EXHIBIT
10.3


 


CONFIDENTIAL PORTIONS OMITTED


 


AGREEMENT


 


This
is an agreement (the “Agreement”) between Digimarc
Corporation, a Delaware Corporation, having a place of business at 9405 SW
Gemini Drive, Beaverton, Oregon 97008, and its subsidiaries (“Digimarc”), and The Nielsen Company (US), Inc., a New
York Corporation, having a place of business at 770 Broadway, New York, New
York 10003, its Subsidiaries
and Affiliates (“Nielsen”).


 


Nielsen “Affiliates” are
The Nielsen Company, B.V., a Netherlands corporation,
and any of the Subsidiaries of The Nielsen Company, B.V.
that are not also a Subsidiary of Nielsen (US). 
Nielsen “Subsidiaries” include any corporation,
partnership or other entity in which a party holds, directly or indirectly,
ownership of, or the right to vote on behalf of, more than forty percent (40%)
of its voting stock or other voting equity interests, for so long as such
ownership or right to vote exists.  An
entity in which Nielsen owns more than forty percent (40%) of its voting stock
or other voting equity interests but less than a majority of the voting stock
or other voting equity interests, is not considered a Subsidiary under this
definition unless that entity agrees in writing to be bound to all applicable
provisions of this Agreement.


 


The
effective date of this Agreement is October 1, 2007 (“Effective Date”) and
the parties hereby further agree:


 


1.              IP Ownership and License Grants.


 


1.1.   Digimarc Patents.  “Digimarc Patents”
means all patents and patent applications owned by Digimarc
that Digimarc has the right to license, and any
reissues, continuations, continuations-in-part, divisionals,
extensions, re-examinations, substitutions and renewals of any such patents and
patent applications and any and all foreign counterparts and equivalents of the
foregoing; excluding U.S.
Patent Nos. [**], and any
reissues, continuations, continuations-in-part, divisionals,
extensions, re-examinations, substitutions, renewals and foreign counterparts
and equivalents of those patents.


 


1.2.   Current Nielsen Products and Services. 
Subject to the terms and conditions of this Agreement, as of January 1,
2008 (the “License Initiation Date”), Digimarc hereby
grants to Nielsen a worldwide[**] (except as set forth in Section 6.4)
license under the Digimarc Patents to make, have
made, use, import, Sell and Offer to Sell Current Nielsen Products and
Services.  “Current Nielsen
Products and Services” means [**].


 


1.3.   CIMR Products and Services. 
Subject to the terms and conditions of this Agreement, as of the License
Initiation Date, Digimarc hereby grants to Nielsen a worldwide[**]
(except as set forth in Section 6.4) license under the Digimarc
Patents to make, have made, use, import, Sell and Offer to Sell the CIMR Products and Services. 
“CIMR Products and Services” means products and 


 






** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.


 

















 


services that are made
or offered by and/or for Nielsen and that are provided to customers by Nielsen and described in Appendix D, and any
improvements and other modifications, that are developed and marketed as a
result of this Agreement, using [**].


 


1.4.   Technology and Patents Developed Pursuant to Services
Agreement.  All (a) technology and patents arising
from Services performed by Digimarc for Nielsen and
paid for by Nielsen and (b) technology and patents that are jointly
developed by Nielsen and Digimarc arising from Digimarc Services (collectively, the “[**] Technology”)
shall be [**] owned by [**].  For so long
as both the Current Nielsen Products and Services and CIMR
Products and Services licenses are in effect and subject to Digimarc’s
pre-existing agreements (as of the Effective Date, and as may be amended and/or
extended from time to time in ways consistent with the relevant terms as they
exist as of the Effective Date), Digimarc covenants
that it shall [**] right, license or permission in or to any [**] Technology
[**] the fields of CIMR Products and Services and [**]in which
Nielsen conducts such activities as of the Effective Date (“[**]”).


 


1.5.         License Limitations and Exclusions.


 


1.5.1.      Pre-existing
License.  The
licenses for Current Nielsen Products and Services and CIMR
Products and Services do not cover products and services covered by the license
from Digimarc to [**], later [**] to Nielsen [**].


 


1.5.2.      Excluded
Applications.  Neither Current
Nielsen Products and Services nor CIMR Products and
Services shall include: [**].


 


1.5.3.      Sell and Offer
to Sell Defined.  The terms “Sell”
and “Offer to Sell” and other forms of such terms,
with respect to software products, mean the granting of licenses to use such
software products in accordance with this Agreement.


