Document:

EXHIBIT
10.4

 

CONFIDENTIAL PORTIONS OMITTED

 

COUNTERFEIT
DETERRENCE SYSTEM

DEVELOPMENT
AND LICENSE AGREEMENT

 

This
Counterfeit Deterrence System Development and License Agreement (the “Agreement”)
is made

 

Between

 

DIGIMARC
CORPORATION, a corporation incorporated
under the laws of Oregon and having its head office at One Centerpointe Drive, Suite 500,
Lake Oswego, Oregon. U.S.A.  97035-8615                                                (“Digimarc”)

 

and

 

[**]

 

Recitals

 

Digimarc has
expertise in, and owns extensive intellectual property, including patents,
patent applications, copyrights and trade secrets, [**].

 

[**] possesses
or will possess the right to grant licences in respect of intellectual property
rights related to the application of such intellectual property to the
detection and deterrence of bank note counterfeiting.

 

Digimarc and
[**] have cooperated in the development of means, using such intellectual
property, to detect and deter the counterfeiting of bank notes [**].

 

The CDS is an
improvement to Digimarc’s existing copyright protection system for deterring
personal computer-based counterfeiting of bank notes.

 

The CDS has
[**].

 

[**]  In return, [**] will acquire the exclusive
right, as more particularly detailed herein, to grant and direct Digimarc to
[**] to [**] the CDS [**] and [**].

 

[**] is also
investing in certain improvements to [**] and a broadening of the deployment of
the[**] across the personal computer industry. 
In return, [**] during the term of the Agreement [**], as more
particularly detailed herein.

 

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In
consideration of these premises, the covenants set out in this Agreement and
other good and valuable consideration, the receipt and adequacy of which are
acknowledged by each of the parties, the parties agree as follows:

 

1.                                      DEFINITIONS AND PRINCIPLES OF INTERPRETATION

 

1.1                               Definitions - Whenever used in this
Agreement, the following words and terms shall have the meanings set out below:

 

“Agreement” means these articles of agreement, including the Schedules, and
those documents as specified or referenced in this Agreement as forming part of
the Agreement, all as may be amended from time to time;

 

“Allowable
Cost” means a cost of the kind
identified in Schedule I;

 

“Arbitration
Agreement” means the Arbitration
Agreement dated June 21, 1999, a copy of which is attached as Schedule E;

 

“[**]” has the meaning assigned to it by clause 5.1;

 

“[**]”
means that technology, if any, from
the technology described in Schedule “F” in respect of which from time to time
[**] after discussion between the [**] and the [**], [**] offers, and Digimarc
accepts in writing, a [**] on the [**] in clause 8.2 to use, design or
implement the CDS and all Intellectual Property Rights in that [**];

 

“Business
Day” means a day on which both [**]
and Digimarc are open for business at their respective addresses noted above;

 

“CDS
Technology” collectively, means
whatever of the [**], the Digimarc Technology and the Project Technology is
incorporated into the CDS;

 

“Confidential
Information” means information
disclosed during the Term of this Agreement in any form which, if disclosed in
tangible form, is labelled “Confidential”, “Proprietary” or with a similar
legend, or if disclosed orally is information that by its nature would be
understood to be confidential to the Discloser;

 

“Counterfeit
Deterrence System” or “CDS” or “System” means
a system for [**] that includes, without limitation, [**].  The System incorporates means for [**];

 

“Deliverable” for a [**] means a task to be performed or an item to be delivered
by Digimarc to [**], identified in the Statement of Work for [**], and in the
case of a Deliverable [**]Digimarc’s obligations to [**] with the Escrow Agent
as part of the Technical Information;

 

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“Designated
Country” means a country, the [**] of which is designated in writing by [**]
effective on the Effective Date, and any additional country as may be
designated by [**] in writing to Digimarc from time to time;

 

“[**]”
means those portions of the Project
Technology and the Digimarc Technology which relate to [**] including [**];

 

“Device”
means a [**] for a general purpose
[**], or a device [**];

 

“[**]”
means the [**] of a [**];

 

“Digimarc
Contract Authority” means the
President of Digimarc;

 

“Digimarc
Project Manager” means the Project
Manager appointed by Digimarc in accordance with the provisions of clause 4.1;

 

“Digimarc
Technology” means:

 

(a)                                  the technology partially described in Schedule “G” developed or
owned by Digimarc prior to [**] to the extent that it forms part of the CDS,

(b)                                 all Improvements to the technology described in (a) made by or
on behalf of Digimarc other than under this Agreement to the extent that they
form part of the CDS,

(c)                                  all Improvements to the technology described in (a) made by or
on behalf of Digimarc under this Agreement to the extent that they relate to or
form part of the CDS, and

(d)                                 all Intellectual Property Rights in all such technology and
Improvements;

 

“Digital
Watermark” refers to [**] (including
[**]) that are [**] from [**] by [**] of [**], which [**] of [**] and yet do
not significantly [**] from the aesthetics of the [**] or [**] thereby.  Examples include, but are not limited to:

 

1.                                       generally imperceptible changes to [**] or placement in [**];

2.                                       [**] of a substrate, where the [**] substantially uniform to human
touch;

3.                                       slight localized changes to [**] or [**] of a printed document;

4.                                       slight changes to [**]; or

5.                                       [**] of substantially [**];

 

“Discloser” means a party which has disclosed or otherwise made available its
Confidential Information to the other party;

 

“DLA
Contract Authority” means the
Contract Authority designated by [**] in writing to Digimarc from time to time;

 

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“DLA
Project Manager” means the project
manager appointed by the DLA Contract Authority from time to time on notice to
the Digimarc Contract Authority who shall also serve as the person primarily
responsible to conduct inspections on behalf of [**];

 

[**];

 

[**];

 

[**];

 

“Effective
Date” means [**];

 

[**];

 

[**];

 

[**];

 

“Escrow
Agent” means [**], or any mutually
acceptable new custodian appointed pursuant to clause 11.2 or 11.3 of the
Escrow Agreement;

 

“Escrow
Agreement” means the agreement in the
form attached as Schedule M;

 

“Escrowed
Materials” means any and all
materials deposited or to be deposited by Digimarc with the Escrow Agent under
this Agreement and the Escrow Agreement including the Technical Information and
Improvements pertaining to the CDS Technology which shall include but not be
limited to the following:

 

1.                                       details of the deposit including: full name and version details,
number of media items, media type and density, file or archive format, list or
retrieval commands, archive hardware and operating system details;

2                                          name and functionality of each module or application of the Escrowed
Materials;

3.                                       names and versions of development tools;

4.                                       documentation describing the procedures for building, compiling,
executing and using the software which forms part of the Escrowed Materials
([**]);

5.                                       hardcopy directory listings and tables of the contents of the computer
media, manuals and other materials; and

6.                                       name and contact details of employee(s) with knowledge of how
to maintain and support the Escrowed Materials;

 

“Feasibility
Work” means that portion of [**]
performed by Digimarc between [**] and the date of signature of this Agreement;

 

“Improvement” means any change in the CDS Technology or the Technical Information
made by or at the direction of Digimarc after [**] which enhances, whether by 

 

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improvement,
enhancement, correction, addition or otherwise, the properties, characteristics
or manufacture of the CDS including, for greater certainty, [**];

 

“Integration
Support” means the consulting and
programming services to be provided by Digimarc to a [**] on the terms
described in Schedule P attached to assist the [**] to ensure that the [**];

 

“Intellectual
Property Rights” means all
intellectual property rights existing now and in the future including, without
limitation, trade secrets, copyright, database rights, know-how, topographies,
patents and patent applications;

 

“[**]”
means an entity responsible for [**];

 

“Licensed
[**]” means an [**] licensed by
Digimarc pursuant to clause 2.8;

 

“[**]” means an entity, regardless of whether it has a legal status
distinct from that of an [**] pursuant to clause 2.9;

 

“Other
[**] Technology”
means any of the technology described in Schedule F which is not [**]
Technology, but in respect of which Digimarc elects, on written notice given to
the DLA Contract Authority prior to the expiry of the [**] of the Project, to
obtain a licence on the terms set out in clause 8.2 to use in relation to [**]
for a Security Purpose in accordance with clause 9.2;

 

“Person” means any individual or other legal entity, including without
limitation a sole proprietorship, partnership, unincorporated association,
unincorporated syndicate, unincorporated organization, trust, body corporate,
or a natural person in the capacity of trustee, executor, administrator or
other legal representative;

 

[**];

 

[**];

 

[**];

 

[**];

 

“[**]” means the tasks and Deliverables identified in the [**] attached as
Schedule B to be performed or produced [**];

 

“[**]”
means the tasks and Deliverables
identified in the [**] attached as Schedule C to be performed or produced [**];

 

“[**]” means the tasks and Deliverables identified in the [**] attached as
Schedule D to be performed or produced [**];

 

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“Problem
Report” means a report of a problem
addressing as many of the topics specified in Schedule “R” as are relevant to a
reasonable understanding of the problem;

 

“Project
Technology” means the technology
described in Schedule “H” developed by or on behalf of Digimarc under this
Agreement after [**], all Improvements to that technology or to the [**]
Technology or to the Other [**] Technology, and all Intellectual Property
Rights in that technology and those Improvements;

 

“Properly
Embedded” when used in reference to a
[**] means that the [**] is [**] in accordance with the written instructions
provided by Digimarc with the [**] used to [**] and is capable of passing the
Verification Test;

 

“Recipient”
means a party to which the
Confidential Information of the other party has been disclosed or otherwise
made available;

 

“Schedule” means a schedule to this Agreement;

 

[**];

 

“Security
Purpose” means the purpose of [**];

 

“Security
Requirements” means the requirements
for physical security including, without limitation, electronic systems
security set out in Schedule J;

 

“Specifications”
for the CDS or any part thereof means
the specifications for the CDS or part thereof accepted by [**] under this
Agreement;

 

[**];

 

“Statement
of Work” means the Statement of Work
set out in Schedules B, C or D as applicable;

 

“System
Support” means the maintenance and
other support for the CDS described in Schedule “O” attached;

 

“Technical
Information” means all information
including, without limitation, source code, programming instructions,
algorithms, software and other works of authorship, manufacturing and technical
data, drawings, specifications, instruction manuals, user manuals, procedures,
facilities, prices, suppliers’ lists and all other information comprising or
relating to the development of the [**] Technology, or any part thereof, or the
application of the CDS Technology, or any part thereof, in the [**];

 

“Term”
means the period commencing on the
Effective Date and ending on [**];

 

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“Training”
means the training in the use and
operation of the [**] described in Schedule Q;

 

“Verification
Test” means a test or tests developed
by Digimarc as part of the [**] to determine if [**]; and

 

“Work” means the Work that is required to be performed by Digimarc in
order to complete the tasks and deliver the Deliverables and otherwise comply
with its obligations under this Agreement.

