ACACIA RESEARCH CORP
<DOCUMENT>
<TYPE>EX-10.8
<SEQUENCE>3
<FILENAME>acacia_ex10-8.txt
<TEXT>
<PAGE>
EXHIBIT 10.8
FIRST AMENDMENT

                                 FIRST AMENDMENT

         THIS FIRST AMENDMENT (this "Amendment") is made and entered into as of
the 26th day of June, 2000, by and between PASADENA TOWERS, L.L.C., A DELAWARE
LIMITED LIABILITY COMPANY ("Landlord"), and ACACIA RESEARCH CORPORATION, A
CALIFORNIA CORPORATION ("Tenant").

                              W I T N E S S E T H:

A.       WHEREAS, Landlord and Tenant are parties to that certain lease dated
         the 30th day of April, 1998, for space currently containing
         approximately 5,449 rentable square feet (the "Original Premises")
         described as Suite No. 650 on the 6th floor of the building commonly
         known as Pasadena Towers II and the address of which is 55 South Lake
         Avenue, Pasadena California (the "Building") (the "Lease"); and

B.       WHEREAS, Tenant has requested that additional space containing
         approximately 1,570 rentable square feet described as Suite No. 660 on
         the 6th floor of the Building shown on Exhibit A hereto (the "Expansion
         Space") be added to the Original Premises and that the Lease be
         appropriately amended and Landlord is willing to do the same on the
         terms and conditions hereinafter set forth;

         NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Landlord and Tenant agree as
follows:

I.       EXPANSION AND EFFECTIVE DATE. Effective as of the Expansion Effective
         Date (as hereinafter defined), the Premises, as defined in the Lease,
         is increased from 5,449 rentable square feet on the 6th floor to 7,019
         rentable square feet on the 6th floor(s) by the addition of the
         Expansion Space, and from and after the Expansion Effective Date, the
         Original Premises and the Expansion Space, collectively, shall be
         deemed the Premises, as defined in the Lease. The Term for the
         Expansion Space shall commence on the Expansion Effective Date and end
         on the Termination Date. The Expansion Space is subject to all the
         terms and conditions of the Lease except as expressly modified herein
         and except that Tenant shall not be entitled to receive any allowances,
         abatements or other financial concessions granted with respect to the
         Original Premises unless such concessions are expressly provided for
         herein with respect to the Expansion Space.

         A.       The Expansion Effective Date shall be the date which is 60
                  days after the date Landlord delivers the Expansion Space to
                  Tenant, which date is anticipated to be September 1, 2000 (the
                  "Target Expansion Effective Date").

         B.       The Expansion Effective Date shall be delayed to the extent
                  that Landlord fails to deliver possession of the Expansion
                  Space for any reason, including but not limited to, holding
                  over by prior occupants. Any such delay in the Expansion
                  Effective Date shall not subject Landlord to any liability for
                  any loss or damage resulting therefrom. If the Expansion
                  Effective Date is delayed, the Termination Date under the
                  Lease shall not be similarly extended.



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II.      MONTHLY BASE RENTAL.

         In addition to Tenant's obligation to pay Base Rental for the Original
         Premises, Tenant shall pay Landlord the sum of $147,187.50 as Base
         Rental for the Expansion Space in 39 monthly installments as follows:

         A.       18 equal installments of $3,689.50 each payable on or before
                  the first day of each month during the period beginning
                  September 1, 2000 and ending February 28, 2002.

         B.       21 equal installments of $3,846.50 each payable on or before
                  the first day of each month during the period beginning March
                  1, 2002 and ending November 30, 2003.

         All such Base Rental shall be payable by Tenant in accordance with the
         terms of Article IV of the Lease.

         Landlord and Tenant acknowledge that the foregoing schedule is based on
         the assumption that the Expansion Effective Date is the Target
         Expansion Effective Date. If the Expansion Effective Date is other than
         the Target Expansion Effective Date, the schedule set forth above with
         respect to the payment of any installment(s) of Base Rental for the
         Expansion Space shall be appropriately adjusted on a per diem basis to
         reflect the actual Expansion Effective Date and the actual Expansion
         Effective Date shall be set forth in a confirmation letter to be
         prepared by Landlord. However, the effective date of any increases or
         decreases in the Base Rental rate shall not be postponed as a result of
         an adjustment of the Expansion Effective Date as provided above.

III.     ADDITIONAL SECURITY DEPOSIT. Upon Tenant's execution hereof, Tenant
         shall pay Landlord the sum of $3,689.50 which is added to and becomes
         part of the Security Deposit, if any, held by Landlord as provided
         under the Lease as security for payment of Rent and the performance of
         the other terms and conditions of the Lease by Tenant. Accordingly,
         simultaneous with the execution hereof, the Security Deposit is
         increased from $13,186.58 to $16,876.08.

IV.      TENANT'S PRO RATA SHARE. For the period commencing with the Expansion
         Effective Date and ending on the Termination Date, Tenant's Pro Rata
         Share for the Expansion Space is 0.7539%.

