of the material terms of such agreements, does not purport to be complete and is qualified in its entirety by reference to the Note Amendment and Pledge Amendment, which are filed as Exhibit 10.1 and Exhibit 10.2, respectively, to this Current Report on Form 8-K and are incorporated by reference herein.

 

 

Item 3.03 Material Modification to Rights of Security Holders.

 

The information set forth under Item 1.01 regarding the terms of the Note Amendment and Pledge Amendment is incorporated by reference into this Item 3.03.

 

 

Item 9.01.

Financial Statements and Exhibits.

 

(d)     Exhibits

 

Exhibit

No.

  Description of Exhibit
10.1  

Note Amendment Agreement, dated as of November 15, 2021, between Starboard Value, L.P., on behalf of the Starboard Funds, Acacia Research Corporation and Merton Acquisition Holdco LLC

10.2  

Supplement No. 5 and Amendment to the Stock Pledge Agreement, dated November 15, 2021, by and among certain direct and indirect subsidiaries of Acacia Research Corporation and Starboard Value Intermediate Fund LP, as Collateral Agent.

104     Cover Page Interactive Data File (embedded within the Inline XBRL document).

 

 

 

     

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

Dated: November 19, 2021  
  ACACIA RESEARCH CORPORATION
   
  By: /s/ Jason Soncini
  Name: Jason Soncini
  Title: General Counsel

 

 

 

Exhibit 10.1

 

Note Amendment Agreement

 

Reference is made to that certain Securities Purchase Agreement (the “Securities Purchase Agreement”), dated as of November 18, 2019 (as may be amended from time to time) by and among Acacia Research Corporation (the “Company”), Starboard Value LP (the “Designee”) and certain Buyers party thereto (collectively, the “Starboard Funds”) and those certain Notes issued by Merton Acquisition HoldCo LLC (“Merton”) pursuant to the Securities Purchase Agreement on June 4, 2020, March 31, 2021, June 30, 2021 and September 30, 2021 (collectively, the “Outstanding Notes”) in an aggregate principal amount of $180,000,000. All capitalized terms not otherwise defined shall have the meaning set forth in the Securities Purchase Agreement. The Company, Merton and the Designee on behalf of the Starboard Funds hereby agree as follows:

 

 

1. The Company, Merton and the Designee on behalf of the Starboard Funds agree to amend the terms of the Outstanding Notes as follows:

 

Section 10(g)(i) of each of the Outstanding Notes is amended and replaced by the following (additions in bold underline):

 

“(i) The Parent Guarantor shall not permit any of its Subsidiaries that are not Guarantors (“Non-Guarantor Subsidiaries”) to, directly or indirectly:

 

(1) Incur any Indebtedness (including Acquired Indebtedness) or issue any shares of Disqualified Stock, except with respect to Pixel Acquisition Holdco LLC and the subsidiaries it held as of October 7, 2021, Indebtedness that would otherwise be permitted as “Permitted Debt” under Section 10(a)(4), (9), (12), (13), (14), (15) and (18) of this Note, so long as such subsidiaries continue to remain subsidiaries of Pixel Acquisition HoldCo LLC, and the Parent Guarantor shall not permit any of the Non-Guarantor Subsidiaries to issue any shares of Preferred Stock;

 

(2) assume or guarantee any Indebtedness secured by a Lien upon any asset or property of such Non-Guarantor Subsidiary or on any evidences of Indebtedness or shares of Capital Stock of, or other ownership interests in, any Non-Guarantor Subsidiary (regardless of whether the asset, property, Indebtedness, Capital Stock or ownership interests were acquired before or after the date hereof);

 

(3) hire any employees or enter into any leases, except (i) if done by ARG in the ordinary course of business, (ii) if done by Pixel Acquisition Holdco LLC and the subsidiaries it held as of October 7, 2021, in the ordinary course of business, so long as such subsidiaries continue to remain subsidiaries of Pixel Acquisition HoldCo LLC, or (ii) if required by applicable law; and