 

1.2                               Interpretation - In this Agreement:

 

1.2.1                        unless otherwise specified, all references to money amounts are to
the currency of the United States of America;

 

1.2.2                        the use of words in the singular or plural, or with a particular
gender, shall not limit the scope or exclude the application of any provision
of this Agreement to such Person or Persons or circumstances as the context
otherwise permits;

 

1.2.3                        whenever a provision of this Agreement requires an acceptance,
approval or consent by a party to this Agreement and notice of such acceptance,
approval or consent is not delivered within the applicable time, then the party
shall be conclusively deemed to have withheld the acceptance, consent or
approval;

 

1.2.4                        unless otherwise specified, the number of days within or following
which any payment is to be made or act is to be done shall be interpreted to be
continuous and shall be calculated by excluding the day on which the period
commences and including the day which ends the period and by extending the
period to the next Business Day if the last day of the period is not a Business
Day;

 

1.2.5                        unless otherwise specified, the order of precedence for interpreting
this Agreement shall be:

 

(a)                                  this Agreement, excluding Schedules;

 

(b)                                 the Schedules; and

 

(c)                                  as between the delivery schedules forming part of a Statement of
Work, and other provisions of such Statement of Work, the delivery schedules
shall take precedence.

 

1.2.6                        for greater certainty, a party or representative to which this
Agreement grants the right to make a decision or determination in the sole
discretion of the party or representative is not required to act reasonably in
making the decision or determination and no such decision or determination may
be challenged by the other party under the Arbitration Agreement or otherwise;

 

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1.2.7                        the words “includes” or “including” will be construed as meaning “included
without limitation” and “including without limitation” as the case may be; and

 

1.2.8                        a clause or Schedule, unless the context requires otherwise, is a
reference to a clause to, a Schedule of, or a paragraph of a Schedule to, this
Agreement, as amended from time to time in accordance with this Agreement.

 

1.3                               Applicable Law - This Agreement shall be
construed in accordance with the laws of England to the exclusion of its rules of
conflicts of laws.

 

1.4                               Schedules - The Schedules to this
Agreement, listed below, are an integral part of this Agreement:

 

	
  Schedule

  	
   

  	
  Description

  
	
  Schedule “A”

  	
   

  	
  System Description

  
	
  Schedule “B”

  	
   

  	
  [**]

  
	
  Schedule “C”

  	
   

  	
  [**]

  
	
  Schedule “D”

  	
   

  	
  [**]

  
	
  Schedule “E”

  	
   

  	
  Arbitration Agreement

  
	
  Schedule “F”

  	
   

  	
  [**]

  
	
  Schedule “G”

  	
   

  	
  Digimarc Technology

  
	
  Schedule “H”

  	
   

  	
  Project Technology

  
	
  Schedule “I”

  	
   

  	
  [**]

  
	
  Schedule “J”

  	
   

  	
  Security Requirements

  
	
  Schedule “K-1”

  	
   

  	
  [**]

  
	
  Schedule “K-2”

  	
   

  	
  [**] - Non-[**]

  
	
  Schedule “L-1”

  	
   

  	
  [**]

  
	
  Schedule “L-2”

  	
   

  	
  [**] - Non-[**]

  
	
  Schedule “M”

  	
   

  	
  Escrow Agreement

  
	
  Schedule “N”

  	
   

  	
  Progress Reporting and Project Reviews

  
	
  Schedule “O”

  	
   

  	
  System Support Services Agreement

  
	
  Schedule “P”

  	
   

  	
  Fees for Integration Support and
  Verification Testing

  
	
  Schedule “Q”

  	
   

  	
  Training

  
	
  Schedule “R”

  	
   

  	
  Problem Report

  
	
  Schedule “S”

  	
   

  	
  Proforma Invoice

  
	
  Schedule “T”

  	
   

  	
  Form of Deed of Adherence

  
	
  Schedule “U”

  	
   

  	
  Form of Comfort Letter

  

 

2.                                      SCOPE OF THE WORK

 

2.1                                 Digimarc shall perform [**] in accordance with the [**] and, subject
to [**] acceptance of the corresponding Offer described in clause 2.3, the [**]
in accordance with the [**] and the [**] in accordance with the [**].

 

2.2                                 On or before (i) [**]and (ii) [**], Digimarc shall deliver
to [**] and the DLA Project Manager a written proposal (the “Proposal”) for the
Work to be done [**], which Proposal will 

 

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be in the form of a proposed amendment to
this Agreement and will include, but not be limited to:

 

(a)                                  changes to the Statement of Work for [**];

 

(b)                                 an estimate of the [**] to be incurred by Digimarc in connection
with Digimarc’s performance of the Work for [**]; and

 

(c)                                  the nature, timing and estimated quantity of the effort which will
be required from [**] to enable Digimarc to perform the Work as proposed [**]
including, for greater certainty, the assistance reasonably required from [**].

 

2.3                                 The Proposal for [**] when delivered by Digimarc to [**] pursuant to
clause 2.2 shall be deemed to constitute an irrevocable offer (the “Offer”) to
amend the Agreement.  Digimarc undertakes
and represents that each Proposal will be prepared with all due care and
diligence and that at the date of [**]’ acceptance of each Offer it will not be
aware of any matters within its reasonable control which might or will
adversely affect its ability to perform the Work for the applicable Phase.

 

2.4                                 The Offer (i) for [**] shall remain open until [**] and (ii) for
the [**] shall remain open until [**] for written acceptance by [**] at its
sole discretion.  If requested by the DLA
Contract Authority at least seven (7) days before the expiry date for an
Offer, Digimarc shall prepare and submit a revised Offer to take into account
any reasonable revisions and clarifications to the original Offer requested by
the DLA Contract Authority and [**] will have ten (10) days from receipt
of the revised Offer to accept it.

 

2.5                                 Effective immediately on [**]’ acceptance of the Offer or revised
Offer in respect of a [**], the Statement of Work [**] and all other relevant
provisions of this Agreement will be deemed to have been amended to reflect the
Proposal as accepted by [**].

 

2.6                                 The Term will continue notwithstanding that [**] elects not to
accept the Offer for [**].

 

2.7                                 Pending acceptance, or express or implied rejection by [**] of the
Offer as provided in clause 2.4, the DLA Contract Authority may, in his or her
sole discretion, authorize Digimarc to perform all or part of the Work
described in the Offer (or other Work as agreed between the parties’ respective
Contract Authorities).  If [**] accepts
the Offer for [**], all such authorized Work will be deemed to form part of the
Work [**] to which the Offer relates.  In
any event, [**] shall compensate Digimarc for such authorized Work as though it
were [**].

 

2.8                                 Commencing no later than ten (10) Business Days after every
written request made during the Term by the DLA Contract Authority, Digimarc
shall make an irrevocable offer, which offer shall remain open for acceptance
within sixty (60) days from the date of receipt by [**] to which the Offer is
addressed, to grant to an [**] a [**] to [**] in connection with the [**] of
the [**] on terms no less favourable to that [**] than those set out in
whichever of Schedules “K-1” and “K-2” is applicable.

 

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2.9                                 Commencing no later than ten (10) Business Days after every
written request made during the Term by the DLA Contract Authority or a [**],
Digimarc shall make an irrevocable offer, which offer shall remain open for
acceptance within sixty (60) days of receipt by the [**]to which the Offer is
addressed, to:

 

(a)                                  [**] designated by the DLA Contract Authority or a [**] a [**] to
[**] in connection with [**] of a [**], on terms no less favourable to the [**]
than those set out in whichever of Schedules “L-1” and “L-2” is applicable; and

 

(b)                                 [**] referred to in clause 2.9(a) at no charge and provide the
Training to the [**] for the charges to the [**] described in clause 2.12
within ten (10) Business Days after the [**] acceptance of the offer to
[**], or at such other time as may be agreed between Digimarc and the [**].

 

2.10                           No later than sixty (60) Business Days after every written request
made by a [**] during the Term, Digimarc shall provide Integration Support to
the [**] on a date or dates agreed between Digimarc and the [**] for the
charges described in clause 2.12 provided that in 1999 the sixty (60) Business
Day limit shall apply only to the first three [**] which require such services.

 

2.11                           No later than twenty (20) Business Days after every written request
made by [**] or a [**] during the Term, Digimarc shall conduct Verification
Tests of [**] on a date or dates agreed between Digimarc and the [**] or the
[**], as the case may be, for the charges specified in clause 2.12.

 

2.12                           The amount charged by Digimarc to the [**] or Licensed [**] for the
Training, Integration Support and Verification Tests provided:

 

(i)                                     before the [**], will be determined in accordance with the
provisions of Schedule “P”;

 

(ii)                                  [**], will not be greater than the charge then paid to Digimarc for
similar support by Digimarc’s most favoured customer.

 

2.13                           At any time during the Term following [**]which [**] elects to
proceed with as described in clause 2.4 Digimarc shall on receipt of a written
request from a [**].

 

2.14                           Digimarc shall report to the DLA Contract Authority at least once
each calendar quarter of the Term on Improvements and [**] which Digimarc has
made or caused to be made since the last report.  Promptly following notice by the DLA Contract
Authority, Digimarc [**] the [**] provided to the [**] designated by the DLA
Contract Authority to [**] the [**]. 
Digimarc shall in any event issue the [**] to the [**].  The [**] of such [**] by Digimarc (i) before
[**] of the [**] and (ii) following [**]of the[**] and will be [**].  Notwithstanding the foregoing, [**] an
Improvement into [**] employed by it in [**]. 
Digimarc shall [**] the System Support for the two (2) versions of
[**] which preceded the then current version of [**] or for all versions of
[**] released within 

 

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twenty-four (24) months prior to the date of
issue of the [**], [**] at [**] to the [**] above the [**] for the System
Support.

 

2.15                           Digimarc shall obtain at its own expense all licenses or permits
required to be obtained from the Government of the United States in order for
Digimarc to comply with its obligations under this Agreement including, without
limitation, to [**] and Escrowed Materials, and grant the associated licenses,
to [**] and other licensees.

 

2.16                           Digimarc acknowledges and confirms [**]’ right to enforce clauses
2.9 and 2.11 by an application for specific performance or otherwise.

 

3.                                      PRICE AND PAYMENT

 

3.1                                 In addition to the amounts payable in accordance with clause 8, [**]
shall pay Digimarc [**] for the [**] to the Digimarc Technology granted to [**]
under clause 8 of this Agreement by the later of (a) five (5) Business
Days after the date that the Escrow Agent notifies [**] that it has taken
possession of the reproductions of the Technical Information for the CDS
Technology under clause 8.7 and successfully verified that Technical
Information in accordance with the Verification Process (as defined in the
Escrow Agreement), and (b) thirty (30) days after this Agreement is signed
by both parties.  Both parties will use
their best efforts to ensure the activities in a) are completed within 30 days
after this Agreement is signed.

 

3.2                                 Subject to the limits set out in this Agreement and unless otherwise
expressly set out herein, [**] shall [**] Digimarc for all the [**] reasonably
and properly incurred by Digimarc during each calendar month to perform [**],
and any other Work authorized by [**] in writing, plus a [**] on the [**] (the “[**]”).  Digimarc shall invoice [**] monthly in
arrears for such Costs and [**].  Each
invoice shall specify the time spent by the staff and sub-contractors of
Digimarc in performing the Work and shall give a [**] of the [**] in the form
attached as Schedule S.