V.       BASIC COSTS. For the period commencing with the Expansion Effective
         Date and ending on the Termination Date, Tenant shall pay for Tenant's
         Pro Rata Share of Basic Costs applicable to the Expansion Space in
         accordance with the terms of the Lease, provided, however, during such
         period, the Base Year for the computation of Tenant's Pro Rata Share of
         Basic Costs applicable to the Expansion Space is 2000.

VI.      IMPROVEMENTS TO EXPANSION SPACE.

         A.       CONDITION OF EXPANSION SPACE. Tenant has inspected the
                  Expansion Space and agrees to accept the same "as is" without
                  any agreements, representations, understandings or obligations


                                      -2-
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                  on the part of Landlord to perform any alterations, repairs or
                  improvements, except as may be expressly provided otherwise in
                  this Amendment. Landlord and Tenant hereby acknowledge that
                  the Expansion Space is currently, as of the date hereof,
                  portion of a larger suite from which the Expansion Space shall
                  be demised. Landlord, at Landlord's sole cost and expense,
                  shall (i) construct 1 demising wall within the Expansion
                  Space, (ii) perform all work deemed reasonably necessary by
                  Landlord in connection with improvements to the adjacent
                  corridor in connection with the demising of the Expansion
                  Space, (iii) relocate existing electrical service panels as
                  Landlord deems reasonably necessary in connection with the
                  demising of the Expansion Space, and (iv) separate electrical
                  circuits and HVAC systems, without cross-zoning, as Landlord
                  deems reasonably necessary in connection with the demising of
                  the Expansion Space. All other work to be performed in
                  connection with the demising of the Expansion Space shall be
                  performed by Tenant pursuant to the terms of this Article VI.

         B.       COST OF IMPROVEMENTS TO EXPANSION SPACE. Provided Tenant is
                  not in default, Tenant shall be entitled to receive an
                  improvement allowance (the "Expansion Improvement Allowance")
                  in an amount not to exceed $18,840.00 (i.e., $12.00 per
                  rentable square foot of the Expansion Space) to be applied
                  toward the cost of performing initial construction, alteration
                  or improvement of the Expansion Space, including but not
                  limited to the cost of space planning, design and related
                  architectural and engineering services. In the event the total
                  cost of the initial improvements to the Expansion Space
                  exceeds the Expansion Improvement Allowance, Tenant shall pay
                  for such excess upon demand. The entire unused balance of the
                  Expansion Improvement Allowance, if any, shall accrue to the
                  sole benefit of Landlord. Landlord shall pay such Expansion
                  Improvement Allowance directly to the contractors retained to
                  perform the construction, design or related improvement work
                  to the Expansion Space. Landlord shall be entitled to deduct
                  from the Expansion Improvement Allowance a management
                  administration fee in connection with the initial improvements
                  to the Expansion Space in an amount equal to 3% of the total
                  hard construction costs of such improvements.

         C.       RESPONSIBILITY FOR IMPROVEMENTS TO EXPANSION SPACE. Any
                  construction, alterations or improvements to the Premises
                  shall be performed by Tenant using contractors selected by
                  Tenant and approved by Landlord and shall be governed in all
                  respects by the provisions of Article X of the Lease; provided
                  that Tenant shall use the subcontractors designated by
                  Landlord in connection therewith.

VII.     EARLY ACCESS TO EXPANSION SPACE. During any period that Tenant shall be
         permitted to enter the Expansion Space prior to the Expansion Effective
         Date (e.g., to perform alterations or improvements, if any), Tenant
         shall comply with all terms and provisions of the Lease, except those
         provisions requiring payment of Base Rental or Additional Base Rental
         as to the Expansion Space. If Tenant takes possession of the Expansion
         Space prior to the Expansion Effective Date for any reason whatsoever
         (other than the performance of work in the Expansion Space with
         Landlord's prior approval), such possession shall be subject to all the
         terms and conditions of the Lease and this Amendment, and Tenant shall
         pay Base Rental and Additional Base Rental as applicable to the
         Expansion Space to Landlord on a per diem basis for each day of
         occupancy prior to the Expansion Effective Date.

                                      -3-
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VIII.    OTHER PERTINENT PROVISIONS. Landlord and Tenant agree that, effective
         as of the date hereof (unless different effective date(s) is/are
         specifically referenced in this Section), the Lease shall be amended in
         the following additional respects:

         A.       Notwithstanding anything to the contrary set forth in the
                  Lease, as of the date of this Amendment, any notices to
                  Landlord must be sent, transmitted, or delivered, as the case
                  may be, to the following addresses:
<TABLE>
<CAPTION>

                 Landlord:                                          With a copy to:
<S>                                                                 <C>
                 PASADENA TOWERS, L.L.C., A DELAWARE LIMITED        PASADENA TOWERS, L.L.C., A DELAWARE
                 LIABILITY COMPANY                                  LIMITED LIABILITY COMPANY
                 c/o Equity Office Properties Trust                 c/o EOPMC of California, Inc.
                 Two North Riverside Plaza, Suite 2200              Office of the Building Pasadena Towers
                 Chicago, Illinois  60606                           800 East Colorado Boulevard
                 Attention: Regional Counsel-Pacific Region         Suite 470
                                                                    Pasadena, California  91101
                                                                    Attention: Building Manager
</TABLE>

                  Rent (defined in Section IV.A) is payable to the order of
                  PASADENA TOWERS, L.L.C. at the following address: FILE #56184,
                  LOS ANGELES, CALIFORNIA 90074-6184.