 

(4) Except for ARG, engage in any business activities or have any material properties or liabilities, other than (i) activities related to the maintenance of its corporate existence, (ii) activities related to their ordinary course activities of purchasing Intellectual Property, (iii) activities related to their ordinary course activities of retaining legal counsel to represent such non-guarantor subsidiary as a plaintiff in Intellectual Property litigation, (iv) activities to comply with applicable law, (v) transactions among the Parent Guarantor and its Subsidiaries in their ordinary course of business, (vi) with respect to AMO Holdco LLC, Viamet Holdco LLC, Malin J1 Limited and Maudlin Holdings LLC, holding the assets and being party to those agreements listed on Schedule F of the Fourth Supplemental Agreement, and such other assets that AMO Holdco LLC, Viamet Holdco LLC and Maudlin Holdings LLC may hold as a result of dividends, distributions or similar corporate transactions that AMO Holdco LLC, Viamet Holdco LLC, Malin J1 Limited and Maudlin Holdings LLC may be entitled to as a result of holding such assets or ordinary course activities related to holding such assets, (vii) with respect to Pixel Acquisition HoldCo LLC and the subsidiaries it held as of October 7, 2021, activities related to the manufacture, sale, and servicing of impact and industrial printers, consumables, and related servicing activities, and holding subsidiaries engaged in such activities, in each case, so long as such subsidiaries continue to remain subsidiaries of Pixel Acquisition HoldCo LLC (viii) activities, liabilities and properties incidental to the foregoing clauses (i) through (iv), with all such liabilities in total not to exceed an aggregate of $5,000,000 among all non-guarantor subsidiaries as a whole and $1,000,000 for each non-guarantor subsidiary individually, excluding legal and professional fees and royalty sharing arrangements accrued in the ordinary course of the patent assertion business.”

 

2. Attached hereto as Schedule A are the direct and indirect subsidiaries of Pixel Acquisition Holdco LLC, a Delaware limited liability company.

 

 

 

 

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3. 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. 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 it 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 such suit, action or proceeding by mailing a copy thereof to such party at the address for such notices to it under the Securities Purchase Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof to the fullest extent enforceable under applicable law. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE TO, 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.

 

4. This Agreement may be executed in two or more counterparts, each of which will be deemed an original but all of which together will constitute one and the same instrument. The headings of this Agreement are for convenience of reference and shall not form part of, or affect the interpretation of, this Agreement. Counterparts may be delivered via facsimile, electronic mail (including pdf or any electronic signature complying with the U.S. federal ESIGN Act of 2000, e.g., www.docusign.com) or other transmission method and any counterpart so delivered shall be deemed to have been duly and validly delivered and be valid and effective for all purposes.

 

5. If any provision of this Agreement is prohibited by law or otherwise determined to be invalid or unenforceable by a court of competent jurisdiction, the provision that would otherwise be prohibited, invalid or unenforceable shall be deemed amended to apply to the broadest extent that it would be valid and enforceable, and the invalidity or unenforceability of such provision shall not affect the validity of the remaining provisions of this Agreement so long as this Agreement as so modified continues to express, without material change, the original intentions of the parties as to the subject matter hereof and the prohibited nature, invalidity or unenforceability of the provision(s) in question does not substantially impair the respective expectations or reciprocal obligations of the parties or the practical realization of the benefits that would otherwise be conferred upon the parties. The parties will endeavor in good faith negotiations to replace the prohibited, invalid or unenforceable provision(s) with a valid provision(s), the effect of which comes as close as possible to that of the prohibited, invalid or unenforceable provision(s).