 

3.3                                 The amount which [**] is required to pay Digimarc for the [**]
incurred in performing the [**] and [**] in calendar year 1999 will not be
greater than [**].  The amount which [**]
is required to reimburse Digimarc for the [**] incurred in performing [**],
respectively, will not be greater than the estimates for that Work accepted by
[**] pursuant to the provisions of clause 2.4. 
Digimarc shall complete all relevant work notwithstanding that it is
unable to recover [**] incurred in relation thereto due to the operation of the
limits set out in this clause 3.3.

 

3.4                                 Except as otherwise expressly provided herein, the total amount
which [**] will be liable to pay Digimarc for or in connection with the [**]
and [**] for [**] will not be greater than [**] and, assuming that (i) [**]
has accepted Digimarc’s Offer for [**] and, (ii) [**] does not terminate
this Agreement as permitted herein prior to the date on which Digimarc
completes [**] in accordance with the provisions of this Agreement, not less
than [**], subject to Digimarc having performed the Work equal to this amount
of [**] and [**].

 

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3.5                                 If [**] elects
not to proceed with [**] as described in clause 2.4 above, and at the time of
such election [**] has not served notice of breach, or termination for Digimarc’s
default, under clause 15, [**] shall pay Digimarc an amount equal to [**] of
the total amount paid for [**] and the corresponding [**] for the Work done
during the previous nine (9) months.

 

3.6                                 [**] shall pay
Digimarc each amount which [**] owes Digimarc under this Agreement no later
than thirty (30) days after the later of the payment due date and the date on
which [**] receives a detailed and correct invoice for the amount.

 

3.7                                 For a period
commencing on the Effective Date and ending on the date [**] following the last
date on which Digimarc issues an invoice to [**] for [**], Digimarc shall
maintain proper, up-to-date, accurate and complete books, records and other
documentation substantiating [**] invoiced under this Agreement including,
without limitation, time sheets showing the hours spent on each task which
forms part of the Work and receipts for all disbursements.  Digimarc shall produce such books, records
and documentation to [**] or its representatives for inspection and copying at
all reasonable times on request by the DLA Project Manager.

 

3.8                                 Except as
otherwise expressly provided in this Agreement, [**] shall pay Digimarc all
sales, use, goods and services or other similar taxes levied by any government
in the [**] which Digimarc is obliged to collect and remit to such government(s) in
connection with any amount paid by [**] to Digimarc under this Agreement.  Such payments by [**] shall be in addition to
those set forth in clause 3.4.

 

3.9                                 Digimarc is
responsible for, and shall indemnify [**] against, and hold [**] harmless from,
the payment of all taxes levied by any government on or in respect of Digimarc’s
income and any amounts required by law to be paid in respect of social benefits
for Digimarc’s employees relating to or arising out of the performance of the
Work by Digimarc.  If required by law,
[**] shall deduct all such taxes and amounts from the amounts otherwise payable
to Digimarc and remit them to the appropriate authorities.

 

3.10                           [**] may set off
against any amount which [**] owes Digimarc under or in connection with this
Agreement any amount which Digimarc owes [**] under or in connection with this
Agreement.

 

4.                                        PROJECT MANAGEMENT

 

4.1                                 Digimarc shall
designate a responsible individual with adequate authority and competence as
the Digimarc Project Manager whose responsibilities, in addition to those expressly
set out in this Agreement, shall be to serve as project leader and primary
interface with [**].

 

4.2                                 The DLA Project
Manager shall be responsible for coordinating fulfilment by [**] of its
obligations under this Agreement including the provision of all the general
information about [**] that Digimarc may reasonably require in order to perform
its obligations under this Agreement. 
The DLA Project Manager shall have no authority to amend this Agreement,

 

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approve payments or approve or accept Deliverables
or other Work or Proposals on behalf of [**], all of which actions shall be
within the exclusive authority of [**].

 

4.3                                 The Digimarc
Project Manager shall be responsible for coordinating the performance of the
Work by Digimarc but shall have no authority to agree to an amendment of this
Agreement on behalf of Digimarc which action shall be within the exclusive
authority of the Digimarc Contract Authority.

 

4.4                                 Either party’s
Project Manager or Contract Authority may from time to time appoint one or more
persons to represent him or her on prior written notice to the other party’s
Project Manager or Contract Authority.

 

4.5                                 Digimarc shall
not, without first obtaining the written consent of the DLA Contract Authority
which consent will not be unreasonably withheld, remove or replace:

 

(a)                                    any
employee of Digimarc or its authorized subcontractors assigned to do any part
of the Work if the employee or subcontractor is critical to completion of the
Work by Digimarc in accordance with this Agreement; or

 

(b)                                   its
Project Manager.

 

“Critical” means that the Work cannot timely be
completed by Digimarc without such employee.

 

4.6                                 Digimarc shall
replace within a reasonable time under the circumstances any of its employees
or authorized subcontractors engaged in fulfilling its obligations under this
Agreement, including its Project Manager, whose removal is required by the DLA
Contract Authority, provided that the DLA Contract Authority specifies
reasonable cause for such removal in writing.

 

4.7                                 Digimarc
represents that all personnel assigned to do the Work will be employees of
Digimarc. Digimarc shall not engage any subcontractor other than the
subcontractors identified by Digimarc in writing to [**] before this Agreement
was executed to do any part of the Work without first obtaining the prior
written consent of the DLA Project Manager, who may give or withhold such
consent in his or her sole discretion. 
Digimarc undertakes that it shall obtain from each subcontractor prior
to permitting that subcontractor to do any part of the Work a written
undertaking that all Intellectual Property Rights in any Work created by that
subcontractor vest absolutely in Digimarc upon the date of creation. Digimarc
hereby warrants and represents that it has obtained such undertakings from all
subcontractors engaged in relation to the Work prior to the date of execution
of this Agreement.

 

4.8                                 Digimarc shall
report on progress of the Work and conduct progress reviews in accordance with
the provisions of Schedule “N”.

 

4.9                                 In the event that
it becomes evident to either party’s Project Manager that a failure or delay by
either party to perform in accordance with its obligations under this Agreement
will 

 

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result in a material impact on the completion of the
Work in accordance with the applicable Statement of Work, then the relevant
Project Manager shall immediately bring the issue to the attention of the other
party’s Project Manager.

 

5.                                        RESPONSIBILITIES OF [**]

 

5.1                                 [**] shall
perform all tasks assigned to it in the Statement of Work [**] (herein
sometimes referred to as the [**] Tasks).

 

5.2                                 Unless otherwise
expressly set out in this Agreement, [**] shall respond in writing within ten (10) Business
Days to every written request for consent required by this Agreement received
from Digimarc.

 

5.3                                 If [**] is
delayed in complying with any of its obligations under clauses 5.1 or 5.2 for
any reason not attributable to Digimarc, and such delay is the cause of a delay
in the completion and delivery by Digimarc of any Deliverable, then the time
for completion of the Deliverable, and all subsequent Deliverables dependent
thereon, will be extended automatically by one day for each day of delay by
[**] or such other period as may be agreed in writing between the parties’
respective Contract Authorities.  If
Digimarc suffers increased costs by reason of such delay, other than a delay
due to a force majeure event, such costs shall be borne by [**] and shall be in
addition to the [**] otherwise contemplated by this Agreement. If the delay is
due to a force majeure event, such costs shall be borne equally by [**] and
Digimarc, and shall be in addition to the [**]. 
This clause 5.3 sets forth Digimarc’s only remedy for a delay by [**] in
complying with any such obligation.

 

6.                                        CHANGES TO THE WORK

 

6.1                                 Either party may
propose a change to the Work from time to time by submitting a request in
writing to the other party’s Project Manager.

 

6.2                                 On making such a
request or within three (3) Business Days after receiving such a request
from the DLA Project Manager, Digimarc shall inform the DLA Project Manager of
the amount, if any, which Digimarc intends to invoice [**] to investigate
whether the change can be made and the effect the change will have on the
Statement of Work and the [**] for [**].

 

6.3                                 Within ten (10) Business
Days after receiving the written authorization of the DLA Project Manager to
conduct the investigation or such longer period as may be authorized by the DLA
Project Manager, Digimarc shall report to the DLA Project Manager, in writing,
on the results of the investigation.

 

6.4                                 Within ten (10) Business
Days after the DLA Project Manager receives the report, the DLA Contract
Authority shall, on behalf of [**], notify Digimarc whether or not [**]
authorizes the change.

 

** CONFIDENTIAL PORTION OMITTED
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6.5                                 Digimarc shall
not implement any change to the Work until the change is authorized in writing
by the DLA Contract Authority on behalf of [**].

 

6.6                                 Pending receipt
of a written authorization from the DLA Contract Authority, on behalf of [**],
Digimarc shall proceed with the Work in accordance with the Agreement.

 

7.                                        APPROVAL OF DELIVERABLES

 

7.1                                 If Digimarc fails
to produce a Deliverable acceptable to [**] by the date set out in the
applicable Statement of Work, or in the case where the Statement of Work
requires the parties to agree on whether a Deliverable is acceptable, if the
parties fail to agree for any reason by the date specified in the Statement of
Work or, if no date is specified, within ten (10) Business Days after a
party’s Contract Authority asks the other party’s Contract Authority for
agreement, then the DLA Contract Authority may, in its sole discretion, by
written notice to Digimarc, either:

 

(a)                                    allow
additional time for Digimarc to produce a Deliverable acceptable to [**] or for
the parties to come to agreement, whereupon the time for completion of all
other Deliverables which depend on the acceptance or agreement will be
automatically extended by one day for each additional day or such other period
as may be agreed in writing between the parties’ respective Contract
Authorities; or

 

(b)                                   cancel
any further Work on the Deliverable and all Deliverables which depend on the
acceptance or agreement, whereupon the Statement or Statements of Work which
provide for the cancelled Work or Deliverables will be deemed to be amended to
exclude them.

 

7.2                                 Neither party
shall refer for arbitration any failure to agree referred to in clause 7.1.

 

8.                                        INTELLECTUAL PROPERTY MATTERS

 

8.1                                 [**] acknowledges
that Digimarc does not have sufficient basis on which to determine whether [**]
is the owner of the [**] Technology or the Other [**] Technology.

 

8.2                                 [**]
shall grant to Digimarc following Digimarc’s written acceptance of an offer by
[**] to obtain a licence for any [**] Technology a [**] such [**] Technology to
comply with its obligations under this Agreement and any license agreement
entered into as directed or permitted by the DLA Contract Authority under this
Agreement and for no other purpose.

 

8.3                                 Digimarc
acknowledges that [**] does not have sufficient basis on which to determine
whether Digimarc is the owner of the Digimarc Technology or the Project
Technology but as between [**] and Digimarc, Digimarc is the owner of the
Project Technology, the Improvements thereon and the Technical Information
related thereto.  Except as otherwise
provided herein, Digimarc may freely use and license all such technology.