         B.       Commencing on the Expansion Effective Date and ending on the
                  Termination Date, without reducing the number of parking
                  passes made available to Tenant with respect to the Original
                  Premises as provided in Exhibit F to the Lease, Tenant shall
                  have the right to rent up to 4 unreserved parking passes in
                  the Building parking structure in connection with Tenant's
                  lease of the Expansion Space, in accordance with the terms of
                  Exhibit F to the Lease. Tenant shall pay Landlord the
                  prevailing monthly charges established from time to time for
                  parking in the Building parking structure, payable in advance,
                  with Tenant's payment of monthly Base Rental, which rates are
                  currently, as of the date of this Amendment, $65.00 per month
                  for each unreserved parking pass.

         C.       Tenant shall also be entitled to 1 line on the building
                  directory for each 1,000 rentable square feet of the Expansion
                  Space. Tenant shall not be charged a fee for the initial
                  installation of any names on the Building directory. Tenant
                  shall, however, be required to pay Landlord's then standard
                  fee for any additional names to be added to the Building
                  directory or any replacement of previously existing names.

IX.      MISCELLANEOUS.

         A.       This Amendment sets forth the entire agreement between the
                  parties with respect to the matters set forth herein. There
                  have been no additional oral or written representations or
                  agreements. Under no circumstances shall Tenant be entitled to
                  any Rent abatement, improvement allowance, leasehold
                  improvements, or other work to the Premises, or any similar
                  economic incentives that may have been provided Tenant in
                  connection with entering into the Lease, unless specifically
                  set forth in this Amendment.

                                      -4-
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         B.       Except as herein modified or amended, the provisions,
                  conditions and terms of the Lease shall remain unchanged and
                  in full force and effect.

         C.       In the case of any inconsistency between the provisions of the
                  Lease and this Amendment, the provisions of this Amendment
                  shall govern and control.

         D.       Submission of this Amendment by Landlord is not an offer to
                  enter into this Amendment but rather is a solicitation for
                  such an offer by Tenant. Landlord shall not be bound by this
                  Amendment until Landlord has executed and delivered the same
                  to Tenant.

         E.       The capitalized terms used in this Amendment shall have the
                  same definitions as set forth in the Lease to the extent that
                  such capitalized terms are defined therein and not redefined
                  in this Amendment.

         F.       Tenant hereby represents to Landlord that Tenant has dealt
                  with no broker in connection with this Amendment other than
                  Travers Realty (the "Broker"). Tenant agrees to indemnify and
                  hold Landlord, its members, principals, beneficiaries,
                  partners, officers, directors, employees, mortgagee(s) and
                  agents, and the respective principals and members of any such
                  agents (collectively, the "Landlord Related Parties") harmless
                  from all claims of any brokers other than Broker claiming to
                  have represented Tenant in connection with this Amendment.
                  Landlord hereby represents to Tenant that Landlord has dealt
                  with no broker in connection with this Amendment. Landlord
                  agrees to indemnify and hold Tenant, its members, principals,
                  beneficiaries, partners, officers, directors, employees, and
                  agents, and the respective principals and members of any such
                  agents (collectively, the "Tenant Related Parties") harmless
                  from all claims of any brokers claiming to have represented
                  Landlord in connection with this Amendment.




                                      -5-
<PAGE>

         IN WITNESS WHEREOF, Landlord and Tenant have duly executed this
Amendment as of the day and year first above written.

                                     LANDLORD:

                                     PASADENA TOWERS, L.L.C.,
                                     A DELAWARE LIMITED LIABILITY COMPANY

                                     By: EOP-Pasadena Towers, L.L.C., a
                                         Delaware limited liability company, its
                                         administrative managing member

                                     By: EOP Operating Limited Partnership, a
                                         Delaware limited partnership, its sole
                                         member

                                         By: Equity Office Properties Trust, a
                                             Maryland real estate investment
                                             trust, its managing general partner


                                         By: /s/ Robert E. Dezzutti
                                             -----------------------------------
                                         Name: Robert E. Dezzutti
                                              ----------------------------------
                                         Title: Vice President
                                               ---------------------------------


                                     TENANT:

                                     ACACIA RESEARCH CORPORATION,
                                     A CALIFORNIA CORPORATION

                                     By: /s/ Peter Frank
                                        ----------------------------------------
                                     Name: Peter Frank
                                          --------------------------------------
                                     Title: COO & CFO
                                           -------------------------------------

                                     By:
                                        ----------------------------------------
                                     Name:
                                          --------------------------------------
                                     Title:
                                           -------------------------------------



                                      -6-
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                                    EXHIBIT A

                                Attach Floor Plan

                             Showing Expansion Space








                                      -7-

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