 

 

 

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

   
   
  ACACIA RESEARCH CORPORATION
   
   
  By: /s/Richard Rosenstein
  Name: Richard Rosenstein
  Title: Chief Financial Officer
       

 

  MERTON:
   
  MERTON ACQUISITION HOLDCO LLC
   
   
  By: /s/Richard Rosenstein
  Name: Richard Rosenstein
  Title: Chief Financial Officer
       

 

  DESIGNEE:
   
  STARBOARD VALUE LP
   
   
  By: /s/Jeffrey C. Smith
  Name: Jeffrey C. Smith
  Title: Authorized Signatory
       

 

 

 

 

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Exhibit 10.2

 

SUPPLEMENT NO. 5 AND AMENDMENT TO THE STOCK PLEDGE AGREEMENT

 

SUPPLEMENT NO. 5 AND AMENDMENT dated as of November 15, 2021 (the “Supplement”), to the Stock Pledge Agreement, dated as of June 30, 2020 (as amended, restated, amended and restated, supplemented and otherwise modified from time to time, the “Stock Pledge Agreement”), among Acacia Research Group LLC, a Delaware limited liability company, Advanced Skeletal Innovations LLC, a Texas limited liability company, Saint Lawrence Communications LLC, a Texas limited liability company, Acacia Corporate Development Investment LLC, a Delaware limited liability company, AMO Holdco LLC, a Delaware limited liability company, Viamet Holdco LLC, a Delaware limited liability company, In-depth Test LLC, a Texas limited liability company, Pixel Acquisition Holdco LLC, a Delaware limited liability company, Merton Healthcare Holdco I LLC (f/k/a Merton AMW Healthcare Holdco LLC), a Delaware limited liability company, Maudlin Holdings LLC, a Delaware limited liability company and Merton Healthcare Holdco II LLC, a Delaware limited liability company (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 (as defined in the Stock Pledge Agreement), party 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”).

 

A.       Reference is made to (i) the Securities Purchase Agreement and (ii) the Note Amendment Agreement, dated as of the date hereof, by and among Acacia Research Corporation, certain direct and indirect Subsidiaries of Acacia Research Corporation and Starboard Value LP, as Designee (as defined therein) (the “Note Amendment Agreement”).

 

B.       Capitalized terms used herein and not otherwise defined herein shall have the meanings assigned to such terms in the Securities Purchase Agreement, the Note Amendment Agreement or the Stock Pledge Agreement, as applicable.

 

C.       The Pledgors entered into the Stock Pledge Agreement in order to grant to the Collateral Agent a security interest in the Collateral (as defined in the Stock Pledge Agreement) and to induce the Holders (as defined in the Stock Pledge Agreement) to extend credit evidenced by the Notes (as defined in the Stock Pledge Agreement). Pursuant to the Note Amendment Agreement, Printronix Holding Corp., a Delaware corporation (the “New Pledgor”), shall become a party to the Stock Pledge Agreement as an additional “Pledgor” under the Stock Pledge Agreement. The New Pledgor is hereby executing this Supplement in accordance with the terms of the Note Amendment Agreement and the Stock Pledge Agreement to become a “Pledgor” under the Stock Pledge Agreement in order to grant to the Collateral Agent a security interest in the Collateral (as defined in the Stock Pledge Agreement) (after giving effect to this Supplement) and to induce the Holders to extend credit evidenced by the Notes (as defined in the Stock Pledge Agreement).

 

Accordingly, the Collateral Agent, the Pledgors and the New Pledgor agree as follows:

 

Section 1. The Stock Pledge Agreement is hereby amended as follows:

 

(a) A new clause (e) shall be added to Section 7 as follows:

 

“(e) Each Pledgor covenants and agrees that it shall not transfer, exchange or otherwise dispose of any Collateral if as a result of such transfer, exchange or disposition such Collateral would constitute Pixel Foreign Equity Rights. “Pixel Foreign Equity Rights” shall mean Pixel Foreign Equity (as defined below) or any property rights in Pixel Foreign Equity, or any organizational documents of any issuer of such Pixel Foreign Equity. “Pixel Foreign Equity” shall mean any Equity Interests issued by or owned by a Pixel Foreign Subsidiary. “Pixel Foreign Subsidiary” shall mean, any subsidiary of Pixel Acquisition Holdco LLC that is organized and existing under the laws of any non-U.S. jurisdiction.”