 

8.4                                 Digimarc hereby
grants to [**], effective upon the date specified in clause 8.5, the [**] the
Digimarc Technology and the Project Technology, and all Improvements thereto,
and the Technical Information pertaining to the Digimarc Technology, the
Project Technology and such 

 

** CONFIDENTIAL PORTION OMITTED
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Improvements, and to sublicense the use of the
Digimarc Technology and the Project Technology and such Improvements and
Technical Information to other Persons, for the purposes of [**] the System and
any such component thereof, and making the System and any component available
to others solely for [**].  On the
effective date of the grant of the license referred to above, [**] copy and use
the Escrowed Materials for the purpose of exercising all rights granted under the
license and the Escrow Agent shall be deemed authorized to release the Escrowed
Materials to [**].  The expressions “[**]”
as used in this clause 8.4, shall be deemed to refer to [**].

 

8.5                                 The license
described in clause 8.4 shall take effect on the earliest of:

 

(a)                                    the
date on which the DLA Contract Authority requests in writing the license and
[**] pays Digimarc the difference, if any, between [**] and the total of the
amounts paid and owing to Digimarc pursuant to clause 3.3 above;

 

(b)                                   [**],
subject to payment of all sums properly due to Digimarc under clause 3.2 for
Work completed up to [**];

 

(c)                                    sixty
(60) days following the effective date of termination of this Agreement by [**]
in accordance with the provisions of clause 15.2 (a), (b), (d) or (e) unless
Digimarc demonstrates within such sixty (60) day period that, notwithstanding
the occurrence of the events giving rise to the termination, Digimarc is
willing and able to comply with its obligations under the Agreement; and

 

(d)                                   the
effective date of termination of this Agreement by [**] in accordance with the
provisions of clauses 15.2(c), 15.2 (f), 15.2(g) or 15.3.

 

8.6                                 Digimarc hereby
grants to [**], effective on the date specified in this clause, the [**] the
Digimarc Technology and the Project Technology and all Improvements thereto,
and the Technical Information pertaining to the Digimarc Technology, the
Project Technology and such Improvements, and to sublicense the use of the
Digimarc Technology,  the Project
Technology and such Improvements and Technical Information to other Persons,
for the sole purpose [**] solely for [**]. 
This license shall take effect on written request by the DLA Contract
Authority at any time following the later of the date on which the license
referred to in 8.4 takes effect and the date on which [**] pays Digimarc [**].

 

8.7                                 Upon the date on
which this Agreement is last signed by them, [**] and Digimarc shall sign the
Escrow Agreement and procure that the Escrow Agent signs that Agreement within
thirty (30) days.  Upon complete
signature of the Escrow Agreement, Digimarc shall make available a complete and
accurate copy of the Technical Information for the Digimarc Technology and the
Project Technology existing on April 19, 1999, for collection and the
carrying out of the Verification Process referred to in clause 3.1 by the
Escrow Agent at Digimarc’s premises.

 

** CONFIDENTIAL PORTION OMITTED
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8.8                                 From time to time
during the Term, on no less than five (5) Business Days prior written notice
by the DLA Project Manager, Digimarc shall, at Digimarc’s premises, present
representatives of the Escrow Agent with all the material, in any form, in
Digimarc’s possession or control which contains or describes the Technical
Information pertaining to the Digimarc Technology and the Project
Technology.  The representatives may
identify any or all of such material and Digimarc shall arrange, at the expense
of [**],  for a complete, accurate and
up-to-date copy of the selected material to be made and sent to the Escrow
Agent within five (5) Business Days of the selection being made for
deposit under the terms of the Escrow Agreement.  If [**] exercises the right granted by this
provision 8.8, [**] shall reimburse Digimarc’s costs related thereto which costs
are in addition to the [**] otherwise contemplated by this Agreement.

 

8.9                                 Within twenty
(20) Business Days after the end of each calendar quarter during each Phase,
Digimarc shall update the Escrowed Material in the possession of the Escrow
Agent to reflect all Improvements to the CDS Technology and [**] made by or at
the request of Digimarc during that quarter.

 

8.10                           Nothing in this
Agreement shall be construed to grant any broader license rights than those
expressly granted by the Agreement.

 

8.11                           From
and after the date on which [**] gets access to the Escrowed Materials pursuant
to the Escrow Agreement, [**] shall inform Digimarc within thirty (30) days
after the end of each calendar quarter during the Term of all improvements
relating to (i) [**]; (ii) [**]; (iii) [**]; and (iv) any
other part of the CDS, [**], or caused or permitted to be made, as a result of
access to and use of the Escrowed Materials or the Digimarc Confidential
Information. The first such information shall be provided to Digimarc within
thirty (30) days after the first calendar quarter following said access, and
shall cover improvements made from the date [**] first received, or caused or
permitted others to receive, any of the Escrowed Materials or any Digimarc
Confidential Information.  Following the
provision of the information under this clause 8.11, [**] shall provide to
Digimarc within a reasonable period of time following request, the Technical
Information for those improvements requested by Digimarc in writing.

 

8.12                           [**] hereby
grants to Digimarc [**].

 

8.13                           The license
referred to in clause 8.12 shall continue until this Agreement expires or is
terminated, or until [**]  has no further
rights to the Escrowed Materials and Digimarc Confidential Information,
whichever occurs last.

 

8.14                           For greater
certainty, the obligations set out in clauses 8.11, 8.12 and 8.13 shall not
apply to any improvement which [**] can demonstrate would have been made
irrespective of access to the Escrowed Materials or Digimarc Confidential
Information.

 

8.15                           [**] shall take
all reasonable steps to ensure that Persons, other than its directors, officers
and employees, to whom it allows access to the Escrowed Materials will be
contractually bound in accordance with terms substantially like those set forth
in clauses 8.11, 8.12, 8.13 and 8.14, granting rights in favour of Digimarc.

 

** CONFIDENTIAL PORTION OMITTED
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8.16                           Notwithstanding
any other provision of this Agreement to the contrary, [**]’ right to acquire
the license described in clause 8.4 by payment of the fee described in clause
8.5(a) shall survive termination of this Agreement by [**] in accordance
with the provisions of clause 15.2 (a), (b), (d) or (e) and be
exercisable at any time during a period of sixty (60) days following such
termination.

 

9.                                        SECURITY

 

9.1                                 Unless otherwise
expressly permitted by this Agreement or authorized in writing by the DLA
Contract Authority pursuant to this Agreement, Digimarc shall not use, or
permit or suffer, to be used:

 

(a)                                    [**]

 

(b)                                   the
[**] Technology or the Other [**] Technology for any purpose except solely to
comply with Digimarc’s obligations under this Agreement and any license
agreement entered into as directed by the DLA Contract Authority under this
Agreement.

 

Subject to the restrictions set out in this clause
9.1, Digimarc may, at its option, [**]

 

9.2                                 Notwithstanding
the provisions of clause 9.1, Digimarc may use the [**] Technology, the Other
[**] Technology and the [**], and any Improvements, and the Technical
Information pertaining to the [**] Technology, the Other [**] Technology and
the [**] and such Improvements, to [**] a Security Client for a Security
Purpose.  Such use may continue so long
as:

 

(a)                                    [**];
and

 

(b)                                   [**]

 

9.3                                 Digimarc may, at
any time, make a proposal to the DLA Contract Authority to use the [**]
Technology, the Other [**] Technology and the Technical Information pertaining
thereto, to develop products and services and to license the use of those
products and services to other clients or for other purposes.  The DLA Contract Authority may, in his or her
sole discretion, authorize the proposed use. 
Following authorization, such use may continue so long as:

 

(a)                                    the
use does not have a material adverse impact on the effectiveness for [**]
provided by Digimarc to any Person during the Term for incorporation into any
Device in [**]; and

 

(b)                                   Digimarc
uses its best efforts, including obtaining a legally binding commitment from
the proposed user, to ensure that the proposed user does not use the product or
service or permit or suffer the product or service to be used, for any purpose
other than the permitted purpose.

 

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9.4                                 For the purposes
of clauses 9.2 and 9.3:

 

(a)                                    a
license to use shall not, unless expressly agreed to by the DLA Contract
Authority in his or her sole discretion, include the right to grant a
sublicense to any Person except end-user customers of the licensee; and

 

(b)                                   a “material
adverse impact” will be deemed to arise if, as a result of such use or
enjoyment, a [**] referred to therein fails to meet the Specifications for the
version of the [**] last accepted by [**] under this Agreement.

 

9.5                                 Digimarc shall
supply the DLA Contract Authority with all information reasonably available and
required to evaluate the effect of each use proposed by Digimarc pursuant to
clause 9.3 including, but not limited to, details of the ownership,
affiliations, financial stability, security practises, industry reputation,
business plans and business operations of the proposed user.

 

9.6                                 If Digimarc
learns, or has reasonable cause to believe, that any Person to whom Digimarc:

 

(a)                                    licenses
the use of a product or service as permitted by the DLA Contract Authority
under clauses 9.2 or 9.3 has used, or permitted or suffered to be used, or
proposes to use, or permit or suffer to be used, the product or the results of
the services for any purpose which is not permitted as described above, or

 

(b)                                   has
granted a license as requested by the DLA Contract Authority under clause 2.8
or 2.9 in respect of, or has used, or permitted or suffered to be used, or
proposes to use or permit or suffer to be used, the [**] or the Technical
Information pertaining thereto subject of the license for any purpose other
than as permitted by this Agreement,

 

Digimarc shall immediately notify the DLA Contract
Authority of such unauthorised use and Digimarc shall use its best efforts, at
its own expense, to prevent any further such use including exercising whatever
legal remedies (including, without limitation, an application for injunctive
relief) are available to Digimarc. Digimarc shall, immediately on notice by the
DLA Contract Authority, assign to [**] any right of action which Digimarc may
have in respect of any such further use, or transfer to [**] the control and
conduct of legal proceedings and claims in relation to such use.  Following such assignment or transfer,
Digimarc shall cooperate with [**] to achieve the successful prosecution or, if
directed by [**], settlement, of any such action, proceedings or claims.

 

9.7                                 Digimarc
shall not, except as reasonably necessary to fulfill its obligations under this
Agreement or any license agreement entered into as requested by the DLA
Contract Authority under clause 2.8 or 2.9, enable any product referred to in
clauses 9.2 or 9.3 to produce, display or otherwise make detectable, [**] which
is or may be used in [**] by any Licensed [**].

 

9.8                                 Digimarc shall at
all times comply, and shall ensure that its employees, agents and
subcontractors comply, with the Security Requirements.

