EXHIBIT
4.2  
 RIGHTS
AGREEMENT   Dated
as of July 31, 2008   between   DIGIMARC
CORPORATION   and   COMPUTERSHARE
TRUST COMPANY, N.A.,  as
Rights Agent


CONTENTS  SECTION 1.
  CERTAIN DEFINITIONS
  1SECTION 2.
  APPOINTMENT OF RIGHTS AGENT
  7SECTION 3.
  ISSUANCE OF RIGHTS AND RIGHTS CERTIFICATES
  8SECTION 4.
  FORM OF RIGHTS CERTIFICATES
  9SECTION 5.
  EXECUTION, COUNTERSIGNATURE AND REGISTRATION
  10SECTION 6.
  TRANSFER, SPLIT-UP, COMBINATION AND EXCHANGE OF
  RIGHTS CERTIFICATES; LOST, STOLEN, DESTROYED OR MUTILATED RIGHTS
  CERTIFICATES; UNCERTIFICATED RIGHTS
  11SECTION 7.
  EXERCISE OF RIGHTS; EXPIRATION DATE OF RIGHTS
  12SECTION 8.
  CANCELLATION AND DESTRUCTION OF RIGHTS CERTIFICATES
  14SECTION 9.
  RESERVATION AND AVAILABILITY OF PREFERRED SHARES
  14SECTION 10.
  PREFERRED SHARES RECORD DATE
  16SECTION 11.
  ADJUSTMENTS IN RIGHTS AFTER THERE IS AN ACQUIRING
  PERSON; EXCHANGE OF RIGHTS FOR SHARES; BUSINESS COMBINATIONS
  16SECTION 12.
  CERTAIN ADJUSTMENTS
  20SECTION 13.
  CERTIFICATE OF ADJUSTMENT
  21SECTION 14.
  ADDITIONAL COVENANTS
  22SECTION 15.
  FRACTIONAL RIGHTS AND FRACTIONAL SHARES
  22SECTION 16.
  RIGHTS OF ACTION
  23SECTION 17.
  AGREEMENT OF RIGHTS HOLDERS
  24SECTION 18.
  RIGHTS CERTIFICATE HOLDER NOT DEEMED A SHAREHOLDER
  25SECTION 19.
  CONCERNING THE RIGHTS AGENT
  25SECTION 20.
  MERGER OR CONSOLIDATION OR CHANGE OF NAME OF RIGHTS
  AGENT
  26SECTION 21.
  RIGHTS AND DUTIES OF RIGHTS AGENT
  26SECTION 22.
  CHANGE OF RIGHTS AGENT
  29SECTION 23.
  ISSUANCE OF ADDITIONAL RIGHTS AND RIGHTS
  CERTIFICATES
  30SECTION 24.
  REDEMPTION AND TERMINATION
  30SECTION 25.
  NOTICES
  31


SECTION 26.
  SUPPLEMENTS AND AMENDMENTS
  32SECTION 27.
  SUCCESSORS
  33SECTION 28.
  BENEFITS OF THIS RIGHTS AGREEMENT; DETERMINATIONS
  AND ACTIONS BY THE COMPANYS BOARD OF DIRECTORS
  33SECTION 29.
  SEVERABILITY
  34SECTION 30.
  GOVERNING LAW
  34SECTION 31.
  COUNTERPARTS
  34SECTION 32.
  DESCRIPTIVE HEADINGS
  34SECTION 33.
  FORCE MAJEURE
  34


RIGHTS AGREEMENT  RIGHTS
AGREEMENT, dated as of July 31, 2008 between Digimarc Corporation, a
Delaware corporation formerly known as DMRC Corporation (the Company), and Computershare Trust
Company, N.A., a federally chartered trust company, as Rights Agent (the Rights Agent).  Subjectto the completion of the merger of DMRC LLC with and into the Company,
its wholly-owned subsidiary, with the Company being the surviving company in
the merger (the DMRC Merger), the Board of Directors of the Company
(the Board of Directors) has
authorized and declared a dividend of one Right (as hereinafter defined) for
each share of common stock, $0.001 par value per share, of the Company (the Common Stock)outstanding at the Close of Business (as
hereinafter defined) on August 1, 2008 (the Record
Date).  The Board of
Directors has further authorized the issuance of one Right (as such number may
be hereinafter adjusted pursuant to the provisions of this Rights Agreement)
with respect to each share of Common Stock that shall become outstanding
between the Record Date and the earliest of the Distribution Date, the
Redemption Date and the Expiration Date (as such terms are hereinafter
defined); provided, however, that the Company may
issue Rights with respect to shares of Common Stock that shall become
outstanding after the Distribution Date and prior to the earlier of the
Redemption Date and the Expiration Date in accordance with the provisions of Section 23
hereof.  Each Right shall initially
represent the right to purchase one one-hundredth (1/100) of a share of Series R
Participating Cumulative Preferred Stock, $0.001 par value per share, of the
Company (the Preferred Shares), having
the powers, rights and preferences set forth in the Certificate of Designation
(as hereinafter defined) attached as Exhibit A hereto.  Accordingly,
in consideration of the premises and the mutual agreements set forth in this
Rights Agreement, the Company and the Rights Agent hereby agree as follows:  SECTION 1.CERTAIN DEFINITIONS  For
purposes of this Rights Agreement, the following terms have the meanings
indicated:  Acquiring Person shall mean any
Person (as hereinafter defined) who or which, alone or together with all
Affiliates and Associates (as such terms are hereinafter defined) of such
Person, shall be the Beneficial Owner (as hereinafter defined) of 15% or more
of the Common Shares (as hereinafter defined) then outstanding, but shall not
include:  (a) the Company, (b) any
Subsidiary (as hereinafter defined) of the Company, (c) any employee
benefit or compensation plan of the Company or of any of its Subsidiaries or
any Person holding Common Shares for or pursuant to the terms of any such
employee benefit or compensation plan or (d) any Person who has become and
is the Beneficial Owner of 15% or more of the Common Shares outstanding at the
time solely as the result of (i) a change in the aggregate number of
Common Shares outstanding since the last date on which such Person acquired
Beneficial Ownership of any Common Shares, (ii) the acquisition by such
Person or one or more of its Affiliates or Associates of Beneficial Ownership
of additional Common  1


Shares if such acquisition was made in the good faith
belief that such acquisition would not (A) cause the Beneficial Ownership
by such Person, together with its Affiliates and Associates, to equal or exceed
15% of the Common Shares outstanding at the time of such acquisition and such
good faith belief was based on the good faith reliance on information contained
in publicly filed reports or documents of the Company that are inaccurate or
out-of-date or (B) otherwise cause a Distribution Date or the adjustment
provided for in Section 11(a) hereof to occur or (iii) the acquisition
by such Person or one or more of its Affiliates or Associates of Beneficial
Ownership of additional Common Shares if the Board of Directors determines that
such acquisition was made in good faith without the knowledge by such Person or
Affiliates or Associates that such Person would thereby become an Acquiring
Person (which determination of the Board of Directors of the Company shall be
conclusive and binding on such Person, the Rights Agent, the holders of the
Rights and all other Persons).  Notwithstanding
clause (d)(ii) or (d)(iii) of the prior sentence, if any Person
that is not an Acquiring Person due to such clause (d)(ii) or (d)(iii) does
not reduce its percentage of Beneficial Ownership of Common Shares to less than
15% by the Close of Business on the tenth calendar day after notice from the
Company (the date of notice being the first day) that such Persons Beneficial
Ownership of Common Shares would make it an Acquiring Person, such Person
shall, at the end of such ten calendar day period, become an Acquiring Person
(and such clause (d)(ii) or (d)(iii) shall no longer apply to such
Person).  For purposes of this
definition, the determination whether any Person acted in good faith shall be
conclusively determined by the Board of Directors.  Affiliate and Associate,
when used with reference to any Person, shall have the respective meanings
ascribed to such terms in Rule 12b-2 of the General Rules and
Regulations under the Exchange Act (as hereinafter defined), as in effect on
the date of this Rights Agreement.  A
Person shall be deemed to be the Beneficial Owner
of, to Beneficially Own, and to
have Beneficial Ownership of, any
securities:  (a)that such Person or any of such Persons
Affiliates or Associates is deemed to Beneficially Own within the meaning of Rule 13d-3
of the General Rules and Regulations under the Exchange Act, as in effect
on the date of this Rights Agreement;  (b)that such Person or any of such Persons
Affiliates or Associates has (i) the right to acquire (whether such right
is exercisable immediately or only after the passage of time) pursuant to any
agreement, arrangement or understanding (written or oral), or upon the exercise
of conversion rights, exchange rights, rights (other than the Rights), warrants
or options, or otherwise; provided, however,
that a Person shall not be deemed to be the Beneficial Owner of, to
Beneficially Own, or to have Beneficial Ownership of, any securities tendered
pursuant to a tender or exchange offer made by or on behalf of such Person or
any of such Persons Affiliates or Associates until such tendered securities
are accepted for purchase or exchange thereunder or (ii) the right to vote
pursuant to any agreement, arrangement or understanding (written or oral); provided, however, that a Person shall not be deemed to be
the Beneficial Owner of, to Beneficially Own, or to have Beneficial Ownership
of, any security if (A) the agreement, arrangement or understanding  2


(written or oral) to vote such security arises solely
from a revocable proxy or consent given to such Person in response to a public
proxy or consent solicitation made pursuant to, and in accordance with, the
applicable rules and regulations under the Exchange Act and (B) the
beneficial ownership of such security is not also then reportable on
Schedule 13D under the Exchange Act (or any comparable or successor
report); or  (c)that are Beneficially Owned, directly or
indirectly, by any other Person with which such Person or any of such Persons
Affiliates or Associates has any agreement, arrangement or understanding
(written or oral) for the purpose of acquiring, holding, voting (except
pursuant to a revocable proxy as described in clause (b)(ii) of this
definition) or disposing of any securities of the Company.  Notwithstanding
the foregoing, nothing contained in this definition shall cause a Person
ordinarily engaged in business as an underwriter of securities to be the Beneficial
Owner of, or to Beneficially Own, any securities acquired in a bona fide
firm commitment underwriting pursuant to an underwriting agreement with the
Company.  Notwithstanding
anything in this definition to the contrary, the phrase then outstanding,
when used with reference to a Persons Beneficial Ownership of securities of
the Company, shall mean the number of such securities then issued and
outstanding, together with the number of such securities not then actually
issued and outstanding which such Person would be deemed to own beneficially
hereunder.  Book Value, when used with
reference to Common Shares issued by any Person, shall mean the amount of such
Persons equity applicable to each Common Share, determined (a) in
accordance with generally accepted accounting principles in effect on the date
as of which such Book Value is to be determined, (b) using all the
consolidated assets and all the consolidated liabilities of such Person on the
date as of which such Book Value is to be determined, except that no value
shall be included in such assets for goodwill arising from completion of a
business combination, and (c) after giving effect to (i) the exercise
of all rights, options and warrants to purchase such Common Shares (other than
the Rights), and the conversion of all securities convertible into such Common
Shares, at an exercise or conversion price per Common Share that is less than
such Book Value before the exercise or conversion (whether or not
exercisability or convertibility is conditioned upon occurrence of a future
event), (ii) all dividends and other distributions on the capital stock of
such Person declared prior to the date as of which such Book Value is to be
determined and to be paid or made after such date, and (iii) any other
agreement, arrangement or understanding (written or oral), transaction or other
action prior to the date as of which such Book Value is to be determined that
would have the effect of thereafter reducing such Book Value.  Business Combination shall have the
meaning set forth in Section 11(c)(i) hereof.  Business Day shall mean any day
other than a Saturday, Sunday or a day on which banking institutions in the
Commonwealth of Massachusetts are authorized or obligated by law or executive
order to close.  3


Certificate of Designation shall
mean the Certificate of Designation of Series R Participating Cumulative
Preferred Stock setting forth the powers, preferences, rights, qualifications,
limitations and restrictions of such series of Preferred Stock of the Company,
a form of which is attached to this Rights Agreement as Exhibit A.  Close of Business on any given date
shall mean 5:00 p.m., Boston, Massachusetts time, on such date; provided, however, that if such date is not a Business Day, Close
of Business shall mean 5:00 p.m., Boston, Massachusetts time, on the next
succeeding Business Day.  Common Shares, when used with
reference to the Company prior to a Business Combination, shall mean the shares
of Common Stock of the Company or any other shares of capital stock of the
Company into which the Common Stock shall be reclassified or changed.  Common Shares, when used with reference to
any Person (other than the Company prior to a Business Combination), shall mean
shares of capital stock of such Person (if such Person is a corporation) of any
class or series, or units of equity interests in such Person (if such Person is
not a corporation) of any class or series, the terms of which (i) do not
limit (as a maximum amount and not merely in proportional terms) the amount of
dividends or income payable or distributable on such class or series or the
amount of assets distributable on such class or series upon any voluntary or
involuntary liquidation, dissolution or winding up of such Person and (ii) do
not provide that such class or series is subject to redemption at the option of
such Person, or any shares of capital stock or units of equity interests into
which the foregoing shall be reclassified or changed; provided,
however, that, if at any time there shall be more than one such
class or series of capital stock or equity interests of such Person, Common
Shares of such Person shall include all such classes and series substantially
in the proportion of the total number of shares or other units of each such
class or series outstanding at such time.  Common Stock shall have the meaning
set forth in the second paragraph of this Rights Agreement.  Company shall have the meaning set
forth in the introductory paragraph of this Rights Agreement; provided, however, that if there is a Business Combination, Company
shall have the meaning set forth in Section 11(c)(iii) hereof.  control with respect to any Person
shall mean the power to direct the management and policies of such Person,
directly or indirectly, by or through stock ownership, agency or otherwise, or
pursuant to or in connection with an agreement, arrangement or understanding
(written or oral) with one or more other Persons by or through stock ownership,
agency or otherwise.  The term controlled
shall have meaning correlative to the foregoing.  Distribution Date shall have the
meaning set forth in Section 3(b).  Exchange Act shall mean the
Securities Exchange Act of 1934, as amended and in effect on the date in
question, unless otherwise specifically provided in this Rights Agreement.  4