 


1.5.4.      No implied licenses.  Nothing contained in this Agreement will be construed as conferring by
implication, estoppel or otherwise, any license or
other right under any patent rights or other industrial or intellectual
property rights of either party except for the licenses expressly granted
herein.  For
the avoidance of doubt, the licenses for Current Nielsen Products and Services
and CIMR Products and Services do not authorize
Nielsen to grant any license concerning any Digimarc
Patents that is not
in connection with the use of CIMR Products and
Services or Current Nielsen Products and Services.


 


2.     Royalties
and Other Consideration for Licenses.


 


2.1.         Consideration Exchanged. 
The minimum royalty payments and ongoing royalties and fees for Digimarc Services set forth in this Agreement provide 


 






** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.


 

















 


partial
consideration for several elements of value provided by Digimarc
including: (i) licenses for both Current Nielsen
Products and Services and CIMR Products and Services;
(ii) use of Digimarc’s technology and market development work prior to the
Effective Date; (iii) [**]; (iv) [**]; and (v) foregoing
potential claims against alleged use of Digimarc
Patents by Nielsen in Current Nielsen Products and Services while that license
is in place.


 


2.2.         Current Nielsen Products and
Services.  The license
for Current Nielsen Products and Services shall remain in effect for so long as
Nielsen is in compliance with payments of CIMR
Royalties and Digimarc Service Fees, the Nielsen
Commitment of Resources, and all other material terms of this Agreement.  The license will become permanent once
Nielsen has paid [**].  The fully paid up
license to Current Nielsen Products and Services will [**], and will continue
in effect prospectively and perpetually without further fees or royalties to Digimarc, and will not be thereafter terminable. [**].


 


2.3.         CIMR Products and
Services.  The license
for CIMR Products and Services shall be royalty
bearing:


 


2.3.1.     Royalties.  Nielsen will pay to Digimarc
royalties on CIMR Net Revenues for each year (a “Royalty
Year”), as follows:


 


	
  In Royalty Year One
  (Jan.1-Sept. 30, 2008)

  	
   

  	
  [**]%

  
	
  In Royalty Year Two
  (Oct. 1, 2008-Sept. 30, 2009)

  	
   

  	
  [**]%

  
	
  In Royalty Year Three

  	
   

  	
  [**]%

  
	
  In Royalty Year Four

  	
   

  	
  [**]%

  
	
  In Royalty Year Five; and
  each year thereafter

  	
   

  	
  [**]%.

  



 


2.3.2                      CIMR Net Revenues.  “CIMR Net Revenues”
means all revenues recognized by Nielsen that are received from, attributable
to, or derived from, the CIMR Products and Services,
such as revenue from [**] fees, from [**], from [**] fees, from [**] fees, from
[**] fees and from [**], less: (i) any
[**].  All CIMR
Net Revenues, including Other Non-Interest Income, shall be calculated in good
faith by Nielsen in accordance with United States generally accepted accounting
principles (“GAAP”).


 


2.3.3                      Minimum Royalties.  Regardless of
the level of CIMR Net Revenues, Nielsen shall
pay to Digimarc, on an equal quarterly basis, annual minimum royalties as follows:


 


	
  In Royalty Year One -

  	
   

  	
  $[**];

  
	
  In Royalty Year Two -

  	
   

  	
  $[**];

  
	
  In Royalty Year Three -
  

  	
   

  	
  $[**];

  
	
  In Royalty Year Four -

  	
   

  	
  $[**]; and

  
	
  In Royalty Year Five -

  	
   

  	
  $[**].

  



 






** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.


 

















 


2.3.4                    Royalty Payments. 
With the exception of the Royalty Year One payments, quarterly payments
of the annual minimum royalties shall be due on the first day of the quarter,
e.g., the first quarterly payment for Royalty Year Two shall be due on October 1,
2008.  The three
quarterly payments (of $[**]) for Royalty Year One shall be due on January 1,
2008, April 1, 2008, and July 1, 2008.


 


2.3.5                    Reports.  Within
sixty (60) days after the end of each quarter in each Royalty Year, Nielsen
will submit to Digimarc a statement in writing, in
the form attached as Appendix B (the “Quarterly License Reporting Statement”),
including with respect to that quarter:  (a) all
CIMR Net Revenues; (b) the royalties owed to Digimarc under this Agreement based on such CIMR Net Revenues; and (c) such other
information reasonably necessary to enable Digimarc
to verify Nielsen’s calculation of royalties payable.