 

** CONFIDENTIAL PORTION OMITTED
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10.                                 REPRESENTATIONS AND WARRANTIES OF DIGIMARC

 

10.1                            Digimarc
represents, warrants and undertakes to [**] that from and after the Effective
Date:

 

(a)                                  the
Work will be of professional quality conforming to generally accepted [**]
practices and will be performed at all times in a timely and cost effective
manner and, for greater certainty Digimarc shall employ the standard of care in
performing the work that would be expected of [**] of the same or similar type
as the [**] which comprises the CDS Technology;

 

(b)                                 Digimarc
is duly incorporated and organized and is validly subsisting under the laws of
the State of Oregon, U.S.A. or some other state in the United States with full
corporate power and authority to enter into this Agreement;

 

(c)                                  to
the best of its knowledge, neither this Agreement nor the Work will contravene,
breach, or result in any default under any agreement, permit, by-law, or law or
regulation to which Digimarc is subject or by which it is bound including, for
greater certainty, any laws or regulations in effect in the United States
governing export;

 

(d)                                 this
Agreement when executed and delivered by Digimarc shall constitute a valid and
binding agreement with Digimarc enforceable against Digimarc according to its
terms;

 

(e)                                  Digimarc
owns all rights in and to, or is properly licensed in respect of, the Digimarc
Technology, the Project Technology and the Technical Information pertaining
thereto;

 

(f)                                    Digimarc
will at all material times have the right to grant the licenses to the Digimarc
Technology, the Project Technology and the Improvements thereon and the
Technical Information pertaining to the Digimarc Technology and the Project
Technology and all such Improvements as required by this Agreement; and

 

(g)                                 for
greater certainty, neither the Project Technology, the Digimarc Technology or
Improvements thereon or the Technical Information pertaining to the Project
Technology, the Digimarc Technology or such Improvements infringe any Intellectual
Property Right of any Person.

 

10.2                           Digimarc
represents, warrants and undertakes to [**] that:

 

(a)                                  incorporated
as part of its [**] practices and procedures are those measures and security
procedures commercially and reasonably available on the date for delivery of a
component of the CDS [**]in the CDS that could interfere with the use of the
CDS or corrupt, interfere with or damage any data;

 

** CONFIDENTIAL PORTION OMITTED
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(b)                                 the
CDS shall contain no lock, clock, timer, counter, copy protection feature, replication
device or intentional defects (including but not limited to “viruses” or “worms”
as such terms are commonly used in the computer industry), CPU serial number
reference, or other device which might:

 

	
  (i)

  	
   

  	
  lock, disable or erase the CDS or any data which
  is loaded on the CDS so as to prevent full use of the CDS by authorized
  Persons; or

  
	
   

  	
   

  	
   

  
	
  (ii)

  	
   

  	
  require action or intervention by Digimarc or any
  other Person to allow properly trained and authorized Persons to use the CDS;

  

 

(c)                                  the
source code for the CDS, including that deposited with the Escrow Agent, will,
without reference to Digimarc or any of its employees or authorized
subcontractors, be understandable and usable by expert personnel familiar with
the programming languages, and scientific and processing techniques, used
therein, and will not involve any programming components that such personnel
could not reasonably be expected to understand, and if necessary such source
code shall contain sufficient commentary to enable such personnel to understand
and use such components; the source code for the CDS will support the year 2000
and neither performance nor functionality will be affected by dates prior to,
during and after the year 2000 and, for greater certainty, the CDS will switch
to 1 January 2000 on 1 January 2000, and the year 2000 will be
recognized as a leap year; and

 

(d)                                 the
Technical Information and all other Escrowed Materials deposited with the
Escrow Agent under this Agreement will contain all information in human
readable form and on suitable media to enable an expert technical consultant,
familiar with the scientific and processing techniques used therein, to
understand and use the same without reference to Digimarc or any of its
employees and authorised subcontractors.

 

10.3                           Digimarc
represents, warrants and undertakes to [**] that:

 

(a)                                  [**]
accepted by [**] will meet the Specifications for that version from the date
that it is accepted by [**] until the earlier of the date on which the next
version is accepted by [**] and the last day of the Term; and

 

(b)                                 until
the last day of the Term, [**] provided by Digimarc to any Person for
incorporation into any Device will be capable of meeting the performance
criteria which formed part of the Specifications for the version of the [**] last
accepted by [**] under this Agreement at the time such detector was so
provided.

 

10.4                           [**] will not be
counted in the determination under clause 10.3 as to whether or not an [**]
meets the Specifications.

 

10.5                           If any version of
the [**] fails to meet the Specifications for that version within one (1) year
of the date of acceptance thereof by [**], and such failure could not have been
discovered by 

 

** CONFIDENTIAL PORTION OMITTED
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[**] using reasonable diligence during the
acceptance procedure for that version, then Digimarc shall, at its own expense,
within sixty (60) days after receipt of the Problem Report from the DLA
Contract Authority or the DLA Project Manager or such other period as the DLA
Project Manager may agree, rectify the failure and at the direction of the DLA
Project Manager provide a corrected [**] to which Digimarc had previously
provided the [**].

 

10.6                           If a particular
version of [**]provided by Digimarc to any Person during the Term for
incorporation into any Device, including for greater certainty any version of a
[**], fails to meet the relevant Specifications within one (1) year of the
date of acceptance thereof by [**], and such failure could not have been discovered
by [**] using reasonable diligence during the acceptance procedure for that
version, then Digimarc shall, at its own expense, within sixty (60) days after
receipt of written notice of a Problem Report from the DLA Contract Authority
or the DLA Project Manager or such other period as the DLA Project Manager may
agree, rectify the failure and at the direction of the DLA Project Manager
provide [**] to all Persons to which Digimarc had previously provided such
[**].

 

11.                                 REPRESENTATIONS AND WARRANTIES OF THE [**]

 

11.1                           [**] represents
and warrants to Digimarc that:

 

(a)                                    [**]
has full power and authority to enter into this Agreement;

 

(b)                                   this
Agreement when executed and delivered by [**] shall constitute a valid, binding
and enforceable obligation of [**];

 

(c)                                    [**]
will at all material times have the right to grant the licenses required by
this Agreement to the [**] Technology and the Technical Information pertaining
to the [**] Technology;

 

(d)                                   from
and after the date on which [**] gets access to the Escrowed Materials (the “Release
Date”) as provided by clause 8.4 or 8.6 above until the last day of the Term,
every [**] which [**] develops, permits, or causes to be developed using the
Escrowed Materials for incorporation into any Device will be capable of [**]
with the same or better performance ([**]) than the version of the [**] last
accepted by [**] possessed on the Release Date on which [**] gets access to the
Escrowed Materials.

 

11.2                           [**] makes no
representations, warranties or undertakings that [**] has any right to grant
any license in respect of any Other [**] Technology or grant the licenses
required to be granted by clause 8.12 in relation to any improvements referred
to therein and in each case Digimarc shall be solely responsible for determining
that any Other [**] Technology and/or such improvements are suitable for the
intended use and for the consequences of any use of the same, whether by
Digimarc or others, and [**] hereby disclaims all liability in connection
therewith.

 

11.3                           For greater
certainty, the provisions of clauses 16.5 and 16.6 shall not apply to any Other
[**] Technology.

 

** CONFIDENTIAL PORTION OMITTED
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12.                                 CONFIDENTIALITY

 

12.1                           Except as
otherwise expressly permitted by this Agreement, a Recipient shall not use,
reproduce or disclose the Confidential Information of the Discloser for any
purpose other than as reasonably necessary to comply with its obligations under
this Agreement or to exercise any rights or licenses granted to it under or
pursuant to this Agreement.

 

12.2                           The Recipient
shall protect the Confidential Information of the Discloser from disclosure by
using the same degree of care, which shall be no less than a reasonable degree
of care, as the Recipient uses to protect its own confidential information.

 

12.3                           On written
request from the Discloser, the Recipient shall return, or certify the
destruction of, all originals and copies of the Discloser’s Confidential
Information in the Recipient’s possession or control which the Recipient does
not need to retain in order to perform any obligations imposed, or exercise any
rights acquired, by this Agreement.

 

12.4                           A Recipient may,
on a need to know basis, and only for the purposes described in clause 12.1,
give the other party’s Confidential Information to the Recipient’s employees,
authorized subcontractors or representatives provided that such employee,
subcontractor or representative shall have entered into a non-disclosure
agreement in respect of such Confidential Information in favour of the
Discloser on terms materially similar to the provisions of this clause 12.  For greater certainty, [**]’ representatives
shall include the DLA Contract Authority, the DLA Project Manager and all
representatives of members of [**].

 

12.5                           The obligations
set out in this clause 12 will not apply to any Confidential Information that:

 

(a)                                    is
or becomes publicly available other than through the fault of the Recipient;

 

(b)                                   was
known to the Recipient prior to disclosure as shown by documentation sufficient
to establish such knowledge;

 

(c)                                    was
or is lawfully disclosed to the Recipient by a third party who did not breach
any obligation of confidence by such disclosure and who made the disclosure
without restriction on further disclosure all of which is shown by
documentation sufficient to establish same; or

 

(d)                                   is
required by law to be disclosed provided, however, that the Recipient shall
first give written notice to the Discloser before the disclosure so that the
Discloser may seek an appropriate protective order.

 

The fact that Confidential Information, or any part
thereof, can be linked together by a search of publications and other
information, followed by a selection of a series of such items of knowledge
from unconnected sources, and fitting together those items of knowledge so as
to 

 

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

 

 

duplicate or recreate any item of Confidential
Information, shall not be deemed to cause the Confidential Information, or any
part thereof, to be included within exceptions (a), (b) or (c), above.

 

12.6                           If either party
is required by applicable law or regulation, by legal process or by the U.S.
Securities and Exchange Commission or listing requirements of any exchange or
quotation system on which securities of any party may be listed or quoted, to
disclose the terms of this Agreement (such disclosure being referred to herein
as “Legally Required Disclosure”), such party shall provide the other party
with prompt notice of such requirement so that the other party may seek an
appropriate protective order or remedy. 
In the event the other party fails to obtain an order or remedy that
would permit the requested party not to disclose the required terms, the
disclosure shall be permitted, but the disclosing party will use all reasonable
efforts to have the disclosure treated confidentially by the recipient.

 

12.7                           The [**]
Technology, the Other [**] Technology, and solely for the purposes of clause 12
the [**] insofar as it pertains to [**], and the Technical Information which
pertains solely to the [**] Technology and the Other [**] Technology and those
aspects of the [**], including any [**] which is or may be used [**] by any
Licensed [**], shall be deemed to be the Confidential Information of [**].  Digimarc may disclose such Confidential
Information to a person to whom Digimarc has granted a license pursuant to
clause 9.2 or 9.3 but only if:

 

(a)                                    Digimarc
can demonstrate to the reasonable satisfaction of [**] that disclosure is
necessary to enable Digimarc to grant the license under clause 9.2 or 9.3; and

 

(b)                                   such
person enters into a non-disclosure agreement in respect of such Confidential
Information in favour of [**] on terms materially similar to the provisions of
this clause 12.

 

12.8                           Nothing in this
Agreement shall be construed to require [**] or any representative of [**]
including, for greater certainty, the DLA Project Manager or the DLA Contract
Authority, to disclose any information which is confidential to a third party
including for greater certainty a [**] or a Licensed [**].