Exchange Consideration shall have
the meaning set forth in Section 11(b)(i).  Expiration Date shall have the
meaning set forth in Section 7(a) hereof.  Formula Number shall have the
meaning set forth in the Certificate of Designation.  Major Part, when used with
reference to the assets of the Company and its Subsidiaries as of any date,
shall mean assets (a) having a fair market value aggregating 50% or more
of the total fair market value of all the assets of the Company and its
Subsidiaries (taken as a whole) as of the date in question, (b) accounting
for 50% or more of the total value (net of depreciation and amortization) of
all the assets of the Company and its Subsidiaries (taken as a whole) as would
be shown on a consolidated or combined balance sheet of the Company and its
Subsidiaries as of the date in question, prepared in accordance with generally
accepted accounting principles then in effect, or (c) accounting for 50%
or more of the total amount of net income or revenues of the Company and its
Subsidiaries (taken as a whole) as would be shown on or derived from a
consolidated or combined statement of income of the Company and its
Subsidiaries for the period of 12 months ending on the last day of the Companys
monthly accounting period next preceding the date in question, prepared in
accordance with generally accepted accounting principles then in effect.  Market Value, when used with
reference to any securities on any date, shall mean the average of the daily
per share closing prices of such securities for the period that is the shorter
of (a) 30 consecutive Trading Days (as hereinafter defined) immediately
prior to (but not including) the date in question and (b) the number of
consecutive Trading Days beginning on the Trading Day immediately after the
date of the first public announcement of the event requiring a determination of
the Market Value and ending on the Trading Day immediately prior to but not
including the record date of such event; provided, however,
that, in the event that the Market Value of such securities is to be determined
in whole or in part during a period following the announcement by the issuer of
such securities of any action of the type described in Section 12(a) hereof
that would require an adjustment thereunder, then, and in each such case, the
Market Value of such securities shall be appropriately adjusted to reflect the
effect of such action on the market price of such securities.  The closing price for each Trading Day shall
be the closing price quoted on the principal United States securities exchange
registered under the Exchange Act (or any recognized foreign stock exchange) on
which such securities are listed, or if such securities are not listed on any
such exchange, the average of the closing bid and asked quotations with respect
to a share of such securities on the Nasdaq Stock Market or such other system
then in use or, if no such quotations are available, the average of the closing
bid and asked prices as furnished by a professional market maker making a
market in such securities selected by the Companys Board of Directors.  If on any such Trading Day no market maker is
making a market in such securities, the closing price of such securities on
such Trading Day shall be deemed to be the fair value of such securities as
determined in good faith by the Companys Board of Directors (whose
determination shall be described in a statement filed with the Rights Agent and
shall be binding on the Rights Agent, the holders of Rights and all other
Persons); provided,  5


however, that for the purpose of determining the closing
price of the Preferred Shares for any Trading Day on which there is no public
market for the Preferred Shares or there is no such market maker for the
Preferred Shares, the closing price on such Trading Day shall be deemed to be
the Formula Number times the closing price of the Common Stock on such Trading
Day.  Person shall mean an individual,
firm, corporation, partnership, limited liability company, joint venture,
association, trust, unincorporated organization or other entity and shall
include any successor (by merger or otherwise) thereof or thereto.  Preferred Shares shall have the
meaning set forth in the second paragraph of this Rights Agreement.  Any reference in this Rights Agreement to
Preferred Shares shall be deemed to include any authorized fraction of a
Preferred Share, unless the context otherwise requires.  Principal Party shall mean the
Surviving Person (as hereinafter defined) in a Business Combination; provided, however, that if such Surviving Person is a direct
or indirect Subsidiary of any other Person, Principal Party shall mean the
Person which is the ultimate parent of such Surviving Person and which is not
itself a Subsidiary of another Person. 
In the event ultimate control of such Surviving Person is shared by two
or more Persons, Principal Party shall mean that Person which is immediately
controlled by such two or more Persons.  Purchase Price with respect to each
Right shall mean $100.00, subject to adjustment as provided herein, and shall
be payable in lawful money of the United States of America.  All references herein to the Purchase Price
shall mean the Purchase Price as in effect at the time in question.  Record Date shall have the meaning
set forth in the second paragraph of this Rights Agreement.  Redemption Date shall have the
meaning set forth in Section 24(a) hereof.  Redemption Price with respect to
each Right shall mean $0.001, as such amount may from time to time be adjusted
in accordance with Section 12 hereof. 
All references in this Rights Agreement to the Redemption Price shall
mean the Redemption Price as in effect at the time in question.  Registered Common Shares shall mean
Common Shares that are, as of the date of completion of a Business Combination,
and have continuously been for the 12 months immediately preceding such
date, registered under Section 12 of the Exchange Act.  Right shall mean the right to
purchase Preferred Shares (or other securities) as provided in this Rights
Agreement.  Rights Agent shall (a) have
the meaning set forth in the introductory paragraph of this Rights Agreement, (b) mean
any successor or replacement to Computershare Trust  6


Company, N.A. as provided in Sections 20 and 22,
or (c) mean any additional Person appointed pursuant to Section 2.  Rights Certificate shall mean a
certificate evidencing a Right in substantially the form attached to this
Rights Agreement as Exhibit B.  Securities Act shall mean the
Securities Act of 1933, as amended and in effect on the date in question,
unless otherwise specifically provided in this Rights Agreement.  Shares Acquisition Date shall mean
the first date of public announcement by the Company or an Acquiring Person
that an Acquiring Person has become such.  Subsidiary shall mean a Person, at
least a majority of the total outstanding voting power (being the power under
ordinary circumstances and not merely upon the happening of a contingency) to
vote in the election of directors of such Person (if such Person is a
corporation) or to participate in the management and control of such Person (if
such Person is not a corporation) of which is owned, directly or indirectly, by
another Person or by one or more other subsidiaries of such other Person or by
such other Person or by one or more other subsidiaries of such other Person.  Summary of Rights shall mean the
Summary of Rights to Purchase Preferred Shares in substantially the form of Exhibit C
attached hereto.  Surviving Person shall mean (a) the
Person which is the continuing or surviving Person in a consolidation or merger
specified in Section 11(c)(i)(A) or 11(c)(i)(B) hereof or (b) the
Person to which the Major Part of the assets of the Company and its
Subsidiaries is sold, leased, exchanged or otherwise transferred or disposed of
in a transaction specified in Section 11(c)(i)(C) hereof; provided, however, that if the Major Part of the assets
of the Company and its Subsidiaries is sold, leased, exchanged or otherwise
transferred or disposed of in one or more related transactions specified in Section 11(c)(i)(C) hereof
to more than one Person, the Surviving Person in such case shall mean the
Person that acquired assets of the Company and/or its Subsidiaries with the
greatest fair market value in such transaction or transactions.  Trading Day shall mean a day on
which the principal national securities exchange (or principal recognized
foreign stock exchange, as the case may be) on which any securities or Rights,
as the case may be, are listed or admitted to trading is open for the
transaction of business or, if the securities or Rights in question are not
listed or admitted to trading on any national securities exchange (or
recognized foreign stock exchange, as the case may be), a Business Day.  SECTION 2.APPOINTMENT OF RIGHTS AGENT  The
Company hereby appoints the Rights Agent to act as agent for the Company in
accordance with the terms and conditions of this Rights Agreement, and the
Rights Agent hereby accepts such appointment. 
The Company may from time to time appoint one or more co-Rights Agents
as it may deem necessary or desirable upon ten (10) days prior written  7


notice thereof to the Rights Agent.  Notwithstanding the foregoing, the Rights
Agent shall have no duty to supervise, and in no event shall be liable for, the
acts or omissions of any such co-Rights Agent.  SECTION 3.ISSUANCE OF RIGHTS AND RIGHTS
CERTIFICATES  (a)One Right shall be associated with each
share of Common Stock outstanding on the Record Date, each additional share of
Common Stock that shall become outstanding between the Record Date and the
earliest of the Distribution Date, the Redemption Date and the Expiration Date
and each additional share of Common Stock with which Rights are issued after
the Distribution Date but prior to the earlier of the Redemption Date and the
Expiration Date as provided in Section 23 hereof; provided,
however, that if the number of outstanding Rights are combined into
a smaller number of outstanding Rights pursuant to Section 12(a) hereof,
the appropriate fractional Right determined pursuant to such Section shall
thereafter be associated with each such share of Common Stock.  (b)Until the earlier of (i) the Close
of Business on the tenth Business Day after the Shares Acquisition Date and (ii) the
Close of Business on such date, if any, as may be designated by the Companys
Board of Directors following the commencement of, or first public disclosure of
an intent to commence, a tender or exchange offer by any Person (other than the
Company, any Subsidiary of the Company, any employee benefit plan of the
Company or of any of its Subsidiaries, or any Person holding Common Stock for
or pursuant to the terms of any such employee benefit plan) for outstanding
Common Stock, if upon consummation of such tender or exchange offer such Person
could be the Beneficial Owner of 15% or more of the outstanding Common Stock
(the Close of Business on the earlier of the dates set forth in (i) and (ii) being
the Distribution Date), (x) the
Rights will be evidenced by the certificates for Common Stock registered in the
names of the holders thereof and not by separate Rights Certificates and (y) the
Rights, including the right to receive Rights Certificates, will be
transferable only in connection with the transfer of Common Stock.  The Company will notify the Rights Agent in
writing as promptly as practicable that a Distribution Date has occurred and,
if such notification is given orally, the Company shall confirm the same in
writing on or prior to the next Business Day. 
Until such notice is received by the Rights Agent, the Rights Agent may
presume conclusively for all purposes that the Distribution Date has not
occurred.  As soon as practicable after
the Distribution Date, the Company will prepare and execute, the Rights Agent
will countersign, and the Company will deliver or cause to be sent by
first-class, postage-prepaid mail, to each record holder of Common Stock as of
the Distribution Date, at the address of such holder shown on the records of
the Company, a Rights Certificate evidencing one whole Right for each share of
Common Stock (or for the number of shares of Common Stock with which one whole
Right is then associated if the number of Rights per share of Common Stock held
by such record holder has been adjusted in accordance with the proviso in Section 3(a) hereof).  If the number of Rights associated with each
share of Common Stock has been adjusted in accordance with the proviso in Section 3(a) hereof,
at the time of distributing the Rights Certificates the Company may make any
necessary and appropriate rounding adjustments so that Rights Certificates
representing only whole numbers of Rights are distributed and cash is paid in
lieu of any fractional Right in accordance with Section 15(a) hereof.  The Company  8


will notify the Rights Agent in writing as promptly as
practicable of any such adjustments.  As
of and after the Distribution Date, the Rights will be evidenced solely by such
Rights Certificates.  (c)As soon as practicable, and in any event
no later than 30 days after the Record Date, the Company will send a copy
of a Summary of Rights, by first-class, postage-prepaid mail, to each record
holder of Common Stock as of the Close of Business on the Record Date at the
address of such holder shown on the records of the Company.  With respect to certificates for Common Stock
outstanding as of the Record Date, until the earliest of the Distribution Date,
the Redemption Date and the Expiration Date, (i) the Rights will be evidenced
by such certificates registered in the names of the holders thereof, together
with a copy of the Summary of Rights attached thereto, and the registered
holders of the Common Stock shall also be the registered holders of the
associated Rights, and (ii) the surrender for transfer of any such
certificate, even without a copy of the Summary of Rights attached thereto,
shall also constitute the transfer of the Rights associated with the Common
Stock represented thereby.  (d)Certificates representing Common Stock
issued after the Record Date (including, without limitation, upon transfer or
exchange of outstanding Common Stock), but prior to the earliest of the
Distribution Date, the Redemption Date and the Expiration Date, shall have
printed on, written on or otherwise affixed to them substantially the following
legend:  This certificate also
evidences and entitles the holder hereof to certain rights as set forth in the
Rights Agreement dated as of July 31, 2008 as it may be amended or
supplemented from time to time (the Rights Agreement), between Digimarc
Corporation (Digimarc) and Computershare Trust Company, N.A. (or any
successor thereto), as Rights Agent (or between Digimarc and any successor
Rights Agent under the Rights Agreement), the terms of which are hereby
incorporated herein by reference and a copy of which is on file at the
principal executive offices of Digimarc. 
Under certain circumstances, as set forth in the Rights Agreement, such
Rights will be evidenced by separate certificates and will no longer be
evidenced by this certificate.  Digimarc
will mail to the holder of this certificate a copy of the Rights Agreement
without charge after receipt of a written request therefor.  Rights Beneficially Owned by Acquiring
Persons or their Affiliates or Associates (as such terms are defined in the
Rights Agreement) and by any subsequent holder of such Rights are null and void
and nontransferable.  Notwithstanding
the requirements of this paragraph (d), neither the omission of this
legend nor the inclusion of a legend that refers to a rights agreement other
than the Rights Agreement shall affect the enforceability of any part of this
Rights Agreement or the rights of any holder of Rights.  SECTION 4.FORM OF RIGHTS CERTIFICATES  The
Rights Certificates (and the form of election to purchase and form of
assignment to be printed on the reverse side thereof) shall be in substantially
the form set forth as  9


Exhibit B and may have such marks of
identification or designation and such legends, summaries or endorsements
printed thereon as the Company may deem appropriate and as are not inconsistent
with the provisions of this Rights Agreement and which do not affect the
rights, duties or responsibilities of the Rights Agent, or as may be required
to comply with any applicable law or with any rule or regulation made
pursuant thereto or with any rule or regulation of any stock exchange on
which the Rights may from time to time be listed, or to conform to usage.  Subject to the provisions of Sections 7,
11 and 23 hereof, the Rights Certificates, whenever issued, shall be dated as
of the Distribution Date, and on their face shall entitle the holders thereof
to purchase such number of Preferred Shares as shall be set forth therein for
the Purchase Price set forth therein, subject to adjustment from time to time
as herein provided.  SECTION 5.EXECUTION, COUNTERSIGNATURE AND
REGISTRATION  (a)The Rights Certificates shall be executed
on behalf of the Company by the Chief Executive Officer, the President, the
Chief Financial Officer, the Treasurer or a Vice President (whether preceded by
any additional title) of the Company, either manually or by facsimile
signature, and shall have affixed thereon the Companys seal or a facsimile
thereof, if any, which shall be attested by the Secretary, an Assistant
Secretary or a Vice President (whether preceded by any additional title,
provided that such Vice President shall not have also executed the Rights
Certificates) of the Company, either manually or by facsimile signature.  The Rights Certificates shall be
countersigned by the Rights Agent, either manually or by facsimile signature,
and shall not be valid for any purpose unless so countersigned.  In case any officer of the Company who shall
have signed any of the Rights Certificates shall cease to be such an officer of
the Company before countersignature by the Rights Agent and issuance and
delivery by the Company, such Rights Certificates may nevertheless be
countersigned by the Rights Agent and issued and delivered by the Company with
the same force and effect as though the person who signed such Rights
Certificates had not ceased to be such an officer of the Company, and any
Rights Certificate may be signed on behalf of the Company by any person who, at
the actual date of execution of such Rights Certificate, shall be a proper
officer of the Company to sign such Rights Certificate, although at the date of
execution of this Rights Agreement any such person was not such an officer of
the Company.  (b)Following the Distribution Date and
receipt by the Rights Agent of (i) written notice of the occurrence of the
Distribution Date pursuant to Section 3(b), and (ii) all necessary
information requested by the Rights Agent pursuant to Section 3(b), the
Rights Agent will keep or cause to be kept, at its office designated for such
purpose, books for registration and transfer of the Rights Certificates issued
under this Rights Agreement.  Such books
shall show the names and addresses of the respective holders of the Rights
Certificates, the number of Rights evidenced by each Rights Certificate, the
certificate number of each Rights Certificate and the date of each Rights
Certificate.  10