 


2.3.6                    Payment of Royalties in Excess of
Minimums.  Within sixty (60) days after the end of each
quarter of each Royalty Year, Nielsen shall pay to Digimarc
the amount of the royalties owed for that quarter if earned royalties for that
Royalty Year to date exceed the annual Minimum Royalties owed for that Royalty
Year.  Royalty payments (including
annual Minimum Royalties) are nonrefundable and any unused portions of annual
Minimum Royalties do not carry forward into future Royalty Years.


 


2.3.7                    Credits.  If Nielsen has to reverse
previously recognized CIMR Net Revenues reported
under a previous Quarterly License Reporting Statement submitted to Digimarc in any Royalty Year in which Nielsen paid
royalties exceeding the minimum annual royalty, Nielsen can claim a credit on a
subsequent Quarterly License Reporting Statement in the same quarter it
reverses this revenue on its income statement to the extent that it did
actually pay royalties exceeding the minimum annual royalty for that Royalty
Year.  Such credit will not exceed the
amount of royalties to be paid in the then-current quarter, but the unused
credit may be carried over to succeeding quarters until exhausted.


 


2.3.8                    Books and
Records.  Nielsen will maintain documents with respect to the CIMR Net Revenues in accordance with United
States generally accepted
accounting principles (GAAP) and will make complete
and accurate entries concerning all transactions relevant to this Agreement.  All such documents will be kept available by
Nielsen for no less than three (3) years after the end of each Royalty
Year or until the resolution of any dispute between the parties concerning the
payment of royalties that arises within that three-year period.


 






** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.


 

















 


2.3.9                    Audit.  For a period of three (3) years
following the end of any Royalty Year, or until the resolution of any dispute
concerning the accuracy of any Quarterly License Reporting Statement submitted
during that Royalty Year and arising within that three-year period, Digimarc (and its designated agents) shall have the right
to inspect and examine relevant Nielsen documents relating to the calculation
of royalties, provided, however, that Nielsen may redact such documents to
preserve the confidentiality of Nielsen proprietary information that is not
necessary to verify the calculation of royalties.  Any such inspection and examination will take
place upon reasonable prior written notice to Nielsen, during Nielsen’s regular
business hours and no more than once a year. The cost of such inspection and
examination will be borne by Digimarc unless there is
an actual underpayment of more than five percent (5%) by Nielsen in that
Royalty Year, in which case Nielsen will pay the reasonable out-of-pocket cost
of the inspection and examination.


 


2.3.10              Overdue Amounts.  Digimarc will be
entitled to charge, and Nielsen will pay, interest on any overdue amounts or
underpayments under this Agreement at the rate of one percent (1%) per month
(or part thereof), or at such lower rate as may be the maximum rate allowed
under applicable law.


 


3.               Digimarc Services.


 


3.1.      Authorized Services.  Digimarc will perform services for Nielsen relating to the CIMR Products and Services (the “Digimarc
Services”), including research, development, engineering, quality assurance,
market research and development, strategic planning, strategy development,
business development, preparing, obtaining and maintaining patents, project
management, reporting, and such other services or activities as the parties may
mutually agree.  Digimarc
will perform the Digimarc Services in good faith and
with a reasonable standard of quality, but in no event with a standard of
quality less than that Digimarc employs for services Digimarc performs for itself.  The Digimarc
Services shall not include any time or labor spent by Digimarc
in its own strategic planning or the management of its own organization,
outside of the management of the specific activities to be conducted as part of
such Services.


 


3.2         Annual Plan. 
The particular services to be performed and expenditures to be made by Digimarc shall be set forth in an annual plan and budget
(the “Annual Plan”).  The parties shall
mutually agree upon a process for determining the Annual Plan, which shall
state reasonable and specific objectives to be met by Digimarc,
and which shall take into account Nielsen’s strategic goals and operational
experience, Digimarc’s resources and capabilities to
assist Nielsen in achieving those goals, and the market conditions then
prevailing.  The parties shall also
mutually agree upon an informal process for change management and for resolving
disputes concerning determination of the Annual Plan.  In all events, 


 






** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.


 

















 