 

12.9                           [**] shall not
reverse-engineer, disassemble, or decompile any [**] forming part of the CDS,
[**] (except to the extent that any such activity is reasonably necessary to
permit [**] to exercise its licence rights under clauses 8.4 and 8.6 of this
Agreement or [**]’ right to do so may not be contractually restricted under
applicable law), and shall contractually ensure that any other Person to whom
[**] provides [**] shall be similarly obliged.

 

12.10                     For greater certainty the
obligations imposed by this clause 12 shall continue to apply to the Escrowed
Material after it comes into the possession of [**] notwithstanding the
circumstances that give rise to such possession.

 

12.11                     General attributes of the
CDS may be [**] in connection with promotion of the CDS to the [**], and to
customers or prospects in related markets; information relating to the [**] may

 

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

 

 

be [**] to [**] vendors of [**] subject to a
nondisclosure agreement but in all such cases Digimarc shall not disclose any
information relating to the [**].  [**]

 

13.                                 AUDIT AND INSPECTION

 

13.1                           [**], or its duly
authorised representatives, may from time to time, without notice, at its own
expense, conduct an audit or inspection during normal business hours to verify
Digimarc’s compliance with its obligations under this Agreement.  Digimarc shall facilitate such audit
activities by providing access to its premises, as well as any books, records,
and other information relating to this Agreement and the Work as may be
reasonably requested by [**].  [**] shall
promptly advise Digimarc in writing of the results of any audit.  If [**] exercises this right more frequently
than twice in each calendar year, [**] shall reimburse Digimarc’s reasonable
costs related thereto which costs are in addition to the [**] otherwise
contemplated by this Agreement except in the case where the exercise of such
right is reasonably required to follow-up on a non-compliance detected during a
previous audit or inspection.

 

13.2                           If, as a result
of any such audit, [**] is of the view that Digimarc has engaged in or is about
to engage in any act, or has omitted to perform any act, which act or omission
is not in compliance with Digimarc’s obligations under this Agreement, the DLA
Contract Authority may issue to Digimarc a directive requiring Digimarc to
refrain from engaging in such act or to perform such act or acts as the DLA
Contract Authority deems necessary, acting reasonably, for Digimarc to comply
with the Agreement and Digimarc shall promptly comply with such directive at
its own expense.

 

13.3                           No act performed
by [**], its duly authorised representatives or the DLA Contract Authority
pursuant to the provisions of this clause 13 and no omission by any of them to
perform an act pursuant to the provisions of this clause 13 shall in any way
affect Digimarc’s obligation to comply with this Agreement.

 

14.                                 DISPUTE RESOLUTION

 

14.1                           Any Dispute (as
defined in the Arbitration Agreement) shall be finally settled by arbitration
in accordance with the Arbitration Agreement.

 

14.2                           Unless otherwise
agreed between the parties or unless the subject matter of the dispute
resolution proceedings is a party’s right to terminate this Agreement, the Work
shall continue during the arbitration proceedings and payments due to Digimarc
shall not be withheld on account of such proceedings unless that particular
Work or payment is the subject matter of the proceedings.  Notwithstanding the foregoing, [**] may at
its sole discretion instruct Digimarc to continue the performance of that Work,
and Digimarc shall act in accordance with those instructions, subject to
payment in accordance with clause 3.2.

 

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

 

 

15.                                 TERM AND TERMINATION

 

15.1                           This Agreement
shall take effect on the Effective Date and shall remain in force throughout
the Term unless sooner terminated as provided herein.

 

15.2                           [**] may in its
sole discretion terminate this Agreement effective immediately on notice to
Digimarc if:

 

(a)                                    Digimarc
makes a general assignment or any other arrangement for the benefit of its
creditors;

 

(b)                                   a
proposal or arrangement under applicable bankruptcy or insolvency legislation,
or a petition is filed by or against Digimarc under applicable bankruptcy or
insolvency legislation and is not discontinued within thirty (30) days;

 

(c)                                    Digimarc
is declared or adjudicated bankrupt or goes into liquidation;

 

(d)                                   a
liquidator, trustee in bankruptcy, custodian, receiver, administrator,
administrative - receiver, manager, or any other officer with similar power is
appointed over all or any part of the assets and undertaking of Digimarc;

 

(e)                                    Digimarc
commits an act of bankruptcy, institutes proceedings to be adjudged bankrupt or
insolvent, consents to the initiation of such appointment or proceedings or
admits in writing inability to pay debts generally as they become due;

 

(f)                                      Digimarc
assigns the Agreement without [**]`s consent in breach of clause 19.7; or

 

(g)                                   Digimarc
ceases or threatens to cease business.

 

15.3                           Either party may
terminate this Agreement effective immediately on notice to the other party if:

 

(a)                                    the
other party fails, or is unable or unwilling to perform any of its obligations
under this Agreement (hereinafter referred to as a “breach”) and fails to
remedy such breach within sixty (60) days after receiving written notice of
such breach from the other party; or

 

(b)                                   an
event of force majeure (as defined in clause 17) has continued for a period
longer than sixty (60) continuous days or such longer period as the parties may
agree and no satisfactory alternative arrangements have been agreed to continue
the Work.

 

15.4                          Notwithstanding
the foregoing, [**] has no right to terminate this Agreement for breach under
clause 15.3 if the breach consists of a failure by Digimarc to perform a
particular task the performance of which proves to be technically infeasible
provided that the DLA Project Manager has agreed with the Digimarc Project
Manager in writing before the task is commenced that the task may be
technically infeasible.

 

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

 

 

15.5                           As of the
effective date of a termination of this Agreement by Digimarc as permitted by
clause 15.3(a) above, the licenses granted by Digimarc pursuant to clause
2.8 or 2.9 above shall continue but be deemed to be restricted [**].

 

15.6                           Termination of
this Agreement by [**] for any reason in accordance with the provisions of this
clause 15 shall not affect any license granted by Digimarc pursuant to clauses
2.8, 2.9, 8.4, or 8.6 above.

 

15.7                           On termination of
this Agreement by Digimarc or [**] for any reason Digimarc shall within fifteen
(15) Business Days deliver to the Escrow Agent all Work in progress done up to
the effective date of termination, including all Technical Information relating
to such Work, and all Technical Information pertaining to the Digimarc
Technology or the Project Technology which has not previously been deposited with
the Escrow Agent and issue to the DLA Contract Authority a certificate signed
by an officer of Digimarc that it has fully complied with this obligation.

 

16.                                 INTELLECTUAL PROPERTY INDEMNIFICATION

 

16.1                           [**] shall
provide Digimarc with prompt written notice of any claim, demand or action
against [**] based on an allegation that the CDS, the Digimarc Technology or
the Project Technology or any Improvements thereto or any part thereof,
infringes any Intellectual Property Right of any Person (referred to below as a
“Claim”).  [**] shall use its reasonable
efforts to conduct the defence of any Claim in a timely and cost effective
manner.  Digimarc shall, at Digimarc’s
expense, comply with all reasonable requests for assistance from [**] in
connection with the defence of the Claim.

 

16.2                           Notwithstanding
any other provision of this Agreement to the contrary, Digimarc shall indemnify
[**] against and save [**] harmless from all loss, costs, liabilities
including, for greater certainty an award of damages, and expenses, including,
for greater certainty, reasonable legal fees, arising from each Claim.  The obligation set out in this clause 16
shall not apply in respect of any settlement made by [**] without the consent
of Digimarc.

 

16.3                           If the CDS, the
Digimarc Technology or the Project Technology, or any Improvement thereto or
part thereof is held to infringe, or if Digimarc believes that it is likely to
be held to infringe, any of the Intellectual Property Rights described in
clause 16.1, Digimarc shall, in addition to its other obligations set out
above, at its own expense either:

 

(a)                                  procure
for [**] the right to continue using the allegedly infringing materials; or

 

(b)                                 replace
or modify the materials to the reasonable satisfaction of [**] so that they are
no longer infringing but remain functionally equivalent;

 

Failing either of which result [**] may, at its
option, terminate this Agreement without prejudice to [**]’ other rights and
remedies available in law, at equity or otherwise.

 

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

 

 

16.4                          Digimarc
shall provide [**] with prompt written notice of any claim, demand or action
against Digimarc based on an allegation that the [**] Technology or any part
thereof, infringes any Intellectual Property Right of any person (referred to
below as a “[**] Technology Claim”). 
Digimarc shall, at [**]’s expense, comply with all reasonable requests
for assistance from [**] in connection with the settlement or defence of any
[**] Technology Claim.

 

16.5                          Notwithstanding
any other provision of this Agreement to the contrary, [**] shall indemnify
Digimarc against and save Digimarc harmless from all loss, costs, liabilities
including, for greater certainty an award of damages, and expenses, including,
for greater certainty, reasonable legal fees, arising from each [**] Technology
Claim.  The obligation set out in this
clause 16.5 shall not apply in respect of any settlement made by Digimarc without
the consent of [**].

 

16.6                           If the [**]
Technology or any part thereof is held to infringe, or if [**] believes that it
is likely to be held to infringe, any of the Intellectual Property Rights
described in clause 16.4, [**] may, in addition to its other obligations set
out above, at its own expense either:

 

(a)                                  procure
for Digimarc the right to continue using the allegedly infringing materials; or

 

(b)                                 replace
or modify the materials to the reasonable satisfaction of Digimarc so that they
are no longer infringing but remain functionally equivalent.

 

17.                                 FORCE MAJEURE

 

17.1                           If the
performance by either party of any of its obligations under this Agreement is
prevented or delayed by any circumstance of force majeure, which shall mean
fire, flood, earthquakes, war, riots, or insurrection, the party shall
immediately notify the other party.

 

17.2                           The time period
within which the party delayed is obliged to perform its obligations will be
delayed during the period such circumstance exists.  During the period of delay the party delayed
shall use its best efforts to make alternate arrangements satisfactory to the
other party to avoid delay or resume performance.

 

18.                                 NOTICES

 

18.1                           All notices under
this Agreement shall be delivered by fax, or recognized international courier
service.  The notice shall be deemed
effective as of the date of delivery to the address of the party specified
below as evidenced by a delivery receipt or the addressee’s registry of
incoming correspondence.  Unless
otherwise expressly set out in this Agreement, all notices to a party will be
sent to the party’s authorized representative identified below and all notices
from a party will be sent by the party’s authorized representative identified
below.

 

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

 

 

18.2                           Any notice to
DIGIMARC shall be sent to both of, and any notice from Digimarc shall be sent
by either:

 

	
  Mr. Bruce Davis

  	
   

  	
  Mr. William Y.
  Conwell

  
	
  President and CEO

  	
   

  	
  Klarquist, Sparkman, Campbell,

  
	
  Digimarc Corporation

  	
   

  	
  Leigh & Whinston

  
	
  One Centerpointe Drive

  	
   

  	
  121 SW Salmon Street

  
	
  Suite 500

  	
   

  	
  Suite 1600

  
	
  Lake Oswego, Oregon 97035 USA

  	
   

  	
  Portland, Oregon 97204 USA

  
	
  FAX: (503) 968-0219

  	
   

  	
  FAX: (503) 228-9446

  

 

18.3                           Any notice to
[**] shall be sent to both of, and any notice from [**] shall be sent by
either:

 

	
  [**] 

  	
   

  	
  [**] 

  

 

18.4                           A party may
change its address for notice by notice to the other party in accordance with
the provisions of this clause 18.