SECTION 6.TRANSFER, SPLIT-UP, COMBINATION
AND EXCHANGE OF RIGHTS CERTIFICATES; LOST, STOLEN, DESTROYED OR MUTILATED
RIGHTS CERTIFICATES; UNCERTIFICATED RIGHTS  (a)Subject to the provisions of
Sections 7(e), 11 and 15 hereof, at any time after the Distribution Date,
and at or prior to the Close of Business on the earlier of the Redemption Date
and the Expiration Date, any Rights Certificate or Rights Certificates (other
than Rights Certificates representing Rights that have become null and void
pursuant to Section 7(e) hereof or that have been exchanged pursuant
to Section 11(b) hereof) may be transferred, split up, combined or
exchanged for another Rights Certificate or Rights Certificates entitling the
registered holder to purchase a like number of one one-hundredths of a
Preferred Share as the Rights Certificate or Rights Certificates surrendered
then entitled such holder to purchase. 
Any registered holder desiring to transfer, split up, combine or
exchange any Rights Certificate or Rights Certificates shall make such request
in writing delivered to the Rights Agent and shall surrender the Rights
Certificate or Rights Certificates to be transferred, split up, combined or
exchanged at the office of the Rights Agent designated for such purpose.  The Rights Certificates are transferable only
on the registry books of the Rights Agent. 
Neither the Rights Agent nor the Company shall be obligated to take any
action whatsoever with respect to the transfer of any Rights Certificate surrendered
for transfer until the registered holder shall have properly completed and
signed the certification contained in the form of assignment on the reverse
side of such Rights Certificate and shall have provided such additional
evidence of the identity of the Beneficial Owner (or former Beneficial Owner)
or Affiliates or Associates thereof as the Company or the Rights Agent shall
reasonably request.  Thereupon the Rights
Agent shall, subject to the provisions of Sections 7(e), 11 and 15 hereof,
countersign and deliver to the Person entitled thereto a Rights Certificate or
Rights Certificates, as the case may be, as so requested.  The Company or the Rights Agent may require
payment from a Rights holder of a sum sufficient to cover any tax or governmental
charge that may be imposed in connection with any transfer, split-up,
combination or exchange of Rights Certificates.  The
Rights Agent shall have no duty or obligation to take any action under this Section 6
or under any Section of this Rights Agreement which requires the payment
by a Rights holder of applicable taxes or governmental charges unless and until
it is satisfied that all such taxes and/or charges have been paid in full.  (b)Upon receipt by the Company and the
Rights Agent of evidence reasonably satisfactory to them of the loss, theft,
destruction or mutilation of a valid Rights Certificate, and, in case of such
loss, theft or destruction, of indemnity or security satisfactory to them, and,
at the Companys or Rights Agents request, reimbursement to the Company and
the Rights Agent of all reasonable expenses incidental thereto, and upon
surrender to the Rights Agent and cancellation of the Rights Certificate if
mutilated, the Company will make a new Rights Certificate of like tenor and
deliver such new Rights Certificate to the Rights Agent for countersignature
and delivery to the registered holder in lieu of the Rights Certificate so
lost, stolen, destroyed or mutilated.  11


(c)Notwithstanding any other provision of
this Rights Agreement to the contrary, the Company and the Rights Agent may
amend this Rights Agreement to provide for uncertificated Rights in addition to
or in place of Rights evidenced by Rights Certificates.  SECTION 7.EXERCISE OF RIGHTS; EXPIRATION
DATE OF RIGHTS  (a)Subject to Section 7(e) hereof
and except as otherwise provided in this Rights Agreement (including Section 11
hereof), each Right shall entitle the registered holder thereof, upon exercise
thereof as provided in this Rights Agreement, to purchase for the Purchase
Price, at any time after the Distribution Date and at or prior to the earlier
of (i) the Close of Business on the 10th anniversary of the date of this
Rights Agreement (the Close of Business on such date being the Expiration Date) and (ii) the
Redemption Date, one one-hundredth (1/100) of a Preferred Share, subject to
adjustment from time to time as provided in Sections 11 and 12 hereof.  (b)The registered holder of any Rights
Certificate may exercise the Rights evidenced thereby (except as otherwise
provided in this Rights Agreement) in whole or in part at any time after the
Distribution Date, upon surrender of the Rights Certificate with the form of
election to purchase on the reverse side thereof duly executed, to the Rights
Agent at the office of the Rights Agent designated for such purpose, together
with payment of the Purchase Price for each one one-hundredth (1/100)of a Preferred Share as to which the Rights are exercised,
at or prior to the earliest of (i) the Expiration Date, (ii) the
Redemption Date, and (iii) the time at which such Rights are exchanged as
provided in Section 11(b) hereof.  (c)Upon receipt of a Rights Certificate
representing exercisable Rights, with the form of election to purchase duly
executed, accompanied by payment of the Purchase Price for the Preferred Shares
to be purchased, together with an amount equal to any applicable tax or charge,
by certified check, cashiers check or money order payable to the order of the
Company, the Rights Agent shall thereupon (i) either (A) promptly
requisition from any transfer agent of the Preferred Shares (or make available,
if the Rights Agent is the transfer agent) certificates for the number of
Preferred Shares to be purchased, and the Company hereby irrevocably authorizes
its transfer agent to comply with all such requests, or (B) if the Company
shall have elected to deposit the Preferred Shares with a depositary agent
under a depositary arrangement, promptly requisition from the depositary agent
depositary receipts representing the number of one one-hundredths (1/100)of a Preferred Share to be purchased (in which case
certificates for the Preferred Shares to be represented by such receipts shall
be deposited by the transfer agent with the depositary agent) and the Company
will direct the depositary agent to comply with all such requests, (ii) when
necessary to comply with this Agreement, promptly requisition from the Company
the amount of cash to be paid in lieu of the issuance of fractional shares in
accordance with Section 15 hereof, (iii) promptly after receipt of
such certificates or depositary receipts, cause the same to be delivered to or
upon the order of the registered holder of such Rights Certificate, registered
in such name or names as may be designated by such holder, and (iv) when
necessary to comply with this Agreement, after receipt, promptly deliver such
cash to or upon the order of the registered  12


holder of such Rights Certificate.  In the event that the Company is obligated to
issue other securities (including Common Stock) of the Company, pay cash and/or
distribute other property pursuant to Section 11(a) hereof, the
Company shall make all arrangements necessary so that such other securities,
cash and/or other property are available for distribution by the Rights Agent,
if and when necessary to comply with this Agreement.  (d)In case the registered holder of any
Rights Certificate shall exercise fewer than all the Rights evidenced thereby,
a new Rights Certificate evidencing Rights equivalent to the Rights remaining
unexercised shall be issued by the Rights Agent and delivered to the registered
holder of such Rights Certificate or to his or her duly authorized assigns,
subject to the provisions of Section 6 and Section 15 hereof.  (e)Notwithstanding anything in this Rights
Agreement to the contrary, if the Rights are at any time Beneficially Owned by (i) an
Acquiring Person or an Affiliate or Associate of an Acquiring Person, (ii) a
transferee of an Acquiring Person (or of any such Associate or Affiliate) who
becomes a transferee after the Acquiring Person becomes such, or (iii) a
transferee of an Acquiring Person (or of any such Associate or Affiliate) who
becomes a transferee prior to or concurrently with the Acquiring Persons
becoming such and receives such Rights pursuant to either (A) a transfer
(whether or not for consideration) from the Acquiring Person to holders of
equity interests in such Acquiring Person or to any Person with whom the
Acquiring Person has any continuing agreement, arrangement or understanding
regarding the transferred rights or (B) a transfer which the Board of
Directors of the Company has determined is part of an agreement, arrangement or
understanding which has as a primary purpose or effect the avoidance of this Section 7(e),
such Rights shall be null and void and nontransferable and no holder of any
such Right (including any purported transferee or subsequent holder) shall have
any rights whatsoever with respect to such Rights, whether under any provision
of this Rights Agreement or otherwise. 
No Rights Certificate shall be issued at any time upon the transfer of
any Rights to an Acquiring Person whose Rights would be null and void pursuant
to the preceding sentence or any Associate or Affiliate thereof or to any
nominee of such Acquiring Person, Associate or Affiliate; and any Rights
Certificate delivered to the Rights Agent for transfer to an Acquiring Person
whose Rights would be null and void pursuant to the preceding sentence shall be
canceled.  The Company shall notify the
Rights Agent in writing when this Section 7(e) applies and shall use
all reasonable efforts to ensure that the provisions of this Section 7(e) are
complied with, but neither the Company nor the Rights Agent shall have any
liability to any holder of any Rights Certificate or any other Person as a
result of the Companys failure to make any determinations with respect to an
Acquiring Person or its Affiliate or Associate, or any transferee thereof,
hereunder.  The Company shall give the
Rights Agent written notice of the identity of any such Acquiring Person,
Associate or Affiliate, or the nominee of any of the foregoing, and the Rights
Agent may rely on such notice in carrying out its duties under this Agreement
and shall be deemed not to have any knowledge of the identity of any such
Acquiring Person, Associate or Affiliate, or the nominee of any of the
foregoing unless and until it shall have received such notice.  (f)Notwithstanding anything in this Rights
Agreement to the contrary, neither the Rights Agent nor the Company shall be
obligated to undertake any action with respect to  13


a registered holder of any Rights Certificates upon
the occurrence of any purported exercise as set forth in this Section 7
unless such registered holder shall have (i) properly completed and signed
the certificate contained in the form of election to purchase set forth on the
reverse side of the Rights Certificate surrendered for such exercise and (ii) provided
such additional evidence of the identity of the Beneficial Owner (or former
Beneficial Owner) or Affiliates or Associates thereof as the Company or the
Rights Agent shall reasonably request.  (g)The Company may temporarily suspend, for
a period of time not to exceed 90 calendar days after the Distribution Date,
the exercisability of the Rights in order to prepare and file a registration
statement under the Securities Act, on an appropriate form, with respect to the
Preferred Shares purchasable upon exercise of the Rights and permit such
registration statement to become effective; provided, however,
that no such suspension shall remain effective after, and the Rights shall
without any further action by the Company or any other Person become
exercisable immediately upon, the effectiveness of such registration
statement.  Upon any such suspension, the
Company shall notify the Rights Agent in writing thereof and issue a public
announcement stating that the exercisability of the Rights has been temporarily
suspended and shall issue a further public announcement at such time as the
suspension is no longer in effect (with prompt notice thereof to the Rights
Agent including copies of such announcements). 
Notwithstanding any provision in this Rights Agreement to the contrary,
the Rights shall not be exercisable in any jurisdiction if the requisite
qualification under the blue sky or securities laws of such jurisdiction shall
not have been obtained or the exercise of the Rights shall not be permitted
under applicable law.  SECTION 8.CANCELLATION AND DESTRUCTION OF
RIGHTS CERTIFICATES  All
Rights Certificates surrendered or presented for the purpose of exercise,
transfer, split-up, combination or exchange shall, and any Rights Certificate
surrendered or presented for any purpose that represents Rights that have
become null and void and nontransferable pursuant to Section 7(e) hereof
shall, if surrendered or presented to the Company or to any of its agents, be
delivered to the Rights Agent for cancellation or in canceled form, or, if
surrendered or presented to the Rights Agent, shall be canceled by it, and no
Rights Certificates shall be issued in lieu thereof except as expressly
permitted by this Rights Agreement.  The
Company shall deliver to the Rights Agent for cancellation and retirement, and
the Rights Agent shall so cancel and retire, any Rights Certificate purchased
or acquired by the Company.  The Rights
Agent shall deliver all canceled Rights Certificates to the Company, or shall,
at the Companys written request, destroy such canceled Rights Certificates,
and in such case shall deliver a certificate of destruction thereof to the
Company.  SECTION 9.RESERVATION AND AVAILABILITY OF
PREFERRED SHARES  (a)The Company shall cause to be reserved
and kept available out of its authorized and unissued Preferred Shares or any
authorized and issued Preferred Shares held in its treasury, free from
preemptive rights or any right of first refusal, a number of Preferred Shares
sufficient to permit the exercise in full of all outstanding Rights.  14


(b)In the event that there shall not be
sufficient Preferred Shares authorized but unissued to permit the exercise or
exchange of Rights in accordance with Section 11 hereof, the Company shall
take all such action as may be necessary to authorize additional Preferred
Shares for issuance upon the exercise or exchange of Rights pursuant to Section 11
hereof; provided, however, that if the Company is unable to cause
the authorization of additional Preferred Shares, then the Company shall, or if
action by the Companys shareholders is necessary to cause such authorization
in lieu of seeking any such authorization, the Company may, to the extent
necessary and permitted by applicable law and any agreements or instruments in
effect prior to the Distribution Date to which it is a party, (i) upon
surrender of a Right, pay cash equal to the Purchase Price in lieu of issuing
Preferred Shares and requiring payment therefor, (ii) upon due exercise of
a Right and payment of the Purchase Price for each Preferred Share as to which
such Right is exercised, issue equity securities having a value equal to the
value of the Preferred Shares that otherwise would have been issuable pursuant
to Section 11 hereof, which value shall be determined by a nationally
recognized investment banking firm selected by the Board of Directors of the
Company, or (iii) upon due exercise of a Right and payment of the Purchase
Price for each Preferred Share as to which such Right is exercised, distribute
a combination of Preferred Shares, cash and/or other equity and/or debt
securities having an aggregate value equal to the value of the Preferred Shares
that otherwise would have been issuable pursuant to Section 11 hereof,
which value shall be determined by a nationally recognized investment banking
firm selected by the Board of Directors of the Company.  To the extent that any legal or contractual
restrictions (pursuant to agreements or instruments in effect prior to the
Distribution Date to which it is party) prevent the Company from paying the
full amount payable in accordance with the foregoing sentence, the Company
shall pay to holders of the Rights as to which such payments are being made all
amounts that are not then restricted on a pro rata basis as such payments
become permissible under such legal or contractual restrictions until such
payments have been paid in full.  (c)The Company shall take all such action as
may be necessary to ensure that all Preferred Shares delivered upon exercise or
exchange of Rights shall, at the time of delivery of the certificates for such
Preferred Shares (subject to payment of the Purchase Price), be duly and
validly authorized and issued and fully paid and nonassessable shares.  (d)So long as the Preferred Shares issuable
upon the exercise or exchange of Rights are to be listed on the New York Stock
Exchange, the Nasdaq Stock Market or any national securities exchange, the
Company shall use its commercially reasonable best efforts to cause, from and
after such time as the Rights become exercisable or exchangeable, all Preferred
Shares reserved for such issuance to be listed on the New York Stock Exchange,
the Nasdaq Stock Market or such securities exchange upon official notice of
issuance.  (e)The Company shall pay when due and
payable any and all taxes and governmental charges that may be payable in
respect of the issuance or delivery of Rights Certificates or of any Preferred
Shares upon the exercise or exchange of Rights. 
The Company shall not, however, be required to pay any tax or charge
that may be payable in respect of any transfer or delivery of Rights Certificates
to a Person other than, or in respect of the issuance or delivery of
certificates representing the Preferred Shares in a name other  15


than that of, the registered holder of the Rights
Certificate evidencing Rights surrendered for exercise or exchange or to issue
or deliver any certificates representing Preferred Shares upon the exercise or
exchange of any Rights until any such tax or charge shall have been paid (any
such tax or charge being payable by the holder of such Rights Certificate at
the time of surrender) or until it has been established to the Companys and
the Rights Agents satisfaction that no such tax or charge is due.  SECTION 10.PREFERRED SHARES RECORD DATE  Each
Person in whose name any certificate for Preferred Shares is issued upon the
exercise or exchange of Rights shall for all purposes be deemed to have become
the holder of record of the Preferred Shares represented thereby on, and such
certificate shall be dated, the date on which the Rights Certificate evidencing
such Rights was duly surrendered and payment of any Purchase Price (and any
applicable taxes and governmental charges ) was made; provided,
however, that if the date of such surrender and payment is a date on
which the Preferred Shares transfer books of the Company are closed, such
Person shall be deemed to have become the record holder of such Preferred
Shares on, and such certificate shall be dated, the next succeeding Business
Day on which the Preferred Shares transfer books of the Company are open.  Prior to the exercise of the Rights evidenced
thereby, the holder of a Rights Certificate shall not be entitled to any rights
of a holder of Preferred Shares for which the Rights shall be exercisable,
including, without limitation, the right to vote, to receive dividends or other
distributions or to exercise any preemptive rights, and shall not be entitled
to receive any notice of any proceedings of the Company, except as provided
herein.  SECTION 11.ADJUSTMENTS IN RIGHTS AFTER THERE
IS AN ACQUIRING PERSON; EXCHANGE OF RIGHTS FOR SHARES; BUSINESS COMBINATIONS  (a)Upon a Person becoming an Acquiring
Person, each holder of a Right, except as provided in Section 7(e) hereof,
shall thereafter have a right to receive, upon exercise thereof for the
Purchase Price in accordance with the terms of this Rights Agreement, such
number of shares of Common Stock as shall equal the result obtained by
multiplying the Purchase Price by a fraction, the numerator of which is the
number of one one-hundredths (1/100) of a Preferred Share for which a Right is
then exercisable and the denominator of which is 50% of the Market Value of the
Common Stock on the date on which a Person becomes an Acquiring Person.  As soon as practicable after a Person becomes
an Acquiring Person (provided the Company shall not have elected to make the
exchange permitted by Section 11(b)(i) hereof for all outstanding
Rights), the Company shall use its commercially reasonable efforts to:  (i)prepare and file a registration statement
under the Securities Act, on an appropriate form, with respect to the
securities purchasable upon exercise of the Rights;  (ii)cause such registration statement to
become effective as soon as practicable after such filing;  16