Digimarc shall make resources available in each
year covered by a timely submitted and reasonable Annual Plan (a “Plan Year”)
sufficient to perform the Services identified in the Annual Plan.  The first Plan Year will begin on October 1,
2007, prior to completion of the Annual Plan, based upon a short statement of
work to be agreed upon by the parties. 
The first Annual Plan will be determined as soon as practicable
thereafter, and no later than December 15, 2007.  Successive Annual Plans shall be determined
no later than ninety (90) days prior to the beginning of each subsequent Plan
Year.  If Digimarc
reasonably believes that any requested changes to the Annual Plan will result
in additional expenditures exceeding those approved by Nielsen in the Annual
Plan, it shall so inform Nielsen.  If
Nielsen and Digimarc agree to the requested changes
and such additional expenditures, they shall amend the Annual Plan to reflect
such changes.  Unless Nielsen authorizes
such additional expenditures in writing, Nielsen shall not be obligated to pay
for Services in excess of the larger of (a) the amount set forth in the Annual
Plan (including as amended pursuant to the preceding sentence) or (b) the
Service Minimum Fee (as defined below).


 


3.3   Quarterly Reporting and Review.  Within thirty (30) days following the end of
each quarter during each Plan Year, Digimarc shall provide
reports stating its progress in achieving the objectives set forth in the
Annual Plan, and describing in detail the Services performed and expenditures
made in that quarter.  The parties shall
mutually agree upon a process for a joint quarterly review of Digimarc’s progress in achieving the objectives set forth
in the Annual Plan, and for considering any changes that either Nielsen or Digimarc may propose to the Annual Plan.


 


3.4   Minimum Service Fees.  Subject to any termination of its obligation
to engage Digimarc to perform Services, Nielsen shall
pay, in equal quarterly payments as set forth below, the following minimum
annual amounts for Services in each Plan Year (the “Minimum Service Fees”):


 


	
  Annual Plan Period

  	
   

  	
  Plan Year 1

  	
   

  	
  Plan Year 2

  	
   

  	
  Plan Years 3-5

  (per
  year)

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Minimum Fees

  	
   

  	
  $

  	
  [**]

  	
   

  	
  $

  	
  [**]

  	
   

  	
  $

  	
  [**]

  	
   

  
											



 


Quarterly payments of
such fees, including Minimum Service Fees, will be due and payable to Digimarc only for those quarters in which Digimarc performs Services in accordance with a timely
submitted and reasonable Annual Plan, at such levels as would be sufficient to
generate the Minimum Service Fees as set forth above; or if Nielsen fails to
timely submit a reasonable Annual Plan, in which Digimarc
was ready, willing and able to perform such level of Services.  Quarterly
Minimum Service Fee payments are due and payable to Digimarc
on the first day of each quarter in which the Services are to be provided.  There will be no Minimum Service Fee for the
first quarter (beginning October 1, 2007) of the first Plan Year.  The Plan Year 1 Minimum Service Fees, less
actual fees earned in that first quarter, will be spread evenly over the
remaining quarters of that Year.


 






** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.


 

















 


3.5   Labor
Rates.  Labor rates charged for
Services will be as shown in Appendix A. 
The labor rates will be increased by five percent per year, reflecting
an estimate of average rates of wage and benefits cost inflation, and may otherwise
be adjusted by mutual agreement of the parties.


 


3.6   Services Payment Schedule and Invoice.  Digimarc shall
furnish an invoice to Nielsen following each quarter of any Plan Year.  The invoice shall be accompanied by an
itemization of the Services actually performed in that quarter, including an
identification of individual timekeepers, their respective hours and rates, and
the nature of the work performed by them with reference to the objectives of
the Annual Plan.  The invoice shall also
be accompanied by an itemization of those out-of-pocket expenditures reasonably
incurred by Digimarc in performing the Services,
reimbursement of which shall be included in the Minimum Service Fees.  Within thirty (30) days of receipt of such
invoice, Nielsen shall pay for Services actually performed by Digimarc in accordance with the then-current Annual Plan in
that quarter to the extent that the Services actually performed by Digimarc within that Plan Year to date, as reflected in the
cumulative quarterly invoices for that Plan Year, exceed the Minimum Service
Fees owed for that Plan Year cumulatively to date.  If the amount of Services actually performed
and invoiced in that quarter, when added to the amount of Services actually
performed and invoiced in prior quarters of that Plan Year, is less than the
Minimum Service Fees owed for that Plan Year cumulatively to date, Nielsen
shall [**].