 

19.                                 MISCELLANEOUS PROVISIONS

 

19.1                           Remedies Cumulative -
Except as otherwise expressly set out in this Agreement:

 

(a)                                    each
and every right, power and remedy of a party will be considered to be
cumulative with and in addition to any other right, power and remedy which such
party may have at law or in equity in the event of breach of any of the terms
of this Agreement;

 

(b)                                   the
exercise or partial exercise of any right, power or remedy will neither
constitute the exclusive election thereof nor the waiver of any other right,
power or remedy available to such party; and

 

(c)                                    a
party terminating this Agreement in accordance with the provisions of this
Agreement will have no liability or obligation to the other as a result of or
with respect to the termination.

 

19.2                           Severability -
If any part of this Agreement is held by an arbitral tribunal appointed
pursuant to the Arbitration Agreement or by any other competent authority to be
void or unenforceable, the parties agree that such determination will not
result in the nullity or unenforceability of the remaining parts of this
Agreement, which will continue in force to the fullest extent permitted by
law.  The parties further agree to
replace such void or unenforceable part of this Agreement with a valid and
enforceable provision that will achieve, to the extent legally permissible, the
economic, business and other purposes of the void or unenforceable part.

 

19.3                           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.

 

 

19.4                           Entire Agreement.  This Agreement is intended by the parties to
be the final expression of their agreement and constitutes and embodies the
entire agreement and understanding between the parties hereto and constitutes a
complete and exclusive statement of the terms and conditions thereof, and will
supersede any and all prior correspondence, conversations, negotiations,
agreements or understandings between the parties relating to the same subject
matter.

 

19.5                           Amendments.  No change in, modification of or addition to
the terms and conditions contained herein will be valid as between the parties
unless set forth in a writing that is signed by an authorized representative of
each party and which specifically states that it constitutes an amendment to
this Agreement.

 

19.6                           Waiver.  No waiver of any term, provision, or
condition of this Agreement will be effective unless in a written document
signed by the waiving party and no such waiver in any one or more instances,
will be deemed to be, or be construed as, a further or continuing waiver of
that term, provision or condition or any other term, provision or condition of
this Agreement.

 

19.7                           Assignment and Successors.  This Agreement may not be assigned, novated
or otherwise transferred by Digimarc without the prior written consent of [**],
which consent shall not be unreasonably withheld.  For the purpose of this Agreement, an
assignment includes a change in the voting control of Digimarc or the sale or
other disposal of substantially all of Digimarc’s assets.  This Agreement and all of its terms,
conditions and covenants are intended to be fully effective and binding, to the
extent permitted by law, on the successors and permitted assigns of the parties
hereto.

 

19.8                           Substitution.  [**] may by written notice to Digimarc at any
time substitute any of the following (“Substitute”) as a party to this
Agreement in place of and in substitution for [**], provided that such notice
is accompanied by a Deed Of Adherence duly executed by the Substitute in the
form attached as Schedule T:

 

(a)                                    any
wholly owned subsidiary of [**];

 

(b)                                   any
[**] existing at the Effective Date or any partnership or joint venture, the
entire economic interest in which is owned by one or more of such [**];

 

(c)                                    any
body corporate, the entire economic interest in which is owned by one or more
of the [**] described in clause 19.8(b); or

 

(d)                                   [**].

 

With effect from the date of such notice the
Substitute shall benefit from the same rights and be subject to the same
obligations as [**] under this Agreement, and [**] shall no longer benefit from
such rights and shall no longer be subject to such obligations.

 

19.9                           Upon exercising
its right of substitution in favour of any wholly owned subsidiary of the [**],
the [**] shall provide Digimarc with a comfort letter in the form attached as
Schedule “U”.

 

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

 

 

19.10                     Captions.  Captions are provided in this Agreement for
convenience only and they form no part, and are not to serve as a basis for
interpretation or construction, of this Agreement, nor as evidence of the
intention of the parties.

 

19.11                     Disclaimer of Agency.  Nothing contained in this Agreement is
intended or will be interpreted so as to constitute the parties to this
Agreement as partners or joint venturers or as agents of each other. Neither
party will have any express or implied right or authority to assume or create
any obligations on behalf of or in the name of any other party or to bind any
other party in any contract, agreement or undertaking with any third party. No
employee of a party shall be deemed or considered to be an employee of the
other party or of both parties.

 

19.12                     Publicity.   The parties agree that from time-to-time it
will be beneficial to both parties to issue press releases and other public
announcements concerning benefits arising from the CDS.  Each party agrees to submit such releases or
announcements for prior approval by the other party which approval may be
withheld by the party in its sole discretion. 
The DLA Contract Authority shall recommend to the [**] that they issue a
communiqué produced by the DLA Project Manager at an appropriate time [**].

 

19.13                     Effectiveness.  This Agreement
shall be effective only after it is signed by both of the parties.

 

19.14                     Ambiguities.   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
shall not apply in interpreting this Agreement.

 

19.15                     Survival.     All
clauses of this Agreement which expressly or by implication are intended to
survive the termination of this Agreement will do so and, for greater certainty
and notwithstanding any provision in this Agreement to the contrary, the
provisions set out in clauses 2.5, 3.6, 3.7, 3.8, 3.9, 3.10, 8.4, 8.6, 8.11 -
8.16, inclusive, 9.1, 9.2, 9.3, 9.7, 10, 11, 12, 13, 14, 16, 18 and 19 of this
Agreement shall survive termination of this Agreement by either party for any
reason.

 

IN WITNESS WHEREOF, this Agreement
has been executed and delivered by the parties hereto as of the Effective Date.

 

	
  [**]

  	
   

  	
  DIGIMARC CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Signature

  	
   

  	
  Signature

  
	
  Name:

  	
   

  	
  Name: 

  	
  Bruce Davis

  
	
  Title:

  	
   

  	
  Title: 

  	
  President & CEO

  
	
  Date

  	
   

  	
  Date:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Signature

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  
	
  Date

  	
   

  	
   

  

 

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

 

 

AMENDMENT TO [**]

DEVELOPMENT AND LICENSE
AGREEMENT

 

This is an Amendment to the [**]
Development and License Agreement (the “Amendment”) made

 

Between

 

DIGIMARC
CORPORATION, a corporation incorporated under the laws
of Delaware and having its head office at 19801 SW 72nd Avenue, Suite 250,
Lake Oswego, Oregon. U.S.A.  97062 ( “Digimarc”)

 

and

 

[**]

 

Recitals

 

Effective 1 January [**],
the above identified parties entered into an agreement entitled the “[**] Development and License Agreement” (hereinafter “the
Agreement”).  The Agreement included
documents listed in Section 1.4 of the Agreement which were made an integral
part of the Agreement.

 

As required under Section 2.2
of the Agreement, by 21 December [**], Digimarc
submitted to [**] a Proposal for the work to be
done during Phase [**].  As required under Section 2.4, Digimarc
submitted to [**] a revised Proposal for the
work to be done during Phase [**].

 

Effective 8 March [**], Digimarc’s Contract Authority, Bruce Davis, duly
appointed J. Scott Carr to represent him in agreeing to amendments to the
Agreement on behalf of Digimarc.

 

In consideration of the
promises and covenants set out in this Amendment and in the Agreement and other
good and valuable consideration, the receipt and adequacy of which are
acknowledged by each of the parties, the parties agree as follows:

 

1.               Change the
address of Digimarc wherever it appears in the Agreement to the address shown
herein.

 

2.               Change the State
of Incorporation of Digimarc wherever it appears in the Agreement from the
State of Oregon, U.S.A. to the “State of Delaware, U.S.A.”

 

3.               Delete the notice
requirement to Mr. William Y. Conwell wherever it appears in the
Agreement.

 

4.               Replace
Attachment 3 of Schedule “B” entitled “[**]” with the
attached page entitled “SCHEDULE ‘B’, AMENDED ATTACHMENT 3: [**].”

 

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

 

 

5.               Replace Schedule “C”
with the attached document entitled “AMENDED SCHEDULE ‘C’ DATED MARCH 14TH
[**] PHASE [**]
STATEMENT OF WORK.”

 

6.               Replace Schedule “I”
with the attached document entitled “AMENDED SCHEDULE ‘I’ ALLOWABLE COSTS.”

 

7.               The parties agree
the above-identified replacement documents for a page of Schedule B and all
of Schedules C and I are, by this reference, made an integral part of this
Amendment and supercede the corresponding documents referenced in Section 1.4
of the Agreement.

 

8.               [**] hereby accepts, under Section 2.5 of
the Agreement, the revised Proposal as evidenced in this Amendment and the
attachments referenced in this Amendment.

 

9.               Unless modified
or superceded by this or other Amendments to the Agreement, all terms of the
Agreement remain in full force and effect.

 

IN WITNESS WHEREOF, this Amendment
to the Agreement has been executed and delivered by the parties hereto as of
the date the last of the parties affixes their signature hereto.

 

	
  [**]

  	
   

  	
  DIGIMARC CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Signature

  	
   

  	
  Signature

  
	
  Name:

  	
   

  	
  Name: 

  	
  Scott Carr

  
	
  Title:

  	
   

  	
  Title: 

  	
  Vice President and General Manager, 

  [**]Programs

  
	
  Date

  	
   

  	
  Date

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Signature

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  
	
  Date

  	
   

  	
   

  

 

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

 

 

AMENDMENT NUMBER TWO TO
THE [**]

DEVELOPMENT AND LICENSE
AGREEMENT

 

This is the second Amendment to the [**] Development
and License Agreement (the “Second Amendment”) made

 

Between

 

DIGIMARC
CORPORATION, a corporation incorporated under the laws
of Delaware and having its head office at 19801 SW 72nd Avenue, Suite 100,
Tualatin, Oregon. U.S.A.  97062                    ( “Digimarc”)

 

and

 

[**]

 

Recitals

 

Effective 1 January [**], the above-identified
parties entered into an agreement entitled the “[**] Development and License
Agreement” (hereinafter “the Agreement”). 
The Agreement included documents listed in Section 1.4 of the
Agreement which were made an integral part of the Agreement.

 

As required under Section 2.2
of the Agreement, by November 22, [**], Digimarc submitted to [**] the
Offer for the work to be done during Phase [**].

 

[**] hereby accepts, under Section 2.5
of the Agreement, the Offer as evidenced in this Second Amendment and the
attachments referenced in this Second Amendment.

 

In consideration of the
promises and covenants set out in this Second Amendment and in the Agreement
and other good and valuable consideration, the receipt and adequacy of which
are acknowledged by each of the parties, the parties agree as follows:

 

1.                                       Replace
Attachment 3 of Schedule “B” entitled “[**]” with the attached page entitled
“SCHEDULE ‘B’, AMENDED ATTACHMENT 3: [**].”