(iii)cause such registration statement to remain effective (with a
prospectus at all times meeting the requirements of the Securities Act) until
the Expiration Date; and  (iv)qualify or register the securities
purchasable upon exercise of the Rights under the blue sky or securities laws
of such jurisdictions as may be necessary or appropriate.  (b)(i)The Companys Board of Directors may, at its option,
at any time after a Person becomes an Acquiring Person, mandatorily exchange
all or part of the then outstanding and exercisable Rights (which shall not
include Rights that shall have become null and void and nontransferable
pursuant to the provisions of Section 7(e) hereof) for consideration
per Right consisting of either (A) one-half of the securities that would be
issuable at such time upon the exercise of one Right in accordance with Section 11(a) hereof,
or, if applicable, Section 9(b)(ii) or 9(b)(iii) hereof or (B) if
applicable, the cash consideration specified in Section 9(b)(i) hereof
(the consideration issuable per Right pursuant to this Section 11(b)(i) being
the Exchange Consideration).  The Companys Board of Directors may, at its
option, issue, in substitution for Preferred Shares, Common Shares in an amount
per Preferred Share equal to the Formula Number if there are sufficient Common
Shares issued but not outstanding or authorized but unissued.  If the Companys Board of Directors elects to
exchange all the Rights for the Exchange Consideration pursuant to this Section 11(b)(i) prior
to the physical distribution of the Rights Certificates, the Company may
distribute the Exchange Consideration in lieu of distributing Rights
Certificates, in which case for purposes of this Rights Agreement holders of
Rights shall be deemed to have simultaneously received and surrendered for
exchange Rights Certificates on the date of such distribution.  Notwithstanding the foregoing, the Board of
Directors shall not be empowered to effect such exchange at any time after any
Person (other than the Company, any Subsidiary of the Company, any employee
benefit plan of the Company or any such Subsidiary, or any Person holding
Common Shares for or pursuant to the terms of any such plan), together with all
Affiliates and Associates of such Person, becomes the Beneficial Owner of more
than 50% of the Common Shares then outstanding.  (ii)Any action of the Companys Board of
Directors ordering the exchange of any Rights pursuant to Section 11(b)(i)
hereof shall be irrevocable and, immediately upon the taking of such action and
without any further action and without any notice, the right to exercise any
such Right pursuant to Section 11(a) hereof shall terminate and the
only right thereafter of a holder of such Right shall be to receive the
Exchange Consideration in exchange for each such Right held by such holder or,
if the Exchange Consideration shall not have been paid or issued, to exercise
any such Right pursuant to Section 11(c)(i) hereof.  The Company shall promptly notify the Rights
Agent in writing whenever it makes a public announcement pursuant to this Section 11(b)(ii) and
give the Rights Agent a copy of such announcement; provided,
however, that the failure to give, or any defect in, such notice
shall not affect the validity of such exchange. 
The Company promptly shall mail a notice of any such exchange to the
Rights Agent and to all holders of such Rights at their last addresses as they
appear on the registry books of the Rights Agent.  Any notice that is mailed in the manner
provided in this Rights Agreement shall be deemed given, whether or not the
holder receives the notice.  Each such
notice of exchange shall state the method by which the exchange of the Rights
for the Exchange Consideration will be effected and, in the event of  17


any partial
exchange, the number of Rights that will be exchanged.  Any partial exchange shall be effected pro
rata based on the number of Rights (other than Rights that shall have become
null and void and nontransferable pursuant to the provisions of Section 7(e)
hereof) held by each holder of Rights.  (c)(i)In the event that, following a Distribution Date, any
transactions specified in the following clause (A), (B) or (C) of
this Section 11(c)(i) (each such transaction being a Business Combination) shall be
completed, directly or indirectly:  (A)the Company shall consolidate with, or
merge with and into, any Acquiring Person or any Affiliate or Associate of an
Acquiring Person;  (B)any Acquiring Person or any Affiliate or
Associate of an Acquiring Person shall merge with and into the Company and, in
connection with such merger, all or part of the Common Shares shall be changed
into or exchanged for capital stock or other securities of the Company or of an
Acquiring Person or any Affiliate or Associate of an Acquiring Person or cash
or any other property; or  (C)the Company shall sell, lease, exchange
or otherwise transfer or dispose of (or one or more of its Subsidiaries shall
sell, lease, exchange or otherwise transfer or dispose of), in one or more
transactions, the Major Part of the assets of the Company and its
Subsidiaries (taken as a whole) to an Acquiring Person or any Affiliate or
Associate of an Acquiring Person;  then, in each such
case, proper provision shall be made so that each holder of a Right, except as
provided in Section 7(e) hereof, shall thereafter have the right to
receive, upon the exercise thereof for the Purchase Price in accordance with
the terms of this Rights Agreement, the securities specified below (or, at such
holders option, the securities specified in Section 11(a) hereof if
the Company is the surviving corporation in such Business Combination):  (1)If the Principal Party in such Business
Combination has Registered Common Shares outstanding, each Right shall
thereafter represent the right to receive, upon the exercise thereof for the
Purchase Price in accordance with the terms of this Rights Agreement, such
number of Registered Common Shares of such Principal Party, free and clear of
all liens, encumbrances or other adverse claims, as shall have an aggregate
Market Value equal to the result obtained by multiplying the Purchase Price by
two; or  (2)If the Principal Party in such Business
Combination does not have Registered Common Shares outstanding, each Right
shall thereafter represent the right to receive, upon the exercise thereof for
the Purchase Price in accordance with the terms of this Rights Agreement, at
the election of the holder of such Right at the time of the exercise thereof,
any of:  (x)such number of Common Shares of the
Surviving Person in such Business Combination as shall have an aggregate Book
Value immediately  18


after giving effect to such Business Combination equal
to the result obtained by multiplying the Purchase Price by two;  (y)such number of Common Shares of the
Principal Party in such Business Combination (if the Principal Party is not
also the Surviving Person in such Business Combination) as shall have an
aggregate Book Value immediately after giving effect to such Business
Combination equal to the result obtained by multiplying the Purchase Price by
two; or  (z)if the Principal Party in such Business
Combination is an Affiliate of one or more Persons which has Registered Common
Shares outstanding, such number of Registered Common Shares of whichever of
such Affiliates of the Principal Party has Registered Common Shares with the
greatest aggregate Market Value on the date of completion of such Business
Combination as shall have an aggregate Market Value on the date of such
Business Combination equal to the result obtained by multiplying the Purchase
Price by two.  (ii)The Company shall not complete any
Business Combination unless each issuer of Common Shares for which Rights may
be exercised, as set forth in this Section 11(c), shall have sufficient
authorized Common Shares that have not been issued or reserved for issuance
(and that shall, when issued upon exercise thereof in accordance with this
Rights Agreement, be validly issued, fully paid and nonassessable and free of
preemptive rights, rights of first refusal or any other restrictions or
limitations on the transfer or ownership thereof) to permit the exercise in
full of the Rights in accordance with this Section 11(c) and unless
prior thereto:  (A)a registration statement under the
Securities Act, on an appropriate form, with respect to the Rights and the
Common Shares of such issuer purchasable upon exercise of the Rights, shall be
effective; and  (B)the Company and each such issuer shall
have:  (1)executed and delivered to the Rights
Agent a supplemental agreement providing for the assumption by such issuer of
the obligations set forth in this Section 11(c) (including the
obligation of such issuer to issue Common Shares upon the exercise of Rights in
accordance with the terms set forth in Sections 11(c)(i) and
11(c)(iii)) and further providing that such issuer, at its own expense, will
use its best efforts to:  (x)cause a registration statement under the
Securities Act, on an appropriate form, with respect to the Rights and the
Common Shares of such issuer purchasable upon exercise of the Rights, to remain
effective (with a prospectus at all times meeting the requirements of the
Securities Act) until the Expiration Date;  (y)qualify or register the Rights and the
Common Shares of such issuer purchasable upon exercise of the Rights under the
blue sky or securities laws of such jurisdictions as may be necessary or
appropriate; and  19


(z)list the Rights and the Common Shares of
such issuer purchasable upon exercise of the Rights on each national securities
exchange on which the Common Shares were listed prior to the completion of the
Business Combination or, if the Common Shares were not listed on a national
securities exchange prior to the completion of the Business Combination, on a
national securities exchange;  (2)furnished to the Rights Agent a written
opinion of independent counsel stating that such supplemental agreement is a valid,
binding and enforceable agreement of such issuer; and  (3)filed with the Rights Agent a certificate
of a nationally recognized firm of independent accountants setting forth the
number of Common Shares of such issuer that may be purchased upon the exercise
of each Right after the completion of such Business Combination.  (iii)After completion of any Business Combination and
subject to the provisions of Section 11(c)(ii) hereof, (A) each
issuer of Common Shares for which Rights may be exercised as set forth in this Section 11(c) shall
be liable for, and shall assume, by virtue of such Business Combination, all
the obligations and duties of the Company pursuant to this Rights Agreement, (B) the
term Company shall thereafter be deemed to refer to such issuer, (C) each
such issuer shall take such steps in connection with such completion as may be
necessary to ensure that the provisions of this Rights Agreement (including the
provisions of Sections 11(a) and 11(c) hereof) shall thereafter
apply, as nearly as reasonably may be, in relation to its Common Shares
thereafter deliverable upon the exercise of the Rights, and (D) the number
of Common Shares of each such issuer thereafter receivable upon exercise of any
Right shall be subject to adjustment from time to time in a manner and on terms
as nearly equivalent as practicable to the provisions of Sections 11 and
12 hereof, and the provisions of Sections 7, 9 and 10 hereof with respect
to the Preferred Shares shall apply, as nearly as reasonably may be, on like
terms to any such Common Shares.  SECTION 12.CERTAIN ADJUSTMENTS  (a)To preserve the actual or potential
economic value of the Rights, if at any time after the date of this Rights
Agreement there shall be any change in the Common Stock or the Preferred
Shares, whether by reason of stock dividends, stock splits, recapitalizations,
mergers, consolidations, combinations or exchanges of securities, split-ups,
split-offs, spin-offs, liquidations, other similar changes in capitalization,
any distribution or issuance of cash, assets, evidences of indebtedness or
subscription rights, options or warrants to holders of Common Stock or
Preferred Shares, as the case may be (other than distribution of the Rights or
regular quarterly cash dividends), or otherwise, then, in each such event the
Companys Board of Directors shall make such appropriate adjustments in the
number of Preferred Shares (or the number and kind of other securities)
issuable upon exercise of each Right, the Purchase Price and Redemption Price
in effect at such time and the number of Rights outstanding at such time
(including the number of Rights or fractional Rights associated with each share
of Common Stock) such that following such adjustment such event shall not have  20


had the effect of reducing or limiting the benefits
the holders of the Rights would have had absent such event.  (b)If, as a result of an adjustment made
pursuant to Section 12(a) hereof, the holder of any Right thereafter
exercised shall become entitled to receive any securities other than Preferred
Shares, then the number of such securities so receivable upon exercise of any
Right thereafter shall be subject to adjustment from time to time in a manner
and on terms as nearly equivalent as practicable to the provisions of
Sections 11 and 12 hereof, and the provisions of Sections 7, 9 and 10
hereof with respect to the Preferred Shares shall apply, as nearly as
reasonably may be possible, on like terms to any such other securities.  (c)All Rights originally issued by the
Company subsequent to any adjustment made to the amount of Preferred Shares or
other securities relating to a Right shall evidence the right to purchase, for
the Purchase Price, the adjusted number and kind of securities purchasable from
time to time under this Rights Agreement upon exercise of the Rights, all
subject to further adjustment as provided in this Rights Agreement.  (d)Irrespective of any adjustment or change
in the Purchase Price or the number of Preferred Shares or number or kind of
other securities issuable upon the exercise of the Rights, the Rights
Certificates theretofore and thereafter issued may continue to express the
terms that were expressed in the initial Rights Certificates issued under this
Rights Agreement.  (e)In any case in which action taken
pursuant to Section 12(a) hereof requires that an adjustment be made
effective as of a record date for a specified event, the Company may elect to
defer (and shall give prompt written notice of such election to the Rights
Agent), until the occurrence of such event, issuing to the holder of any Right
exercised after such record date the Preferred Shares and/or other securities,
if any, issuable upon such exercise over and above the Preferred Shares and/or
other securities, if any, issuable before giving effect to such adjustment; provided, however, that the Company shall deliver to such
holder a due bill or other appropriate instrument evidencing such holders
right to receive such additional securities upon the occurrence of the event
requiring such adjustment.  SECTION 13.CERTIFICATE OF ADJUSTMENT  Whenever
an adjustment is made or any event affecting the Rights or their exercisability
(including without limitation an event that causes rights to become null and
void) occurs as provided in Section 11 or 12 hereof, the Company shall (a) promptly
prepare a certificate setting forth such adjustment and a brief, reasonably
detailed statement of the facts and computations accounting for such
adjustment, (b) promptly file with the Rights Agent and with each transfer
agent for the Preferred Shares a copy of such certificate, and (c) mail a
brief summary thereof to each holder of a Rights Certificate (or, prior to the
Distribution Date, of Common Stock) in accordance with Section 25
hereof.  The Rights Agent shall be fully
protected in relying on any such certificate and on any adjustment or
statements contained therein, and shall have no duty or liability with respect
to, and shall not  21