 


3.7   Audit
Rights.  For a period of three (3) years
following the end of any Plan Year, or until resolution of a dispute concerning
the accuracy of the invoices or quarterly reports for a particular Plan Year
arising within that three-year period, Nielsen (and its designated agents)
shall have the right to inspect and examine Digimarc’s
books and records relating to the Digimarc Services,
including time records and activity logs, for the purpose of determining
whether Digimarc’s invoices and  quarterly reports for that Plan Year are
accurate; provided, however, that Digimarc may redact such documents to preserve the
confidentiality of Digimarc proprietary information
that is not necessary to verify the accuracy of the invoices or quarterly
reports.  Any such inspection and examination will take place upon reasonable
prior written notice to Digimarc, during regular
business hours and no more than once a year. 
Digimarc shall promptly refund to Nielsen any
amount that the audit shows was overpaid by Nielsen in that Plan Year per the
Agreement and, if the overpayment is greater than 5% of the total payment for
that Plan Year, Digimarc shall also pay the
reasonable out-of-pocket costs of the inspection and examination.


 


3.8   Nielsen Commitment of Resources.   For so long as the CIMR
Products and Services license remains in effect, Nielsen shall use its
reasonable best efforts to develop and support the CIMR
Products and Services, including the commitment of a reasonable amount of
marketing, financial and organizational resources.  In furtherance of those efforts, Nielsen
shall prepare an annual plan for the development and support of the CIMR Products and Services business, shall invite Digimarc to 


 






** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.


 

















 


advise and contribute to the
formation of such plan, and shall share such plan with Digimarc.


 


3.9   Digimarc
Opportunity [**].   For so long as [**], Nielsen
shall provide Digimarc with a reasonable opportunity
to [**].


 


3.10 Limitations on Digimarc Services [**]. 
For as long as Nielsen is timely paying Digimarc for Digimarc Services, Digimarc shall not [**].


 


3.11 Patent
Prosecution.  The parties shall
endeavor to identify potentially patentable inventions arising from the Digimarc Services relating to the [**] Technology.  As such inventions are identified and the
filing of patent applications is agreed upon, [**] will have primary responsibility to
manage the process of applying for and maintaining patents relating to the [**]
Technology.  The parties shall agree upon
a process enabling [**] to have substantial prior review and participation in
the preparation of patent applications relating to [**] Technology.  [**] and [**] shall [**] the reasonable
expenses incurred by [**] in the prosecution and maintenance of such patents on
[**] basis, including expenses incurred after the termination of the
Services.  Notwithstanding the foregoing,
either party may decide, at any time, that it does not wish to pay its share of
the costs of applying for or maintaining patents relating to [**] Technology,
which decision can be made on a jurisdiction by jurisdiction basis.  In that event, the other party has the option
either to abandon the application or patent, or to proceed on its own to pay
the remaining costs of applying for or maintaining the patent.  If either elects not to pay its share of the
costs of applying for or maintaining such patent, notwithstanding that the
other party may elect to apply for and maintain such patent, the parties’
respective ownership and rights in that patent shall otherwise remain
unchanged.  For so long as the Services
portion of this Agreement shall be in effect, all reasonable costs reasonably
incurred by [**] that are to be paid by [**] pursuant to this provision shall be
invoiced by [**] and included in [**].


 


3.12        Patent
Enforcement.  Unless
limited by the covenant of Section 1.4, each party shall have the right to
defend or prosecute its rights in and to the [**] Technology, in its own name,
on its own behalf, and at its own expense.  Each party shall be entitled to retain all
revenue obtained by it from third parties (without accounting to the other) as
a result of any revenue generating activities.


 


3.13        Nielsen
Data Rights Retention.  Nielsen
retains the sole right to use or grant to any third party the right to use, any
[**], as well as [**].  Digimarc will have no right to use or grant any rights of
usage of any [**].


 


3.14        Assertion
and Defense of Patents.  Except as
provided in this section, all defense and litigation of Digimarc
Patents will remain the sole responsibility of Digimarc.  Digimarc has no
duty to enforce any patents.  All defense
and litigation of patents owned or controlled by Nielsen independent of Digimarc (the “Nielsen Patents”), will remain the sole
responsibility of Nielsen.  Nielsen has
no duty to 


 






** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.


 

















 


Digimarc to enforce any Nielsen Patents. 
For so long as Nielsen enjoys a covenant concerning certain [**]
Technology, Nielsen has the right, as between Digimarc
and Nielsen, to bring suit against third parties for infringement of those
patents within those fields and may, if it deems it necessary, join Digimarc as a party to such lawsuits.  In such event, Nielsen shall be solely
responsible for all costs of such litigations and shall be entitled to retain
the proceeds from any such case to the extent they relate to infringement
occurring within the [**] fields.  Any
proceeds relating to infringement occurring outside the [**] field shall be shared
with Digimarc on [**] basis, after the deduction of
[**].