 

 

 

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Section 2. The New Pledgor by its signature below shall become a Pledgor under the Stock Pledge Agreement (as amended hereby) with the same force and effect as if originally named therein as a Pledgor and the New Pledgor hereby (a) agrees to all the terms and provisions of the Stock Pledge Agreement applicable to it as a Pledgor thereunder and (b) represents and warrants that the representations and warranties made by it as a Pledgor thereunder are true and correct in all material respects (except that any representation and warranty that is qualified as to “materiality” or “Material Adverse Effect” shall be true and correct in all respects) on and as of the date hereof; provided that, to the extent that such representations and warranties specifically refer to any date prior to the date hereof, such representation and warranty shall be true and correct in all material respects as of such prior date (except that any representation and warranty that is qualified as to “materiality” or “Material Adverse Effect” shall be true and correct in all respects). Subject to Section 16 of the Stock Pledge Agreement, the New Pledgor hereby agrees that it is jointly and severally liable for, and absolutely and unconditionally guarantees to Holders on a non-recourse basis as set forth in Section 16 of the Stock Pledge Agreement, 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, the New Pledgor hereby pledges to Holders and grants to Holders, a security interest in, any and all right, title and interest in the Collateral (as defined in the Stock Pledge Agreement) (after giving effect to this Supplement).

 

Section 3. The New Pledgor has the requisite power and authority to enter into and perform its obligations under this Supplement, and the execution and delivery by the New Pledgor of this Supplement and the consummation by the New Pledgor of the transactions contemplated hereby have been duly authorized by the New Pledgor’s board of directors (or other applicable managing body). This Supplement has been duly executed and delivered by the New Pledgor, and constitutes the legal, valid and binding obligations of the New Pledgor, enforceable against it in accordance with its terms, except as such enforceability may be limited by general principles of equity or applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or other similar laws relating to, or affecting generally, the enforcement of applicable creditors’ rights and remedies or the laws of any non-U.S. jurisdiction.

 

Section 4. This Supplement may be executed in one or more counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument. Delivery by facsimile, .pdf or other electronic means of an executed counterpart of a signature page to this Supplement shall be effective as delivery of an original executed counterpart of this Supplement. This Supplement shall become effective as to the New Pledgor when a counterpart hereof executed on behalf of the New Pledgor shall have been delivered to the Collateral Agent and a counterpart hereof shall have been executed on behalf of the Collateral Agent, and thereafter shall be binding upon the New Pledgor and the Collateral Agent and their respective successors and permitted assigns. The Collateral Agent may also require that any such documents and signatures delivered by facsimile, .pdf or other electronic means be confirmed by a manually signed original thereof; provided that the failure to request or delivery the same shall not limit the effectiveness of any document or signature delivered by facsimile, .pdf or other electronic means.

 

Section 5. The New Pledgor and Pixel Acquisition Holdco LLC hereby represent and warrant that the schedules attached hereto and the information set forth in such schedules are correct in all material respects as of the date hereof. For the avoidance of doubt, the schedules attached hereto shall supplement the schedules to the Stock Pledge Agreement immediately prior to giving effect to this Supplement.

 

Section 6. Except as expressly supplemented and amended hereby, the Stock Pledge Agreement shall remain in full force and effect. Except as expressly set forth herein, (a) this Supplement shall not by implication or otherwise limit, impair, constitute a waiver of, or otherwise affect, the rights and remedies of the Collateral Agent or any other party under the Stock Pledge Agreement, the Securities Purchase Agreement or any other Transaction Document, and shall not alter, modify, amend or in any way affect any of the terms, conditions, obligations, covenants or agreements contained in the Stock Pledge Agreement, the Securities Purchase Agreement or any other Transaction Document, all of which are ratified and affirmed in all respects and shall continue in full force and effect (as amended pursuant to this Supplement) and (b) nothing herein shall be deemed to entitle any Pledgor to a consent to, or a waiver, amendment, modification or other change of, any of the terms, conditions, obligations, covenants or agreements contained in the Stock Pledge Agreement, the Securities Purchase Agreement or any other Transaction Document in similar or different circumstances.