be deemed to have knowledge of, any such adjustment or
any such event unless and until it shall have received such a certificate.  SECTION 14.ADDITIONAL COVENANTS  (a)Notwithstanding any other provision of
this Rights Agreement, no adjustment to the number of Preferred Shares (or
fraction of a share) or other securities for which a Right is exercisable or
the number of Rights outstanding or associated with each Common Share or any
similar or other adjustment shall be made or be effective if such adjustment
would have the effect of reducing or limiting the benefits the holders of the
Rights would have had absent such adjustment, including, without limitation,
the benefits under Sections 11 and 12 hereof, unless the terms of this
Rights Agreement are amended so as to preserve such benefits.  (b)The Company shall not, after the
Distribution Date, except as permitted by Section 26 hereof, take (or
permit any Subsidiary of the Company to take) any action if at the time such
action is taken it is reasonably foreseeable that such action will reduce or
otherwise limit the benefits the holders of the Rights would have had absent
such action, including, without limitation, the benefits under Sections 11
and 12 hereof.  Any action taken by the
Company during any period after any Person becomes an Acquiring Person but
prior to the Distribution Date shall be null and void unless such action could
be taken under this Section 14(b) from and after the Distribution
Date.  The Company shall not complete any
Business Combination if any issuer of Common Shares for which Rights may be
exercised after such Business Combination in accordance with Section 11(c) hereof
shall have taken any action that reduces or otherwise limits the benefits the
holders of the Rights would have had absent such action, including the benefits
under Sections 11 and 12 hereof.  SECTION 15.FRACTIONAL RIGHTS AND FRACTIONAL
SHARES  (a)The Company may, but shall not be
required to, issue fractional Rights or distribute Rights Certificates that
evidence fractional Rights.  In lieu of
such fractional Rights, the Company may pay to the registered holders of the
Rights Certificates with regard to which such fractional Rights would otherwise
be issuable an amount in cash equal to the same fraction of the current market
value of a whole Right.  For purposes of
this Section 15(a), the current market value of a whole Right shall be the
closing price of the Rights (as determined pursuant to the second and third
sentences of the definition of Market Value contained in Section 1 hereof)
for the Trading Day immediately prior to the date on which such fractional
Rights would have been otherwise issuable.  (b)The Company may, but shall not be
required to, issue fractional Preferred Shares upon exercise of the Rights or
distribute certificates that evidence fractional Preferred Shares.  In lieu of fractional Preferred Shares, the
Company may elect to (i) utilize a depository arrangement as provided by
the terms of the Preferred Shares or (ii) in the case of a fractional
Preferred Share (other thanone
one-hundredth (1/100th) of a Preferred Share or any integral multiple thereof),
pay to the registered holders of Rights Certificates at the time such Rights
are exercised as provided in this Rights Agreement an amount in cash equal to
the same fraction of the current market value of one Preferred Share, if any
are outstanding  22


and publicly traded (or the Formula Number times the
current market value of one share of Common Stock if the Preferred Shares are
not outstanding and publicly traded). 
For purposes of this Section 15(b), the current market value of a
Preferred Share (or share of Common Stock) shall be the closing price of a
Preferred Share (or share of Common Stock) (as determined pursuant to the
second and third sentences of the definition of Market Value contained in Section 1
hereof) for the Trading Day immediately prior to the date of such
exercise.  If, as a result of an
adjustment made pursuant to Section 12(a) hereof, the holder of any
Right thereafter exercised shall become entitled to receive any securities
other than Preferred Shares, the provisions of this Section 15(b) shall
apply, as nearly as reasonably may be, on like terms to such other securities.  (c)The Company may, but shall not be
required to, issue fractional Common Shares upon exchange of Rights pursuant to
Section 11(b) hereof, or to distribute certificates that evidence
fractional Common Shares.  In lieu of
such fractional Common Shares, the Company may pay to the registered holders of
Rights Certificates with regard to which such fractional Common Shares would
otherwise be issuable an amount in cash equal to the same fraction of the
current Market Value of one Common Share as of the date on which a Person
became an Acquiring Person.  (d)Each holder of Rights, by accepting the
Rights, expressly waives his, her or its right to receive any fractional Rights
or any fractional shares upon exercise of a Right, except as provided in this Section 15.  (e)Whenever a payment for fractional Rights
or fractional shares is to be made by the Rights Agent, the Company shall (i) promptly
prepare and deliver to the Rights Agent a certificate setting forth in
reasonable detail the facts related to such payment and the prices and/or
formulas utilized in calculating such payments, and (ii) provide
sufficient monies to the Rights Agent in the form of fully collected funds to
make such payments.  The Rights Agent
shall be fully protected in relying upon such a certificate and shall have no
duty with respect to, and shall not be deemed to have knowledge of any payment
for fractional Rights or fractional shares under any Section of this
Rights Agreement relating to the payment of fractional Rights or fractional
shares unless and until the Rights Agent shall have received such a certificate
and sufficient monies.  SECTION 16.RIGHTS OF ACTION  (a)All rights of action in respect of this
Rights Agreement, excepting the rights of action given to the Rights Agent
under Sections 19 and 21 hereof, are vested in the respective registered
holders of the Rights Certificates (and, prior to the Distribution Date, the
registered holders of the Common Stock), and any registered holder of any
Rights Certificate (or, prior to the Distribution Date, of the Common Stock),
without the consent of the Rights Agent or of the holder of any other Rights
Certificate (or, prior to the Distribution Date, of the Common Stock), may, in
his, her or its own behalf and for his, her or its own benefit, enforce, and
may institute and maintain any suit, action or proceeding against the Company
to enforce, or otherwise act in respect of, his, her or its right to exercise
the Rights evidenced by such Rights Certificate in the manner provided in such
Rights Certificate and in the Rights  23


Agreement. 
Without limiting the foregoing or any remedies available to the holders
of Rights, it is specifically acknowledged that the holders of Rights would not
have an adequate remedy at law for any breach by the Company of this Rights
Agreement and shall be entitled to specific performance of the obligations of
any Person under, and injunctive relief against actual or threatened violations
by the Company of the obligations of any Person subject to, this Rights
Agreement.  (b)Any holder of Rights who prevails in an
action to enforce the provisions of this Rights Agreement against the Company
shall be entitled to recover the reasonable costs and expenses, including
attorneys fees, incurred in such action.  (c)Notwithstanding anything in this
Agreement to the contrary, neither the Company nor the Rights Agent shall have
any liability to any holder of a Right or other Person as a result of its inability
to perform any of its obligations under this Rights Agreement by reason of any
preliminary or permanent injunction or other order, judgment, decree or ruling
(whether interlocutory or final) issued by a court or by a governmental,
regulatory, self regulatory or administrative agency or commission, or any
statute, rule, regulation or executive order promulgated or enacted by any
governmental authority, prohibiting or otherwise restraining performance of
such obligation; provided, however, that the Company
must use all reasonable efforts to have any such injunction, order, judgment,
decree or ruling lifted or otherwise overturned as soon as possible.  SECTION 17.AGREEMENT OF RIGHTS HOLDERS  Every
holder of a Right, by accepting the same, consents and agrees with the Company
and the Rights Agent and with every other holder of a Right that:  (a)prior to the Distribution Date, the
Rights will be transferable only in connection with the transfer of the Common
Stock, and the Rights associated with each share of Common Stock shall be
automatically transferred upon the transfer of each share of Common Stock;  (b)after the Distribution Date, the Rights
Certificates will be transferable, subject to Section 7(e) hereof,
only on the registry books of the Rights Agent if surrendered at the office of
the Rights Agent designated for such purpose, duly endorsed or accompanied by a
proper instrument of transfer with all required certifications completed; and  (c)the Company and the Rights Agent may deem
and treat the Person in which name a Rights Certificate (or, prior to the
Distribution Date, the associated Common Stock certificate) is registered as
the absolute owner thereof and of the Rights evidenced thereby (notwithstanding
any notations of ownership or writing on the Rights Certificates or the
associated Common Stock certificate made by anyone other than the Company or
the Rights Agent) for all purposes whatsoever, and neither the Company nor the
Rights Agent shall be affected by any notice to the contrary.  24


SECTION 18.RIGHTS CERTIFICATE HOLDER NOT
DEEMED A SHAREHOLDER  No
holder, as such, of any Rights Certificate shall be entitled to vote or receive
dividends or be deemed for any purpose the holder of the Preferred Shares or of
any other securities of the Company that may at any time be issuable on the
exercise of the Rights represented thereby, nor shall anything contained in
this Rights Agreement or in any Rights Certificate be construed to confer upon
the holder of any Rights Certificate, as such, any of the rights of a
shareholder of the Company, including, without limitation, any right to vote
for the election of directors or on any matter submitted to shareholders at any
meeting thereof, or to give or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting shareholders, or to
receive dividends or other distributions or subscription rights, or otherwise,
until the Right or Rights evidenced by such Rights Certificate shall have been
exercised in accordance with the provisions of this Rights Agreement.  SECTION 19.CONCERNING THE RIGHTS AGENT  (a)The Company agrees to pay to the Rights
Agent reasonable compensation for all services rendered by it under this Rights
Agreement and, from time to time, on demand of the Rights Agent, its reasonable
expenses and counsel fees and disbursements and other disbursements incurred in
preparing, negotiating, delivering, amending, administering and executing this
Rights Agreement and exercising and performing its duties under this Rights
Agreement, including any taxes or governmental charges imposed as a result of
any action taken by it hereunder (other than taxes on the fees payable to
it).  The Company also agrees to
indemnify the Rights Agent for, and to hold it harmless against, any loss,
liability, damage, judgment, fine, penalty, claim, demand, settlement, cost or
expense (including without limitation, the reasonable fees and expenses of
legal counsel) incurred without gross negligence, bad faith or willful
misconduct on the part of the Rights Agent for any action taken, suffered or
omitted by the Rights Agent in connection with the execution, acceptance,
administration, exercise or performance of its duties under this Rights Agreement,
including, without limitation, the costs and expenses of defending against any
claim of liability arising therefrom, directly or indirectly.  The provisions of this Section 19 and Section 21
below shall survive the termination of this Rights Agreement, the exercise or
expiration of the Rights and the resignation or removal of the Rights
Agent.  The costs and expenses incurred
in enforcing this right of indemnification by the Rights Agent shall be paid by
the Company.  (b)The Rights Agent shall be authorized to
rely on, shall be protected and shall incur no liability for or in respect of
any action taken, suffered or omitted by it in connection with its acceptance
and administration of this Rights Agreement or the exercise or performance of
its duties hereunder, in reliance on any Rights Certificate or certificate for
the Preferred Shares or Common Stock or for other securities of the Company,
instrument of assignment or transfer, power of attorney, endorsement,
affidavit, letter, notice, direction, consent, certificate, statement or other
paper or document believed by it to be genuine and to be signed, executed and,
where necessary, verified or acknowledged by the proper Person or Persons, or
otherwise upon the advice of counsel as set forth in Section 21.  The Rights  25


Agent shall not be deemed to have knowledge of any
event of which it was supposed to receive notice thereof hereunder, and the
Rights Agent shall be fully protected and shall incur no liability for failing
to take any action in connection therewith unless and until it has received
such notice in writing.  SECTION 20.MERGER OR CONSOLIDATION OR CHANGE
OF NAME OF RIGHTS AGENT  (a)Any Person into which the Rights Agent or
any successor Rights Agent may be merged or with which it may be consolidated,
or any Person resulting from any merger or consolidation to which the Rights
Agent or any successor Rights Agent shall be a party, or any Person succeeding
to the business of the Rights Agent or any successor Rights Agent, shall be the
successor to the Rights Agent under this Rights Agreement without the execution
or filing of any paper or any further act on the part of any of the parties to
this Rights Agreement; provided, however,
that such Person would be eligible for appointment as a successor Rights Agent
under the provisions of Section 22 hereof. 
In case at the time such successor Rights Agent shall succeed to the
agency created by this Rights Agreement, any of the Rights Certificates shall
have been countersigned but not delivered, any such successor Rights Agent may
adopt the countersignature of the predecessor Rights Agent and deliver such
Rights Certificates so countersigned; and, in case at that time any of the
Rights Certificates shall not have been countersigned, any successor Rights
Agent may countersign such Rights Certificates either in the name of the
predecessor Rights Agent or in the name of the successor Rights Agent; and, in
all such cases, such Rights Certificates shall have the full force provided in
the Rights Certificates and in this Rights Agreement.  (b)In case at any time the name of the
Rights Agent shall be changed and at such time any of the Rights Certificates
shall have been countersigned but not delivered, the Rights Agent may adopt the
countersignature under its prior name and deliver Rights Certificates so
countersigned; and, in case at that time any of the Rights Certificates shall
not have been countersigned, the Rights Agent may countersign such Rights Certificates
either in its prior name or in its changed name; and, in all such cases, such
Rights Certificates shall have the full force provided in the Rights
Certificates and in this Rights Agreement.  SECTION 21.RIGHTS AND DUTIES OF RIGHTS AGENT  The
Rights Agent undertakes to perform only the duties and obligations, expressly
imposed by this Rights Agreement (and no implied duties or obligations) upon
the following terms and conditions, by all of which the Company and the holders
of the Rights Certificates (or, prior to the Distribution Date, of the Common
Stock), by their acceptance thereof, shall be bound:  (a)The Rights Agent may consult with legal
counsel of its choice (who may be legal counsel for the Company, or may be an
employee of the Rights Agent), and the advice or opinion of such counsel shall
be full and complete authorization and protection to the Rights Agent, and the
Rights Agent shall incur no liability for or in respect of any action taken,
suffered or omitted by it in accordance with such advice or opinion.  26


(b)Whenever in the performance of its duties
under this Rights Agreement the Rights Agent shall deem it necessary or
desirable that any fact or matter (including, without limitation, the identity
of any Acquiring Person and the determination of current market price) be
proved or established by the Company prior to taking, suffering or omitting any
action under this Rights Agreement, such fact or matter (unless other evidence
in respect thereof be specifically prescribed in this Rights Agreement) may be
deemed to be conclusively proved and established by a certificate signed by any
one of the Chairman of the Board, any Vice Chairman of the Board, the Chief
Executive Officer, the President, the Chief Financial Officer, a Vice President
(whether preceded by any additional title), the Treasurer or the Secretary of
the Company and delivered to the Rights Agent, and such certificate shall be
full and complete authorization and protection to the Rights Agent, and the
Rights Agent shall incur no liability for or in respect of any action taken or
suffered or omitted to be taken by it under the provisions of this Rights
Agreement in reliance upon such certificate.  (c)The Rights Agent shall be liable under
this Rights Agreement to the Company and any other Person only for its own
gross negligence, bad faith or willful misconduct.  Anything in this Rights Agreement to the
contrary notwithstanding, in no event shall the Rights Agent be liable for special,
punitive, indirect, incidental or consequential loss or damage of any kind
whatsoever (including, but not limited to, lost profits), even if the Rights
Agent has been advised of the possibility or likelihood of such loss or damage.  Any liability of the Rights Agent under this
Agreement will be limited to the amount of annual fees paid by the Company to
the Rights Agent.  (d)The Rights Agent shall not have any
liability for, nor be liable for or by reason of any of the statements of fact
or recitals contained in this Rights Agreement or in the Rights Certificates
(except as to its countersignature thereof) or be required to verify the same,
but all such statements and recitals are and shall be deemed to have been made
by the Company only.  (e)The Rights Agent shall not have any
liability for, nor be under any responsibility in respect of the validity of
this Rights Agreement or the execution and delivery hereof (except the due
execution of this Rights Agreement by the Rights Agent) or in respect of the
validity or execution of any Rights Certificate (except its countersignature
thereof); it shall not be responsible for any breach by the Company of any
covenant or condition contained in this Rights Agreement or in any Rights
Certificate; it shall not be responsible for any change or adjustment in the
terms of the Rights including any adjustment required under the provisions of Section 11
or 12 hereof or for the manner, method or amount of any such adjustment or the
ascertaining of the existence of facts that would require any such adjustment
(except with respect to the exercise of Rights evidenced by Rights Certificates
after actual notice of any such adjustment, upon which the Rights Agent may
rely); it shall not by any act under this Rights Agreement be deemed to make
any representation or warranty as to the authorization or reservation of any
Preferred Shares or Common Stock to be issued pursuant to this Rights Agreement
or any Rights Certificate or as to whether any Preferred Shares or Common Stock
will, when so issued, be validly authorized and issued, fully paid and
nonassessable; and it shall not be responsible for any  27