 


4.              Remedies
for Breach.


 


4.1.         Responsibility
for Performance.  Nielsen
(US) shall be solely responsible for its performance under this Agreement. A
breach by a Subsidiary or by an Affiliate shall be deemed to be a breach by
Nielsen (US).


 


4.2.         Remedies for Breach. 
If either party materially breaches this Agreement, the non-breaching
party may, in addition to other remedies at law and in equity, terminate this
Agreement.  Prior to terminating this
Agreement for breach, the non-breaching party must first give the
breaching party written notice specifying in detail the alleged breach.  The breaching party shall then have sixty
(60) days to cure such breach.


 


5.              Termination.


 


5.1       Nielsen Option
to Terminate After Two Years.  Within thirty days after the second
anniversary of the
Effective Date, Nielsen may terminate this Agreement if,  in
its reasonable judgment, the market opportunity for CIMR
Products and Services has not been realized. 
Notwithstanding the foregoing, the parties agree that the market
opportunity will be considered to have been realized if the CIMR
Products and Services generate CIMR Net Revenues of
at least $3.75 million in the third calendar quarter of 2009.


 


5.2       Nielsen Option to Terminate After Five Years.   Nielsen may
terminate this Agreement at any time after the fifth anniversary of the Effective Date for
any reason or no reason.


 


5.3       Termination by Digimarc
Due to Patent Challenges by Nielsen.  If Nielsen
files an action challenging the validity or enforceability of any Digimarc Patents (except as a defense or counterclaim to an
action for infringement brought by Digimarc or its
assignee), Digimarc can: (i) before
the Current Nielsen Products and Services license becomes permanent under Section 2.2,
terminate either or both of the Current Nielsen Products and Services license
and/or the CIMR Products and Services license; and (ii) after
that time, terminate the CIMR Products and Services
license.


 






** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.


 

















 


5.4       Termination of CIMR License
Due to Failure to Meet Working Requirements.   Following any Royalty Year
after Royalty Year Five of
this Agreement, Digimarc may terminate the CIMR Products and Services license, with prospective effect
only, if Nielsen does not pay Digimarc: (a) at
least $[**] in royalties for a Royalty Year within sixty (60) days following
the end of that Royalty Year; or (b) if royalties for a Royalty Year are
less than $[**], a lump sum payment equal to the difference, to be made within
sixty (60) days following the end of that Royalty Year.


 


5.5       Notice of Termination.  
Any termination of this Agreement by either party for any reason other
than the material breach of the other party shall be made on no less than
ninety (90) days’ notice to the other party.


 


5.6       Effects of Termination. 
Termination of this Agreement by either party prior to the fifth anniversary of the Effective Date will
automatically terminate the licenses for CIMR
Products and Services and for Current Nielsen Products and Services, unless
Nielsen agrees to pay, and does pay, [**], in that latter case, only the
license for CIMR Products and Services will
automatically terminate. Thereafter, if Nielsen elects to terminate after five
years pursuant to Section 5.2, the license for CIMR
Products and Services will automatically terminate.  In the event of termination
of either or both licenses for any reason, [**].  In other words, [**].  Digimarc will not be barred from [**].  If either, or both, of the
Current Nielsen Products and Services or the CIMR
Products and Services licenses are terminated, the covenant in Section 1.4
with respect to [**] Technology shall automatically terminate. After termination of the CIMR
Products and Services license, Nielsen shall have no right to use trade secrets
or other information and plans of Digimarc in the CIMR Products and Services. 
[**].


 


6.              Other
Provisions.


 


6.1.         Press Release.  The
parties will issue a mutually agreeable press release, similar to the one in
Appendix C, relating to the subject matter of this Agreement no later than four
days after execution of this Agreement.  Except as expressly permitted herein, neither party will make public
announcements or issue press releases relating to this Agreement without the
prior written consent of the other party, which consent or refusal will not be
unreasonably withheld.