 

 

 

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Section 7. Sections 15(h), (i) and (j) of the Stock Pledge Agreement are hereby incorporated by reference as if fully stated herein and shall apply to this Supplement, mutatis mutandis.

 

Section 8. If any provision of this Supplement is held to be illegal, invalid or unenforceable, the legality, validity and enforceability of the remaining provisions of this Supplement shall not be affected or impaired thereby. The invalidity of a provision in a particular jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

 

Section 9. All communications and notices hereunder shall be in writing and given as provided in Section 14 of the Stock Pledge Agreement.

 

Section 10. The New Pledgor agrees to reimburse and indemnify the Collateral Agent, on the same terms and to the same extent as provided for in Section 13 of the Stock Pledge Agreement.

 

[Signature pages follow]

 

 

 

 

 

 

 

 

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IN WITNESS WHEREOF, the Pledgors, the New Pledgor and the Collateral Agent have duly executed this Supplement to the Stock Pledge Agreement as of the day and year first above written.

 

  NEW PLEDGOR
   
  PRINTRONIX HOLDING CORP.

 

 

  By: /s/Clifford Press
  Name: Clifford Press
  Title: Chief Executive Officer

 

  767 Third Avenue, Suite 602,
  New York, NY 10017
  Attention: Jennifer Graff
  Email: jgraff@acaciares.com
  Facsimile: (949) 480-8391

 

 

 

 

 

 

 

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  EXISTING PLEDGORS
   
  ACACIA RESEARCH GROUP LLC

 

  By: /s/Marc Booth
  Name: Marc Booth
  Title: Chief Executive Officer

 

 

  ADVANCED SKELETAL
  INNOVATIONS LLC

 

  By: /s/Marc Booth
  Name: Marc Booth
  Title: Chief Executive Officer

 

 

  SAINT LAWRENCE
  COMMUNICATIONS LLC

 

  By: /s/Marc Booth
  Name: Marc Booth
  Title: Chief Executive Officer

 

 

  IN-DEPTH TEST LLC
   

 

  By: /s/Marc Booth
  Name: Marc Booth
  Title: Chief Executive Officer

 

 

  ACACIA CORPORATE
  DEVELOPMENT INVESTMENT LLC

 

  By: /s/Clifford Press
  Name: Clifford Press
  Title: Chief Executive Officer

 

 

  AMO HOLDCO LLC

 

  By: /s/Clifford Press
  Name: Clifford Press
  Title: Chief Executive Officer

 

 

 

 

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  VIAMET HOLDCO LLC

 

  By: /s/Clifford Press
  Name: Clifford Press
  Title: Chief Executive Officer

 

 

  PIXEL ACQUISITION HOLDCO LLC

 

  By: /s/Clifford Press
  Name: Clifford Press
  Title: Chief Executive Officer

 

 

  MERTON HEALTHCARE HOLDCO I LLC

 

  By: /s/Clifford Press
  Name: Clifford Press
  Title: Chief Executive Officer

 

 

  MAUDLIN HOLDINGS LLC

 

  By: /s/Clifford Press
  Name: Clifford Press
  Title: Chief Executive Officer

 

 

  MERTON HEALTHCARE
  HOLDCO II LLC

 

  By: /s/Clifford Press
  Name: Clifford Press
  Title: Chief Executive Officer

 

  767 Third Avenue, Suite 602,
  New York, NY 10017
  Attention: Jennifer Graff
  Email: jgraff@acaciares.com
  Facsimile: (949) 480-8391

 

 

  STARBOARD VALUE INTERMEDIATE FUND LP,
  as Collateral Agent


  By: /s/Jeffrey C. Smith
  Name: Jeffrey C. Smith
  Title: Authorized Signatory

 

 

 

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