change in the exercisability of the Rights (including
the Rights becoming null and void hereunder).  (f)The Company agrees that it shall perform,
execute, acknowledge and deliver or cause to be performed, executed,
acknowledged and delivered all such further and other acts, instruments and
assurances as may reasonably be required by the Rights Agent for the carrying
out or performing by the Rights Agent of the provisions of this Rights
Agreement.  (g)The Rights Agent is hereby authorized and
directed to accept instructions with respect to the performance of its duties
under this Rights Agreement from any one of the Chairman of the Board, any Vice
Chairman of the Board, the Chief Executive Officer, the President, the Chief
Financial Officer, a Vice President (whether preceded by any additional title),
the Treasurer or the Secretary of the Company, and to apply to such officers
for advice or instructions in connection with its duties, and such advice or
instructions shall be full authorization and protection to the Rights Agent and
the Rights Agent shall incur no liability (i) for or in respect of any
action taken, suffered or omitted by it, in accordance with the advice or
instructions of any such officer or (ii) in failing to take action prior
to receiving such advice or instruction. 
The Rights Agent shall be fully authorized and protected in relying upon
the most recent instructions received by any such officer.  Any application by the Rights Agent for
written instructions from the Company may, at the option of the Rights Agent,
set forth in writing any action proposed to be taken, suffered or omitted by
the Rights Agent under this Rights Agreement and the date on and/or after which
such action shall be taken or suffered or such omission shall be
effective.  The Rights Agent shall not be
liable for any action taken or suffered by, or omission or, the Rights Agent in
accordance with a proposal included in any such application on or after the
date specified therein (which date shall not be less than five Business Days
after the date any such officer of the Company actually receives such
application, unless any such officer shall have consented in writing to an
earlier date) unless, prior to taking, suffering or omitting any such action
(or the effective date in case of an omission), the Rights Agent has received
written instructions in response to such application specifying the action to
be taken, suffered or omitted.  (h)The Rights Agent and any shareholder,
Affiliate, director, officer or employee of the Rights Agent may buy, sell or
deal in any of the Rights or other securities of the Company or become
pecuniarily interested in any transaction in which the Company may be
interested, or contract with or lend money to the Company or otherwise act as
fully and freely as though the Rights Agent were not the Rights Agent under
this Rights Agreement.  Nothing in this
Rights Agreement shall preclude the Rights Agent or any such shareholder,
Affiliate, director, officer or employee from acting in any other capacity for
the Company or for any other Person.  (i)The Rights Agent may execute and exercise
any of the rights or powers hereby vested in it or perform any duty under this
Rights Agreement either itself (through its directors, officers and employees)
or by or through its attorneys or agents, and the Rights Agent shall not be
answerable or accountable for any act, omission, default, neglect or misconduct
of any such attorneys or agents or for any loss to the Company or any other
Person resulting from any such act, omission, default, neglect or misconduct
absent any gross  28


negligence, bad faith or willful misconduct in the
selection and continued employment thereof.  (j)No provision of this Rights Agreement
shall require the Rights Agent to expend or risk its own funds or otherwise
incur any financial liability in the performance of any of its duties hereunder
or in the exercise of its rights if it believes that repayment of such funds or
adequate indemnification against such risk or liability is not reasonably
assured to it.  (k)If, with respect to any Rights
Certificate surrendered to the Rights Agent for exercise or transfer, the
certificate attached to the form of assignment or form of election to purchase,
as the case may be, has not been completed, the Company and the Rights Agent will
deem the beneficial owner of the rights evidenced by such Rights Certificate to
be an Acquiring Person or an Affiliate or Associate thereof and such assignment
or election to purchase will not be honored.  SECTION 22.CHANGE OF RIGHTS AGENT  The
Rights Agent or any successor Rights Agent may resign and be discharged from
its duties under this Rights Agreement upon thirty (30) days notice in writing
mailed to the Company and to each transfer agent of the Common Stock or the
Preferred Shares known to the Rights Agent by registered or certified mail, and
to the holders of the Rights Certificates (or, prior to the Distribution Date,
of the Common Stock) by first-class mail. 
In the event the transfer agency relationship in effect between the
Company and the Rights Agent terminates, the Rights Agent will be deemed to
have resigned automatically and be discharged from its duties under this
Agreement as of the effective date of such termination, and the Company shall
be responsible for sending any required notice. 
The Company may remove the Rights Agent or any successor Rights Agent
upon thirty (30) days notice in writing mailed to the Rights Agent or
successor Rights Agent, as the case may be, and to each transfer agent of the
Common Stock or the Preferred Shares by registered or certified mail, and to
the holders of the Rights Certificates (or, prior to the Distribution Date, of
the Common Stock) by first-class mail. 
If the Rights Agent shall resign or be removed or shall otherwise become
incapable of acting, the Company shall appoint a successor to the Rights
Agent.  If the Company shall fail to make
such appointment within a period of thirty (30) days after giving notice of
such removal or after it has been notified in writing of such resignation or
incapacity by the resigning or incapacitated Rights Agent or by the holder of a
Rights Certificate (or, prior to the Distribution Date, of Common Stock) (who
shall, with such notice, submit his, her or its Rights Certificate or, prior to
the Distribution Date, the certificate representing his, her or its Common
Stock, for inspection by the Company), then the registered holder of any Rights
Certificate (or, prior to the Distribution Date, of the Common Stock) may apply
to any court of competent jurisdiction for the appointment of a new Rights
Agent.  Any successor Rights Agent,
whether appointed by the Company or by such a court, shall be either (A) a
Person in good standing organized and doing business under the laws of the
United States or of any state of the United States so long as such Person is
subject to supervision or examination by federal or state authority and which
has at the time of its appointment as Rights Agent a combined capital and
surplus of at least fifty million dollars ($50,000,000), or (B) an Affiliate
of a Person described in clause (A) of this  29


sentence.  After
appointment, the successor Rights Agent shall be vested with the same powers,
rights, duties and responsibilities as if it had been originally named as
Rights Agent without further act or deed; provided, however,
that the predecessor Rights Agent shall deliver and transfer to the successor
Rights Agent any property at the time held by it under this Rights Agreement,
and execute and deliver any further assurance, conveyance, act or deed
necessary for the purpose.  Not later
than the effective date of any such appointment, the Company shall file notice
thereof in writing with the predecessor Rights Agent and each transfer agent of
the Common Stock and the Preferred Shares, and mail a notice thereof in writing
to the registered holders of the Rights Certificates (or, prior to the
Distribution Date, of the Common Stock). 
Failure to give any notice provided for in this Section 22,
however, or any defect therein shall not affect the legality or validity of the
resignation or removal of the Rights Agent or the appointment of the successor
Rights Agent, as the case may be.  SECTION 23.ISSUANCE OF ADDITIONAL RIGHTS AND
RIGHTS CERTIFICATES  Notwithstanding
any of the provisions of this Rights Agreement or of the Rights to the
contrary, the Company may, at its option, issue new Rights Certificates
evidencing Rights in such form as may be approved by its Board of Directors to
reflect any adjustment or change made in accordance with the provisions of this
Rights Agreement.  In addition, in
connection with the issuance or sale of Common Stock following the Distribution
Date and prior to the earlier of the Redemption Date and the Expiration Date,
the Company (a) shall issue, with respect to Common Stock so issued or
sold pursuant to the exercise of stock options or under any employee plan or
arrangement, or upon the exercise, conversion or exchange of securities, notes
or debentures issued by the Company, and (b) may issue, in any other case,
if deemed necessary or appropriate by the Companys Board of Directors, Rights
Certificates representing the appropriate number of Rights in connection with
such issuance or sale; provided, however,
that (i) no such Rights Certificate shall be issued if, and to the extent
that, the Company shall be advised by counsel that such issuance would create a
significant risk of material adverse tax consequences to the Company or the
Person to whom such Rights Certificate would be issued, (ii) no such
Rights Certificate shall be issued if, and to the extent that, appropriate
adjustment shall otherwise have been made in lieu of the issuance thereof, and (iii) no
such Rights Certificate shall be issued to an Acquiring Person or an Affiliate
or Associate of any Acquiring Person.  SECTION 24.REDEMPTION AND TERMINATION  (a)The Companys Board of Directors may, at
its option, at any time prior to the earlier of (i) such time as any
Person becomes an Acquiring Person and (ii) the Close of Business on the
Expiration Date, order the redemption of all, but not fewer than all, the then
outstanding Rights at the Redemption Price (the date of such redemption being
the Redemption Date), and the Company,
at its option, may pay the Redemption Price either in cash or in Common Shares
or other securities of the Company deemed by the Board of Directors, in the
exercise of its sole discretion, to be at least equivalent in value to the
Redemption Price.  The redemption of the
Rights by the Board of Directors may be made  30


effective at such time, on such basis and with such
conditions as the Board of Directors in its sole discretion may establish.  (b)Immediately upon the action of the
Companys Board of Directors ordering the redemption of the Rights, and without
any further action and without any notice, the right to exercise the Rights
will terminate and the only right thereafter of the holders of Rights shall be
to receive the Redemption Price.  Within
ten (10) Business Days after the action of the Companys Board of
Directors ordering the redemption of the Rights, the Company shall give notice
of such redemption to the Rights Agent and to the holders of the then
outstanding Rights by mailing such notice to all such holders at their last
addresses as they appear upon the registry books of the Rights Agent or, prior
to the Distribution Date, on the registry books of the transfer agent for the
Common Stock.  Each such notice of
redemption will state the method by which payment of the Redemption Price will
be made.  The notice, if mailed in the
manner provided in this Rights Agreement, shall be conclusively presumed to
have been duly given, whether or not the holder of Rights receives such
notice.  In any case, failure to give
such notice by mail, or any defect in the notice, to any particular holder of
Rights shall not affect the sufficiency of the notice to other holders of
Rights.  SECTION 25.NOTICES  Notices
or demands authorized by this Rights Agreement to be given or made by the
Rights Agent or by the holder of a Rights Certificate (or, prior to the
Distribution Date, of Common Stock) to or on the Company shall be sufficiently
given or made if delivered by facsimile transmission (provided confirmation of
receipt is received immediately thereafter) or sent by first-class mail or
overnight delivery service, postage prepaid, addressed (until another address
is filed in writing with the Rights Agent) as follows:  Digimarc Corporation 9405 SW Gemini Drive Beaverton, OR
97008 Attention:  Secretary  Subject
to the provisions of Section 22 hereof, notices or demands authorized by
this Rights Agreement to be given or made by the Company or by the holder of a
Rights Certificate (or, prior to the Distribution Date, of Common Stock) to or
on the Rights Agent shall be sufficiently given or made if delivered by
facsimile transmission (provided confirmation of receipt is received
immediately thereafter) or sent by first-class mail or overnight delivery
service, postage prepaid, addressed (until another address is filed in writing
with the Company) as follows:  Computershare Trust Company, N.A.
250 Royall Street 
Canton, MA  02021
Attention:  Client Services  31


Notices
or demands authorized by this Rights Agreement to be given or made by the
Company or the Rights Agent to any holder of a Rights Certificate (or, prior to
the Distribution Date, of Common Stock) shall be sufficiently given or made if
sent by first-class mail, postage prepaid, addressed to such holder at such
holders address as shown on the registry books of the Rights Agent or, prior
to the Distribution Date, on the registry books of the transfer agent for the
Common Stock.  SECTION 26.SUPPLEMENTS AND AMENDMENTS  At any
time prior to the time any Person becomes an Acquiring Person and subject to
the last two sentences of this Section 26, the Company may in its sole and
absolute discretion, and the Rights Agent shall if the Company so directs,
subject to the other terms and conditions of this Rights Agreement, supplement
or amend any provision of this Rights Agreement (including, without limitation,
the date on which the Distribution Date or the Expiration Date shall occur, the
amount of the Purchase Price, the definition of Acquiring Person, the time
during which the Rights may be redeemed pursuant to Section 24 hereof or
any provision of the Certificate of Designation) without the approval of any
holder of the Rights, which amendment or supplement shall be effective as of
the date of execution of such amendment or supplement by the Company.  From and after the time any Person becomes an
Acquiring Person and subject to applicable law and the last two sentences of
this Section 26, the Company may in its sole and absolute discretion, and
the Rights Agent shall if the Company so directs, amend this Rights Agreement
without the approval of any holder of Rights Certificates to (a) cure any
ambiguity or correct or supplement any provision contained in this Rights
Agreement that may be defective or inconsistent with any other provision of
this Rights Agreement or (b) make any other provision in regard to matters
or questions arising under this Rights Agreement that the Company may deem
necessary or desirable and that shall not adversely affect the interests of the
Rights Agent or the holders of Rights Certificates (other than an Acquiring
Person or an Affiliate or Associate of an Acquiring Person), which amendment
shall be effective as of the date of execution of such amendment by the
Company.  Any supplement or amendment
adopted during any period after any Person has become an Acquiring Person but
prior to the Distribution Date shall be null and void unless such supplement or
amendment could have been adopted under the prior sentence from and after the
Distribution Date.  Upon the receipt of a
certificate from an appropriate officer of the Company which states that the
proposed supplement or amendment is in compliance with the terms of this Section 26,
the Rights Agent shall acknowledge such supplement or amendment.  In addition, notwithstanding anything to the
contrary contained in this Rights Agreement, no supplement or amendment to this
Rights Agreement shall be made which reduces the Redemption Price (except as
required by Section 12(a) hereof).  
Any supplement or amendment that affects the Rights Agents own rights,
duties, obligations or immunities under this Rights Agreement shall not be
effective until such supplement or amendment has been executed by each of the
Company and the Rights Agent.  32


SECTION 27.SUCCESSORS  All
the covenants and provisions of this Rights Agreement by or for the benefit of
the Company or the Rights Agent shall bind and inure to the benefit of their
respective successors and assigns under this Rights Agreement.  SECTION 28.BENEFITS OF THIS RIGHTS AGREEMENT;
DETERMINATIONS AND ACTIONS BY THE COMPANYS BOARD OF DIRECTORS  (a)Nothing in this Rights Agreement shall be
construed to give to any Person other than the Company, the Rights Agent and
the registered holders of the Rights Certificates (and, prior to the
Distribution Date, of the Common Stock) any legal or equitable right, remedy or
claim under this Rights Agreement; provided, however,
that this Rights Agreement shall be for the sole and exclusive benefit of the
Company, the Rights Agent and the registered holders of the Rights Certificates
(and, prior to the Distribution Date, of the Common Stock).  (b)Except as explicitly otherwise provided
in this Rights Agreement, the Companys Board of Directors shall have the
exclusive power and authority to administer this Rights Agreement and to
exercise all rights and powers specifically granted to the Companys Board of
Directors or to the Company, or as may be necessary or advisable in the
administration of this Rights Agreement, including, without limitation, the
right and power to (i) interpret the provisions of this Rights Agreement
and (ii) make all determinations or calculations deemed necessary or
advisable for the administration of this Rights Agreement (including, without
limitation, a determination to redeem or not redeem the Rights or to amend this
Rights Agreement and a determination of whether there is an Acquiring Person).  All such actions, calculations,
interpretations and determinations (including, for purposes of clause (y) below,
all omissions with respect to the foregoing) that are done or made by the Board
of Directors in good faith, shall (x) be final, conclusive and binding on
the Company, the Rights Agent, the holders of the Rights, as such, and all
other Persons, and (y) not subject the Board of Directors to any liability
to the holders of the Rights.  The Rights
Agent shall always be entitled to assume that the Board of Directors acted in
good faith and shall be fully protected and incur no liability in reliance
thereon.  (c)Nothing contained in this Rights
Agreement shall be deemed to be in derogation of the obligation of the Board of
Directors to exercise its fiduciary duty. 
Without limiting the foregoing, nothing contained herein shall be
construed to suggest or imply that the Board of Directors shall not be entitled
to reject any tender offer or other acquisition proposal, or to recommend that
holders of Common Stock reject any tender offer, or to take any other action
(including the commencement, prosecution, defense or settlement of any
litigation and the submission of additional or alternative offers or other
proposals) with respect to any tender offer or other acquisition proposal that
the Board of Directors believes is necessary or appropriate in the exercise of
such fiduciary duty.  33