 


6.2.         Confidentiality. 
Each party agrees that it will treat this Agreement as confidential and
will handle confidential information of the other party in a manner consistent
with the policies and practices of that party for handling its own confidential
information.  Notwithstanding the
foregoing, either party may provide a copy of this Agreement to a third party
considering in good faith a bona fide transaction as contemplated in Section 6.4,
provided that such third party agrees in writing to be bound to a
confidentiality agreement customary to such transactions and prohibiting use of
its knowledge of this Agreement or its 


 






** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.


 

















 


provisions for any competitive purpose.  Upon request by the disclosing party with
respect to specifically identified information, the receiving party will return
to the disclosing party or destroy all of the confidential information in the
receiving party’s possession or control furnished to it by the disclosing party
which the receiving party does not need to retain in order to perform any
obligations imposed, or exercise any rights (including rights of ownership)
acquired, by this Agreement, and shall certify in writing its return or
destruction of such confidential information. 
If the receiving party is subject to judicial or governmental
proceedings or is subject to government regulations requiring disclosure of
confidential information of the disclosing party, then prior to disclosing such
information, the receiving party will provide the disclosing party with
reasonable prior notice for the disclosing party to seek a protective order for
confidential treatment of the confidential information and will only disclose
that information that is necessary and required.  If the entire Agreement is terminated, the
obligations set out in this Section will extend for a period of [**] years
from this termination date, except that the confidential information of the
disclosing party that is specifically identified by it as a trade secret will
be protected for a period of [**] years.


 


6.3.         Non-solicitation.  Neither party will, directly or through a third party,
during the period of the Digimarc Services and for a
period of [**] after the end of such Services, solicit or entice away those key
employees of the other party specifically identified to it by name in Appendix
E hereto (as may be amended from time to time at the sole discretion of either
party), provided that the foregoing will not prohibit either party from hiring
or soliciting to hire any person (a) responding to general advertising or
general solicitations (including solicitations by recruiting firms retained by
a party and not directed at the employees of the other party), or (b) who
has been terminated by another party, or (c) has not been employed by the
other party during the [**] preceding any such action.


 


6.4.         Assignment.  Neither party may assign any of
its rights or obligations under this Agreement to any person without the prior
written consent of the other, and any such purported assignment shall be null and void from
inception; provided, however, that (a) either party may assign all its
rights and delegate all its obligations hereunder to a single person without
such approval in connection with: (i) a merger,
consolidation, reorganization, statutory conversion, amalgamation or similar
corporate transaction, or (ii) a sale or other disposition of all or
substantially all of its assets in the businesses relating to this Agreement,
and (b) Nielsen may assign all its rights and delegate all its
responsibilities to an Affiliate in connection with a restructuring or
reorganization of Nielsen.  In the event
that Digimarc assigns this Agreement to [**] (an “Assignee”)
pursuant to this provision, the Digimarc Patents
subject to the licenses granted in this Agreement shall include [**].


 






** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.


 

















 


6.5.         Bankruptcy.  Any
intellectual property licenses and rights granted to either party hereunder or
pursuant hereto are, and will be deemed to be, for purposes of Section 365(n) of
the United States Bankruptcy Code (“Code”) licenses of “intellectual property”,
as defined under the Code. 
Notwithstanding any provision contained herein to the contrary, if a
party is under any proceeding under the Code and the trustee in bankruptcy of that
party, or that party as a debtor in possession, rightfully elects to reject
this Agreement, then the other party pursuant to the relevant portions of Section 365(n) of
the Code may retain any and all of such other party’s licenses and rights
hereunder to the maximum extent permitted by law.


 


6.6.         Tolling.  Nielsen agrees to toll any statute of
limitations and any time limitation on damages under [**] relative to
[**].  In return for this tolling
agreement, Digimarc will not [**].


 


6.7.         Limitations on Damages.  NEITHER DIGIMARC
NOR NIELSEN WILL BE LIABLE UNDER ANY CIRCUMSTANCES OR ANY LEGAL OR EQUITABLE
THEORY, WHETHER IN CONTRACT, TORT, STRICT LIABILITY OR OTHERWISE FOR ANY
INDIRECT, INCIDENTAL, CONSEQUENTIAL, EXEMPLARY, RELIANCE, PUNITIVE OR SPECIAL
DAMAGES ARISING OUT OF THIS AGREEMENT, EVEN IF ADVISED OF THE POSSIBILITY OF
SUCH DAMAGES.


 


6.8.         Infringement Remedies. 
Nothing in this Agreement prevents either party from seeking any
available remedies under patent law for any patent infringement by the other
party in periods when the party does not have a license to that activity
including any remedies available under 35 U.S.C. 281,
283, 284 and 285.