SECTION 29.SEVERABILITY  If any
term, provision, covenant or restriction of this Rights Agreement is held by a
court of competent jurisdiction or other authority to be invalid, void or
unenforceable, the remainder of the terms, provisions, covenants and
restrictions of this Rights Agreement shall remain in full force and effect and
shall in no way be affected, impaired or invalidated.  SECTION 30.GOVERNING LAW  This
Rights Agreement, each Right and each Rights Certificate issued under this
Rights Agreement shall be deemed to be a contract made under the laws of the
state of Delaware and for all purposes shall be governed by, and construed in
accordance with the laws of the State of Delaware applicable to contracts to be
made and performed entirely within the State of Delaware.  SECTION 31.COUNTERPARTS; EFFECTIVENESS  This
Rights Agreement may be executed in any number of counterparts, each of which
shall for all purposes be deemed to be an original, and all of which shall
together constitute but one and the same instrument.  This Rights Agreement shall be effective as
of the date of this Rights Agreement, upon the time of the completion of the
DMRC Merger on such date.  SECTION 32.DESCRIPTIVE HEADINGS  Descriptive
headings of the several Sections of this Rights Agreement are inserted for
convenience only and shall not control or affect the meaning or construction of
any of the provisions of this Rights Agreement.  SECTION 33.FORCE MAJEURE  Notwithstanding anything to
the contrary contained herein, the Rights Agent shall not be liable for any
delays or failures in performance resulting from acts beyond its reasonable
control including, without limitation, acts of God, terrorist acts, shortage of
supply, breakdowns or malfunctions, or loss of data due to power failures or
mechanical difficulties with information storage or retrieval systems, labor
difficulties, war, or civil unrest.  34


IN
WITNESS WHEREOF, the parties hereto have caused this Rights Agreement to be
duly executed as of the day and year first above written.  DMRC CORPORATIONBy:
  /s/ Robert ChamnessName: Robert ChamnessIts: Chief Legal Officer and SecretaryCOMPUTERSHARE TRUST COMPANY, N.A.,
  as Rights AgentBy:
  /s/  Michael
  J. LangName:  Michael
  J. LangIts:  Senior
  Vice President  35


EXHIBIT INDEX  Exhibit
  
  DescriptionA
  
  Certificate of DesignationB
  
  Form of Rights CertificateC
  
  Summary of Rights to Purchase Preferred Shares


EXHIBIT A  Certificate of Designation  1.Designation of Rights and Preferences of Series R
Participating Cumulative Preferred Stock  The
following series of Preferred Stock is hereby designated, which series shall
have the rights, preferences and privileges and limitations set forth below:  1.1Designation of Series R
Participating Cumulative Preferred Stock  The
shares of such series shall be designated the Series R Participating
Cumulative Preferred Stock (the Series R Preferred Stock), $0.001 par
value per share.  The number of shares
initially constituting the Series R Preferred Stock shall be 500,000.  Such number of shares may be decreased by
resolution of the Board of Directors; provided, however,
that no decrease shall reduce the number of shares of Series R Preferred
Stock to a number less than the number of shares then outstanding plus the
number of shares reserved for issuance upon the exercise of outstanding
options, rights or warrants or upon the conversion of any outstanding
securities issued by the Corporation convertible into Series R Preferred
Stock.  1.2Dividends and Distributions  (a)Subject to the prior and superior rights
of the holders of shares of any other series of Preferred Stock or other class
of capital stock of the Corporation ranking prior and superior to the shares of
Series R Preferred Stock with respect to dividends, the holders of shares
of Series R Preferred Stock shall be entitled to receive, when, as, and if
declared by the Board of Directors, out of the assets of the Corporation
legally available therefor, quarterly dividends payable in cash on the last day
of each fiscal quarter in each year, or such other dates as the Corporations
Board of Directors shall approve (each such date being referred to in this
Designation as a Quarterly Dividend Payment Date), commencing on the first
Quarterly Dividend Payment Date after the first issuance of a share or a
fraction of a share of Series R Preferred Stock, in an amount per share
(rounded to the nearest cent) equal to the greater of (i) $0.001 and (ii) the
Formula Number (as hereinafter defined) then in effect times the cash dividends
then to be paid on each share of Common Stock. 
In addition, if the Corporation shall pay any dividend or make any
distribution on the Common Stock payable in assets, securities or other forms
of noncash consideration (other than dividends or distributions solely in
shares of Common Stock), then, in each such case, the Corporation shall
simultaneously pay or make on each outstanding whole share of Series R
Preferred Stock a dividend or distribution in like kind equal to the Formula
Number then in effect times such dividend or distribution on each share of
Common Stock.  As used in this
Designation and in the Rights Agreement, the Formula Number shall be 100; provided, however, that if at anytime after the
completion of the DMRC Merger the Corporation shall (i) declare or pay any
dividend on the Common Stock payable in shares of Common Stock or make any
distribution on the Common Stock in shares of Common Stock, (ii) subdivide
(by a stock split or otherwise) the outstanding shares of Common Stock into a
larger number of shares of  A-1


Common Stock, or (iii) combine
(by a reverse stock split or otherwise) the outstanding shares of Common Stock
into a smaller number of shares of Common Stock, then in each such event the
Formula Number shall be adjusted to a number determined by multiplying the
Formula Number in effect immediately prior to such event by a fraction, the numerator
of which is the number of shares of Common Stock that are outstanding
immediately after such event and the denominator of which is the number of
shares of Common Stock that are outstanding immediately prior to such event
(and rounding the result to the nearest whole number); and provided
further, that if at any time after the Completion of the DMRC Merger
the Corporation shall issueany shares of its capital stock in a merger, reclassification or
change of the outstanding shares of Common Stock, then in each such event the
Formula Number shall be appropriately adjusted to reflect such merger,
reclassification or change so that each share of Preferred Stock continues to
be the economic equivalent of a Formula Number of shares of Common Stock prior to
such merger, reclassification or change.  (b)The Corporation shall declare a dividend
or distribution on the Series R Preferred Stock as provided in Section 1.2(a) immediately
prior to or at the same time it declares a dividend or distribution on the Common
Stock (other than a dividend or distribution solely in shares of Common Stock);
provided, however, that in the event no
dividend or distribution (other than a dividend or distribution in shares of
Common Stock) shall have been declared on the Common Stock during the period
between any Quarterly Dividend Payment Date and the next subsequent Quarterly
Dividend Payment Date, a dividend of $0.001per share on
the Series R Preferred Stock shall nevertheless be payable on such
subsequent Quarterly Dividend Payment Date. 
The Corporations Board of Directors may fix a record date for the
determination of holders of shares of Series R Preferred Stock entitled to
receive a dividend or distribution declared thereon, which record date shall be
the same as the record date for any corresponding dividend or distribution on
the Common Stock and which shall not be more than 60 days prior to the
date fixed for payment thereof.  (c)Dividends shall begin to accrue and be
cumulative on outstanding shares of Series R Preferred Stock from and
after the Quarterly Dividend Payment Date next preceding the date of original
issue of such shares of Series R Preferred Stock; provided,
however, that dividends on such shares that are originally issued
after the record date for the determination of holders of shares of Series R
Preferred Stock entitled to receive a quarterly dividend on or prior to the
next succeeding Quarterly Dividend Payment Date shall begin to accrue and be
cumulative from and after such Quarterly Dividend Payment Date.  Notwithstanding the foregoing, dividends on
shares of Series R Preferred Stock that are originally issued prior to the
record date for the determination of holders of shares of Series R
Preferred Stock entitled to receive a quarterly dividend on or prior to the
first Quarterly Dividend Payment Date shall be calculated as if cumulative from
and after the last day of the fiscal quarter (or such other Quarterly Dividend
Payment Date as the Corporations Board of Directors shall approve) next
preceding the date of original issuance of such shares.  Accrued but unpaid dividends shall not bear
interest.  Dividends paid on the shares
of Series R Preferred Stock in an amount less than the total amount of
such dividends at the time accrued and payable on such shares shall be
allocated pro rata on a share-by-share basis among all such shares at the time
outstanding.  A-2


(d)So long as any shares of Series R
Preferred Stock are outstanding, no dividends or other distributions shall be
declared, paid or distributed, or set aside for payment or distribution, on the
Common Stock unless, in each case, the dividend required by this Section 1.2
to be declared on the Series R Preferred Stock shall have been declared.  (e)The holders of shares of Series R
Preferred Stock shall not be entitled to receive any dividends or other
distributions except as provided in this Designation.  1.3Voting Rights  The
holders of shares of Series R Preferred Stock shall have the following voting
rights:  (a)Each holder of Series R Preferred
Stock shall be entitled to a number of votes equal to the Formula Number then
in effect for each share of Series R Preferred Stock held of record on
each matter on which holders of the Common Stock or stockholders generally are
entitled to vote, multiplied by the maximum number of votes per share that any
holders of the Common Stock or stockholders generally then have with respect to
such matter (assuming any holding period or other requirement to vote a greater
number of shares is satisfied).  (b)Except as otherwise provided in this
Designation or by applicable law, the holders of shares of Series R
Preferred Stock and the holders of shares of Common Stock and any other capital
stock of the Corporation having general voting rights shall vote together as
one class for the election of directors of the Corporation and on all other
matters submitted to a vote of stockholders of the Corporation.  (c)Except as provided in this Designation or
by applicable law, holders of Series R Preferred Stock shall have no
special voting rights and their consent shall not be required (except to the
extent they are entitled to vote with holders of Common Stock as set forth in
this Designation) for authorizing or taking any corporate action.  1.4Certain Restrictions  (a)Whenever quarterly dividends or other
dividends or distributions payable on the Series R Preferred Stock as
provided in Section 1.2 are in arrears, thereafter and until all accrued
and unpaid dividends and distributions, whether or not declared, on shares of Series R
Preferred Stock outstanding shall have been paid in full, the Corporation shall
not:  (i)declare or pay dividends on, make any
other distributions on, or redeem or purchase or otherwise acquire for
consideration any shares of stock ranking junior (either as to dividends or
upon liquidation, dissolution or winding up) to the Series R Preferred
Stock;  (ii)declare or pay dividends on or make any
other distributions on any shares of stock ranking on a parity (either as to
dividends or upon liquidation,  A-3


dissolution or winding up) with the Series R
Preferred Stock, except dividends paid ratably on the Series R Preferred
Stock and all such parity stock on which dividends are payable or in arrears in
proportion to the total amounts to which the holders of all such shares are
then entitled;  (iii)redeem or purchase or otherwise acquire
for consideration shares of any stock ranking junior (either as to dividends or
upon liquidation, dissolution or winding up) with the Series R Preferred
Stock; provided, however, that the Corporation
may at any time redeem, purchase or otherwise acquire shares of any such junior
stock in exchange for shares of any stock of the Corporation ranking junior
(either as to dividends or upon dissolution, liquidation or winding up) to the Series R
Preferred Stock; or  (iv)redeem or purchase or otherwise acquire
for consideration any shares of Series R Preferred Stock, or any shares of
stock ranking on a parity with the Series R Preferred Stock, except in
accordance with a purchase offer made in writing or by publication (as
determined by the Corporations Board of Directors) to all holders of such
shares upon such terms as the Corporations Board of Directors, after
consideration of the respective annual dividend rates and other relative rights
and preferences of the respective Preferred Stock classes, shall determine in
good faith will result in fair and equitable treatment among the respective
series or classes.  (b)The Corporation shall not permit any
subsidiary of the Corporation to purchase or otherwise acquire for
consideration any shares of stock of the Corporation unless the Corporation
could, under paragraph (a) of this Section 1.4, purchase or
otherwise acquire such shares at such time and in such manner.  1.5Liquidation Rights  Upon
the liquidation, dissolution or winding up of the Corporation, whether
voluntary or involuntary, no distribution shall be made to (a) the holders
of shares of stock ranking junior (either as to dividends or upon liquidation,
dissolution or winding up) to the Series R Preferred Stock unless, prior
thereto, the holders of shares of Series R Preferred Stock shall have
received an amount equal to the greater of (i) $0.001per
share and (ii) the accrued and unpaid dividends and distributions thereon,
whether or not declared, to the date of such payment, plus an aggregate amount
per share equal to the Formula Number then in effect times the aggregate amount
to be distributed per share to holders of Common Stock or (b) the holders
of shares of stock ranking on a parity (either as to dividends or upon
liquidation, dissolution or winding up) with the Series R Preferred Stock,
except distributions made ratably on the Series R Preferred Stock and all
other such parity stock in proportion to the total amounts to which the holders
of all such shares are entitled upon such liquidation, dissolution or winding
up.  1.6Consolidation, Merger, etc.  In
case the Corporation shall enter into any consolidation, merger, combination or
other transaction in which the shares of Common Stock are exchanged for or
changed into  A-4


other stock or securities, cash and/or any other
property, then in any such case the then outstanding shares of Series R
Preferred Stock shall at the same time be similarly exchanged or changed into
an amount per share equal to the Formula Number then in effect times the
aggregate amount of stock, securities, cash and/or any other property (payable
in kind), as the case may be, into which or for which each share of Common
Stock is exchanged or changed.  In the
event both this Section 1.6 and Section 1.2 appear to apply to a
transaction, this Section 1.6 will control.  1.7No Redemption; No Sinking Fund  (a)The shares of Series R Preferred
Stock shall not be subject to redemption by the Corporation or at the option of
any holder of Series R Preferred Stock; provided,
however, that the Corporation may purchase or otherwise acquire
outstanding shares of Series R Preferred Stock in the open market or by
offer to any holder or holders of shares of Series R Preferred Stock.  (b)The shares of Series R Preferred
Stock shall not be subject to or entitled to the operation of a retirement or
sinking fund.  1.8Ranking  The Series R
Preferred Stock shall rank junior to all other series of Preferred Stock of the
Corporation, unless the Corporations Board of Directors shall specifically
determine otherwise in fixing the powers, preferences and relative,
participating, optional and other special rights of the shares of such
Preferred Stock and the qualifications, limitations and restrictions thereof.  1.9Fractional Shares  The Series R
Preferred Stock shall be issuable upon exercise of the Rights issued pursuant
to the Rights Agreement in whole shares or in any fractional share that is one
one-hundredth (1/100th) of a share or any integral multiple of such fraction,
and shall entitle the holder, in proportion to such holders fractional shares,
to receive dividends, exercise voting rights, participate in distributions and
have the benefit of all other rights of holders of Series R Preferred
Stock.  In lieu of fractional shares, the
Corporation, prior to the first issuance of a share or a fractional share of Series R
Preferred Stock, may elect to (a) make a cash payment as provided in the
Rights Agreement for a fractional share other than one one-hundredth (1/100th)
of a share or any integral multiple thereof or (b) issue depository
receipts evidencing such authorized fractional share of Series R Preferred
Stock pursuant to an appropriate agreement between the Corporation and a
depository selected by the Corporation; provided, however,
that such agreement shall provide that the holders of such depository receipts
shall have all the rights, privileges and preferences to which they are
entitled as holders of the Series R Preferred Stock.  A-5


1.10Reacquired Shares  Any
shares of Series R Preferred Stock purchased or otherwise acquired by the
Corporation in any manner whatsoever shall be retired and canceled promptly
after the acquisition thereof.  All such
shares shall upon their cancellation become authorized but unissued shares of
Preferred Stock, without designation as to series until such shares are once
more designated as part of a particular Series by the Corporations Board
of Directors pursuant to the provisions of Article VI of the Certificate
of Incorporation.  1.11Amendment  None
of the powers, preferences and relative, participating, optional and other
special rights of the Series R Preferred Stock as provided in this
Designation or in the Certificate of Incorporation shall be amended in any
manner that would alter or change the powers, preferences, rights or privileges
of the holders of Series R Preferred Stock so as to affect them adversely
without the affirmative vote of the holders of at least two-thirds of the
outstanding shares of Series R Preferred Stock, voting as a separate
class.  A-6


EXHIBIT B  Certificate
  No. R-
  Rights  NOT EXERCISABLE
AFTER
[            ]
[    ], 20[    ] OR EARLIER IF
REDEMPTION OR EXCHANGE OCCURS.  THE
RIGHTS ARE SUBJECT TO REDEMPTION AT THE OPTION OF THE COMPANY AT $0.001 PER
RIGHT AND TO EXCHANGE ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT.  RIGHTS
BENEFICIALLY OWNED BY AN ACQUIRING PERSON OR AN AFFILIATE OR ASSOCIATE OF AN
ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT) AND BY ANY
SUBSEQUENT HOLDER OF SUCH RIGHTS ARE NULL AND VOID AND NONTRANSFERABLE.  RIGHTS CERTIFICATE  DIGIMARC
CORPORATION  This
certifies that
                                ,
or registered assigns, is the registered owner of the number of Rights set
forth above, each of which entitles the owner thereof, subject to the terms,
provisions and conditions of the Rights Agreement, dated as of July 31,
2008, 2008 (the Rights Agreement), between DIGIMARC
CORPORATION, a Delaware corporation (the Company),
and Computershare Trust Company, N.A., a federally chartered trust company as
Rights Agent (the Rights Agent), unless the
Rights evidenced hereby have been previously redeemed by the Company, to
purchase from the Company at any time after the Distribution Date (as such term
is defined in the Rights Agreement) and prior to 5:00 P.M., Portland,
Oregon time, on July 31, 2018 at the office of the Rights Agent designated
for such purpose, or at the office of its successor as Rights Agent, one
one-hundredth (1/100) of a fully paid non-assessable share of Series R
Participating Cumulative Preferred Stock, $0.001 par value per share (the Preferred Shares), of the Company,
at a purchase price of $100.00 per one one-hundredthof
a Preferred Share (the Purchase Price),
upon presentation and surrender of this Rights Certificate with the Form of
Election to Purchase duly executed.  The
number of Rights evidenced by this Rights Certificate (and the number of
one-hundredths of a Preferred Share that may be purchased upon exercise hereof)
set forth above, and the Purchase Price set forth above, are the number and
Purchase Price as of July 31, 2008, based on the Preferred Shares as
constituted at such date.  As provided in
the Rights Agreement, the Purchase Price and the number of one one-hundredths
of a Preferred Share that may be purchased upon the exercise of the Rights
evidenced by this Rights Certificate are subject to modification and adjustment
upon the happening of certain events.  If the
Rights evidenced by this Rights Certificate are at any time beneficially owned
by an Acquiring Person or an Affiliate or Associate of an Acquiring Person (as
such terms  B-1


are defined in the Rights Agreement), such Rights
shall be null and void and nontransferable and the holder of any such Right
(including any purported transferee or subsequent holder) shall not have any
right to exercise or transfer any such Right.  This
Rights Certificate is subject to all the terms, provisions and conditions of
the Rights Agreement, which terms, provisions and conditions are hereby
incorporated herein by reference and made a part hereof and to which Rights
Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities hereunder of the
Rights Agent, the Company and the holders of the Rights Certificates.  Copies of the Rights Agreement are on file at
the principal executive offices of the Company.  This
Rights Certificate, with or without other Rights Certificates, upon surrender
at the office of the Rights Agent designated for such purpose, may be exchanged
for another Rights Certificate or Rights Certificates of like tenor and date
evidencing rights entitling the holder to purchase a like aggregate number of
Preferred Shares as the Rights evidenced by the Rights Certificate or Rights
Certificates surrendered shall have entitled such holder to purchase.  If this Rights Certificate shall be exercised
in part, the holder shall be entitled to receive upon surrender hereof another
Rights Certificate or Rights Certificates for the number of whole Rights not
exercised.  Subject
to the provisions of the Rights Agreement, the Rights evidenced by this
Certificate (i) may be redeemed by the Company at a redemption price (in
cash or shares of Common Stock or other securities of the Company deemed by the
Companys Board of Directors to be at least equivalent in value) of $0.001 per
Right (subject to adjustment, as provided in the Rights Agreement) or (ii) may
be exchanged in whole or in part for shares of the Companys Common Stock,
$0.001 par value per share, or for Preferred Shares.  The
Company may, but shall not be required to, issue fractions of Preferred Shares
or distribute certificates that evidence fractions of Preferred Shares upon the
exercise of any Right or Rights evidenced hereby.  In lieu of issuing fractional shares, the
Company may elect to make a cash payment as provided in the Rights Agreement
for fractions of a share other than one one-hundredth (1/100) of a share or any
integral multiple thereof or to issue certificates or utilize a depository
arrangement as provided in the terms of the Rights Agreement and the Preferred
Shares.  No
holder of this Rights Certificate shall be entitled to vote or receive
dividends or be deemed for any purpose the holder of the Preferred Shares or of
any other securities of the Company that may at any time be issuable on the
exercise hereof, nor shall anything contained in the Rights Agreement or herein
be construed to confer upon the holder hereof, as such, any of the rights of a
shareholder of the Company or any right to vote for the election of directors
or upon any matter submitted to shareholders at any meeting thereof, or to give
or withhold consent to any corporate action, or to receive notice of meetings
or other actions affecting, shareholders (except as provided in the Rights
Agreement), or to receive dividends or subscriptions rights, or otherwise,
until the Right or Rights evidenced by this Rights Certificate shall have been
exercised as provided in the Rights Agreement.  B-2


This
Rights Certificate shall not be valid or obligatory for any purpose until it
shall have been countersigned by the Rights Agent.  WITNESS
the facsimile signature of the proper officers of the Company and its corporate
seal, if any.  Dated as of
                  ,
        .  DIGIMARC CORPORATIONBy:Its:   COUNTERSIGNED:  COMPUTERSHARE
TRUST COMPANY, N.A.
as Rights Agent   By:Its:  B-3


Form of Reverse
Side of Rights Certificate  FORM OF
ASSIGNMENT  (To be executed by the
registered holder if such holder desires to transfer the Rights Certificate)  FOR
VALUE RECEIVED
                                                                                          
hereby sells, assigns and transfer unto  (Please print name and address of transferee)  this
Rights Certificate, together with all right, title and interest therein, and
does hereby irrevocably constitute and appoint
                          
as attorney, to transfer this Rights Certificate on the books of the
within-named Company, with full power of substitution.  The
undersigned hereby certifies that (1) the Rights evidenced by this Rights
Certificate are not being sold, assigned or transferred by or on behalf of a
Person who is or was an Acquiring Person or an Affiliate or Associate thereof
(as such terms are defined in the Rights Agreement), (2) this Rights
Certificate is not being sold, assigned or transferred to or on behalf of any
such Acquiring Person, Affiliate or Associate, and (3) after inquiry and
to the best knowledge of the undersigned, the undersigned did not acquire the
Rights evidenced by this Rights Certificate from any Person who is or was an
Acquiring Person or an Affiliate or Associate thereof (as such terms are
defined in the Rights Agreement).  Dated:Signature :Signature
  Guarantee*  
 *Signatures
must be guaranteed by a participant in the Securities Transfer Agent Medallion
Program, the Stock Exchanges Medallion Program or the New York Stock Exchange, Inc.
Medallion Signature Program.  B-4


Form of Reverse
Side of Rights Certificate (continued)  FORM OF
ELECTION TO PURCHASE  (To be executed if holder
desires to exercise Rights represented by the Rights Certificate)  To:  DIGIMARC CORPORATION  The
undersigned hereby irrevocably elects to exercise
                    
Rights represented by this Rights Certificate to purchase the Preferred Shares
issuable upon the exercise of such Rights and requests that certificates for
such Preferred Shares be issued in the name of:  Please
insert social security or other identifying number   (Please print name and address)  If
such number of Rights shall not be all the Rights evidenced by this Rights
Certificate, a new Rights Certificate for the balance remaining of such Rights
shall be registered in the name of and delivered to:  Please
insert social security or other identifying number   (Please print name and address)  The
undersigned hereby certifies that (1) the Rights evidenced by this Rights
Certificate are not beneficially owned by an Acquiring Person or an Affiliate
or Associate thereof (as such terms are defined in the Rights Agreement), and (2) after
inquiry and to the best knowledge of the undersigned, the undersigned did not
acquire the Rights evidenced by this Rights Certificate from any Person who is
or was an Acquiring Person or an Affiliate or Associate thereof (as such terms
are defined in the Rights Agreement).   Dated:Signature :Signature
  Guarantee*   
 *Signatures
must be guaranteed by a participant in the Securities Transfer Agent Medallion
Program, the Stock Exchanges Medallion Program or the New York Stock Exchange, Inc.
Medallion Signature Program.  B-5


Form of Reverse
Side of Rights Certificate (continued)  NOTICE  The
signature in the Form of Assignment or Form of Election to Purchase,
as the case may be, must conform to the name as written on the face of this
Rights Certificate in every particular, without alteration or enlargement or
any change whatsoever.  In the
event the certification set forth above in the Form of Assignment or the Form of
Election to Purchase, as the case may be, is not completed, the Company and the
Rights Agent will deem the beneficial owner of the Rights evidenced by this
Rights Certificate to be an Acquiring Person or an Affiliate or Associate
thereof (as defined in the Rights Agreement) and such Assignment or Election to
Purchase will not be honored.  B-6


EXHIBIT C  DIGIMARC CORPORATION  SHAREHOLDER
RIGHTS PLAN  SUMMARY
OF RIGHTS
TO PURCHASE PREFERRED SHARES  Distribution and Transfer of
  Rights; Rights Certificates:
  
  On July 31, 2008, the Board of Directors
  (the Board of Directors) of
  DMRC Corporation (the Company)
  authorized the implementation of a Shareholder Rights Plan, subject to the
  completion of the merger of DMRC LLC with and into the Company, its
  wholly-owned subsidiary, with the Company being the surviving company in the
  merger (the DMRC Merger), and declared
  a dividend of one preferred share purchase right (a Right)
  for each outstanding share of common stock, $0.001 par value per share, of
  the Company (the Common Shares), upon
  completion of the DMRC Merger. Prior to the Distribution Date referred to
  below, if any, the Rights will be evidenced by and trade with the
  certificates for the Common Stock. After the Distribution Date, if any, the
  Company will cause rights certificates to be delivered to the Companys shareholders
  and the Rights will become transferable apart from the Common Stock.Distribution Date:
  
  The Rights will separate from the Common Stock
  and become exercisable following the earlier of (i) the close of
  business on the tenth business day after a public announcement that a person
  or group (including any affiliate or associate of such person or group) has
  acquired beneficial ownership of 15% or more of the outstanding Common Shares
  on the date of completion of the DMRC Merger (such person or group being an Acquiring Person) and
  (ii) the close of business on such date, if any, as may be designated by
  the Board of Directors following the commencement of, or first public
  disclosure of an intent to commence, a tender or exchange offer for outstanding
  Common Shares which could result in the offeror becoming the beneficial owner
  of 15% or more of the outstanding Common Shares (the earlier of such dates
  being the Distribution Date).  C-1


Preferred Shares Purchasable
  upon Exercise of Rights:
  
  After the Distribution Date, each Right will
  entitle the holder to purchase, for $100.00 (the Purchase
  Price), one one-hundredth (1/100) of a share of Series R
  Participating Cumulative Preferred Stock of the Company (a Preferred Share) with economic
  terms similar to that of one Common Share.Flip-In Provision:
  
  In the event a person or group becomes an
  Acquiring Person, the Rights will entitle each holder of a Right (other than
  an Acquiring Person (or any affiliate or associate of such Acquiring Person))
  to purchase, for the Purchase Price, that number of Common Shares equivalent
  to the number of Common Shares which at the time of the transaction would
  have a market value of twice the Purchase Price. Any Rights that are at any
  time beneficially owned by an Acquiring Person (or any affiliate or associate
  of an Acquiring Person) will be null and void and nontransferable and any
  holder of any such Right (including any purported transferee or subsequent
  holder) will be unable to exercise or transfer any such Right.Flip-Over Provision:
  
  If, at any time after any person or group
  becomes an Acquiring Person, the Company is acquired in a merger or other
  business combination with another entity, or if 50% or more of its assets or
  assets accounting for 50% or more of its net income or revenues are
  transferred (in one or more transactions), each Right will entitle its holder
  to purchase, for the Purchase Price, that number of shares of common stock of
  the person or group engaging in the transaction having a then current market
  value of twice the Purchase Price.Exchange Provisions:
  
  At any time after any person or group becomes an
  Acquiring Person, but before a person or group becomes the beneficial owner
  of more than 50% of the Common Shares, the Board of Directors may elect to
  exchange each Right (other than Rights that have become null and void and
  nontransferable as described above) for consideration per Right consisting of
  one-half of the number of Common Shares that would be issuable at such time
  on the exercise of one Right and without payment of the Purchase Price.Redemption of Rights:
  
  At any time prior to any person or group
  becoming an Acquiring Person, the Board of Directors may redeem the  C-2


Rights in whole, but not in part, at a price of
  $0.001 per Right, subject to adjustment as provided in the Rights Agreement
  (the Redemption Price).Expiration of Rights:
  
  The Rights are not exercisable until the
  Distribution Date and will expire on July 31, 2018, unless earlier
  redeemed or exchanged by the Company.Amendment of Terms of Rights:
  
  The terms of the Rights and the Rights Agreement
  may be amended without the approval of any holder of the Rights, at any time
  prior to the Distribution Date.Voting Rights:
  
  Until a Right is exercised, the holder thereof,
  as such, will have no rights as a shareholder of the Company, including,
  without limitation, the right to vote or receive dividends.Antidilution Provisions:
  
  In order to preserve the actual or potential
  economic value of the Rights, the number of Preferred Shares or other
  securities issuable upon exercise of the Right, the Purchase Price, the
  Redemption Price and the number of Rights associated with each outstanding
  Common Share are all subject to adjustment by the Board of Directors pursuant
  to certain customary antidilution provisions.Taxes:
  
  The Rights distribution should not be taxable
  for federal income tax purposes. Following an event that renders the Rights
  exercisable or upon redemption of the Rights, shareholders may recognize
  taxable income.  The foregoing is a summary of certain principal terms of
the Shareholder Rights Plan and is qualified in its entirety by reference to
the detailed terms of the Rights Agreement. 
A copy of the Rights Agreement has been filed with the Securities and
Exchange Commission as an exhibit to a Registration Statement on Form 8-A
and is available free of charge from the Company.  C-3