 


6.9.         Governing Law,
Jurisdiction and Venue.  This
Agreement shall be governed by New York law. 
Effective as of the termination date of either license in this
Agreement, Digimarc may seek judgment and remedies
for alleged infringement of its patents in any forum where jurisdiction and
venue are proper, including the United States International Trade Commission or
Government Customs Service proceedings, for alleged infringement occurring
before the License
Initiation Date or after any such license termination date.  All other matters concerning the
interpretation of, or performance under, this
Agreement will be resolved in the state or federal courts in New York applying
New York law and jurisdiction and venue will be proper in such New York courts.


 


6.10.         No
Waiver.  Each and all of the various
rights, powers and remedies of the parties will be considered to be cumulative
with and in addition to any other rights, powers and remedies which such
parties may have at law or in equity in the event of breach of any of the terms
of this Agreement.  The exercise or
partial exercises of any rights, powers or remedies will neither constitute the
exclusive election thereof nor the waiver of any other right, power or remedy
available to such party.  In no event
will any waiver of any rights hereunder constitute the 


 






** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.


 

















 


waiver of such rights in any
future instance unless the waiver so specifies in writing.


 


6.11.                   Notices. 
All notices of breach or early termination must be made in writing.  Any written notice under this Agreement will
be sent by email with a hard copy sent via certified mail, return receipt
requested, or by recognized courier service with tracking capabilities.  The notice will be deemed effective as of the
earlier of (i) the date of delivery, as evidenced
by a delivery receipt or the addressee’s registry, or (ii) five business
days after sending notice to the correct address in the authorized manner.  The addresses of the parties, as set forth
above, will be used for any such notice unless either party hereafter
designates a substitute address in writing in accordance with this provision.


 


The
contacts to address the notices to are:


 


For
Digimarc: Reed Stager, Executive Vice President; with
a co-copy to: General Counsel; and


 


For
Nielsen: James M. O’Hara, President, Media Product
Leadership; with a co-copy to: General Counsel.


 


6.12.                   Integration.  This
Agreement embodies the entire agreement of the parties hereto regarding the
subject matter herein, and supersedes and cancels any and all previous negotiations,
agreements or commitments with respect to them.


 


6.13.                   Severability. 
If any provision of this Agreement is held to be void or unenforceable,
the parties agree that such determination will not result in the nullity or
unenforceability of the remaining portions of this Agreement.  The parties further agree to replace such
void or unenforceable provisions of this Agreement with valid and enforceable
provisions that will achieve, to the extent legally permissible, the economic,
business and other purposes of the void or unenforceable provisions and that
reflect the intent of the parties when entering into this Agreement.


 


6.14.                   Amendments.  This Agreement may not be modified in any
manner except by an instrument in writing duly signed by each of the parties
hereto.


 


6.15.                   Construction. 
Each party and its counsel have participated fully in the review and
revision of this Agreement.  Any rule or
construction to the effect that ambiguities are to be resolved against the
drafting party will not apply in interpreting this Agreement.


 


6.16.                   No Agency. 
Nothing in this Agreement will be construed as creating any agency,
partnership or other form of joint enterprise between Digimarc
and Nielsen.  The relationship between Digimarc and Nielsen will at all times be that 


 






** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.


 

















 


of independent
contractors.  Neither party will have
authority to contract for or bind the other in any manner whatsoever.


 


6.17.                   Other Documents. 
Each party hereto will execute any documents which may be necessary or
advisable to carry out or effectuate the foregoing.


 


6.18.                   Survival. 
Upon expiration or termination of this Agreement, rights to payment
under this Agreement and the provisions set out in Sections 2.3.5-2.3.10,
3.11-3.14, 4, 5.6 and 6.2-6.19 will remain in effect.


 


6.19.                   Counterparts. 
This Agreement may be executed in separate counterparts, and by
facsimile, each of which will be deemed an original, and when executed, separately
or together, will constitute a single original instrument, effective in the
same manner as if the parties had executed one and the same instrument.


 






** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.


 

















 


	
  DIGIMARC CORPORATION

  	
  THE NIELSEN COMPANY (US), 

  
	
   

  	
  INC.

  
	
   

  	
   

  
	
  By:

  	
  /s/ Robert P. Chamness

  	
   

  	
  By:

  	
  /s/ James O’Hara

  
	
  (Signature)

  	
  (Signature)

  
	
   

  	
   

  
	
  Robert P. Chamness

  	
  Name: James O’Hara

  
	
   

  	
  (Please print)

  
	
   

  	
   

  
	
  CLO and
  Secretary

  	
  Title: President-Media
  Product Leadership

  
	
   

  	
   

  
	
  Date: November 27,
  2007

  	
  Date: November 27,
  2007