 

2.                                       Replace
Schedule “D” with the attached document entitled “AMENDED SCHEDULE ‘D’ PHASE
[**] STATEMENT OF WORK.”

 

3.                                       Replace
Schedule “I” with the attached document entitled “AMENDED SCHEDULE ‘I’
ALLOWABLE COSTS.”

 

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

 

 

4.                                       The
parties agree the above-identified replacement documents for a page of
Schedule B and all of Schedules D and I are, by this reference, made an
integral part of the Agreement and supersede the corresponding documents
referenced in Section 1.4 of the Agreement.

 

5.                                       Unless
expressly modified by this Second Amendment or other amendments to the
Agreement, all terms of the Agreement remain in full force and effect.

 

6.                                       In
the Agreement, replace paragraph 3.4 with the following:

 

“Except as
otherwise expressly provided herein, the total amount which [**] will be liable
to pay Digimarc for or in connection with the Allowable Costs and Mark-up for
the Phase [**] Work, the Phase [**] Work and the Phase [**] Work will not be
greater than [**] and assuming that (i) [**] has accepted Digimarc’s Offer
for all [**] and, (ii) [**] does not terminate this Agreement as permitted
herein prior to the date on which Digimarc completes the Phase [**] Work in
accordance with the provisions of this Agreement, not less than [**], subject
to Digimarc having performed the Work equal to this amount of Allowable Costs
and Mark-up.”

 

7.                                       In the Agreement, add paragraphs
19.16.1 and 19.16.2 as follows:

 

“19.16.1 No third
party Person shall have any right to enforce any provision of this Agreement
under the Contracts (Rights of Third Parties) Act 1999.

 

19.16.2 Digimarc
covenants that it will take all measures which are reasonably necessary to
ensure that no third party with which Digimarc contracts or may contract has
any right to enforce any provision of this Agreement against the [**] pursuant
to the Contracts (Rights of Third Parties) Act 1999 and, in particular, that it
will make no statements, representations or warranties to any such third party
implying that the latter would have any right to enforce any provision of this
Agreement under the Contracts (Rights of Third Parties) Act 1999.”

 

IN WITNESS WHEREOF, this Second
Amendment to the Agreement has been executed and delivered by the parties
hereto as of the date the last of the parties affixes their signature hereto.

 

	
  [**]

  	
   

  	
  DIGIMARC
  CORPORATION

  
	
   

  	
   

  	
   

  
	
  Signature

  	
   

  	
  Signature

  
	
  Name:

  	
   

  	
  Name: 

  	
  Scott Carr

  
	
  Title:

  	
   

  	
  Title: 

  	
  Vice President and General Manager,

  
	
  Date

  	
   

  	
   

  	
  [**] Programs

  
	
   

  	
   

  	
  Date

  
	
   

  	
   

  	
   

  
	
  Signature

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  
	
  Date

  	
   

  	
   

  

 

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

 

 

AMENDMENT NUMBER THREE TO THE [**]

DEVELOPMENT AND LICENSE
AGREEMENT

 

This is the third Amendment to the [**] Development
and License Agreement (the “Third Amendment”) made by and between

 

DIGIMARC CORPORATION, a
corporation incorporated under the laws of Delaware and having its head office
at 19801 SW 72nd Avenue, Suite 100, Tualatin, Oregon.
U.S.A.  97062 (“Digimarc”)

 

and

 

[**]

 

Recitals

 

Effective 1 January [**], the above-identified
parties entered into an agreement entitled the “[**] Development and License
Agreement” (hereinafter “the Agreement”). 
The Agreement included documents listed in clause 1.4 of the Agreement
which were made an integral part of the Agreement.

 

On 14 March [**] and 28 December [**] the
parties entered into Amendments to the Agreement (hereinafter First and Second
Amendments).

 

In consideration of the promises and covenants set
out in this Third Amendment, in the Agreement, in the First and Second
Amendments and other good and valuable consideration, the receipt and adequacy
of which are acknowledged by each of the parties, the parties agree that the
Agreement as previously amended will be further amended as of 1 January, [**]:

 

1.                                      DEFINITIONS AND PRINCIPLES OF INTERPRETATION

 

The following definitions in
clause 1.1 shall be replaced as follows:

 

“Arbitration Agreement” means
the Arbitration Agreement dated 21 June [**] as amended and attached as
Schedule “E”.

 

“[**]  Technology” means that technology, if any, from the technology
described in Schedule “F” in respect of which from time to time during Phases
[**] of this Agreement and Phases [**] as defined in the [**] Agreement after
discussion between the DLA Project Manager and the Digimarc Project Manager,
[**] offers, and Digimarc accepts in writing, a [**]on the [**] in clause 8.2
to use, design or implement [**] and all Intellectual Property Rights in that
[**];

 

“Digimarc Contract Authority”
means Digimarc’s President or the Vice President,[**];

 

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

 

 

“Phase” means Phase [**]
of this Agreement as the case requires, adjusted if required by any period
added pursuant to clause 5.3 or other changes to the Work authorized pursuant
to clause 6 below;

 

“Statement of Work” means the
Statement of Work set out in Schedules B, C, D, V or W as applicable;

 

Add new Definitions to clause 1.1 as follows:

 

“[**]
Agreement” means the Agreement between
[**] and Digimarc relating to the provision by Digimarc of certain [**]
services effective as of 1 January [**], as amended from time to time.

 

“Phase [**]
means the period from 1 January [**] to 31 December [**];

 

“Phase [**]” means the period
from 1 January [**] to 31 December [**];

 

“Phase [**]  Work” means the tasks and Deliverables identified in the
Phase [**] Statement of Work attached as Schedule V to be performed or produced
during Phase [**];

 

“Phase [**] Work” means
the tasks and Deliverables identified in the Phase [**] Statement of Work
attached as Schedule W to be performed or produced during Phase [**] if [**]
elects to proceed with Phase [**]; and

 

“Project
Manager” means either the Digimarc or DLA Project Manager, as the
context requires.

 

1.2                             Interpretation:

 

Clause 1.2.5 shall be replaced with:

 

1.2.5                              unless otherwise specified, the order of
precedence for interpreting this Agreement shall be:

 

a)                                 the
Amendments to the Agreement with the Third Amendment supplementing the Second
Amendment and the Second Amendment supplementing the First Amendment;

 

b)                                the
other terms of this Agreement, excluding Schedules;

 

c)                                 the
Schedules; and

 

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

 

 

d)            as between the delivery schedules forming
part of a Statement of Work, and other provisions of such Statement of Work,
the delivery schedules shall take precedence.

 

Add new clause 1.2.9 as follows:

 

1.2.9        When a definition or a clause in this
Agreement is described in the Third Amendment as a replacement, the definition
or clause in this Third Amendment replaces the previous definition or clause in
the Agreement. When a new definition or a clause is presented in this Third
Amendment, the new definition or clause in this Third Amendment is considered
added to and incorporated into the Agreement. The changes in this Third
Amendment are referenced by the clauses they appear in the Agreement and such
changes shall not apply to the interpretation of any part of the Agreement
relating to any events, acts or omissions occurring prior to 1 January [**]
unless such events, acts or omissions are relevant to any event, act or
omission occurring on and after that date. Unless expressly modified,
superseded or replaced by this Third Amendment, each term of the Agreement as
amended by the First or Second Amendment remains in full force and effect.

 

1.4                               Schedules

 

In clause 1.4,

 

Replace Schedules E, I, K-1, K-2, L-1, L-2, N and S
as attached; and

 

Add the following new schedules:

Schedule V described as Phase [**] Statement of
Work;

When agreed upon, Schedule W described as Phase [**]
Statement of Work; and Schedule X described as [**]Expenditures.

 

The parties agree the above-identified replacement
document Schedules E, I, K-1, K-2, L-1, L-2, N and S supersede the
corresponding documents referenced in clause 1.4 of the Agreement and such
replacement Schedules together with the new Schedules V, W and X are, by this
reference, made an integral part of the Agreement.

 

2.                                      SCOPE OF THE WORK

 

Add new clauses to clause 2 as follows:

 

2.17                           [**] has accepted Digimarc’s Offer to
perform the Phase [**] Work in accordance with the “Phase [**] Statement of
Work.”  Digimarc shall perform the Phase
[**] Work in accordance with the “Phase [**] Statement of Work.” [**] has no
right to terminate this Agreement during Phase [**], unless [**] terminates
this Agreement under clause 15 before Digimarc completes the Phase [**] Work.

 

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

 

 

2.18                           Subject to [**] acceptance of the
corresponding Offer described in clauses 2.20 and 2.21, Digimarc shall perform
the Phase [**] Work in accordance with the “Phase [**] Statement of Work.”  After acceptance by [**] of the Offer
described in clauses 2.20 and 2.21, [**] has no right to terminate this
Agreement during Phase [**], unless [**] terminates this Agreement under clause
15 before Digimarc completes the Phase [**] Work.

 

2.19                           On or before 15 August [**], Digimarc
shall deliver to [**] and the DLA Project Manager a written proposal (the “Proposal”)
for the Work to be done during Phase [**], which Proposal will be in the form
of a proposed amendment to the Agreement and will include, but not be limited
to:

 

(a)                                  The
Statement of Work for Phase [**] (Schedule W);

 

(b)                                 an
estimate of the Allowable Costs to be incurred by Digimarc in connection with
Digimarc’s performance of the Work for Phase [**]; and

 

c)                                      the nature, timing and estimated quantity
of the effort which will be required from [**] to enable Digimarc to perform
the Work as proposed during Phase [**].

 

2.20                           The Proposal for Phase [**] when
delivered by Digimarc to [**] pursuant to clause 2.19 shall be deemed to
constitute an irrevocable offer (the “Offer”) to amend the Agreement.  Digimarc undertakes and represents that the
Proposal will be prepared with all due care and diligence and that at the date
of [**] acceptance of the Offer, it will not be aware of any matters within its
reasonable control which might or will adversely affect its ability to perform
the Work for Phase [**].

 

2.21                           The Offer for the Phase [**] Work shall
remain open for written acceptance by [**] at its sole discretion until the
earlier of 30 November [**] or notice by [**] that it elects not to
proceed with Phase [**].  If requested by
the DLA Contract Authority by November 1, [**], Digimarc shall prepare and
send by November 10, [**] a revised Offer to [**] to take into account any
reasonable revisions and clarifications to the original Offer requested by the
DLA Contract Authority and [**] will have until November 30, [**], subject
to receipt of the revised Offer by November 15, [**], to accept the
revised Offer.

 

2.22                           The Term will continue notwithstanding
that [**] elects not to accept the Offer for the Phase [**] Work.

 

2.23                           Pending acceptance, or express or implied
rejection by [**] of the Offer as provided in clause 2.21, the DLA Contract
Authority may, in his or her sole discretion, authorize Digimarc to perform all
or part of the Work described in the Offer (or other Work as agreed between the
parties’ respective Contract Authorities). 
If [**] accepts the Offer for Phase [**], all such authorized Work will
be deemed to form part of the Work 

 

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

 

 

for Phase [**]. 
In any event, [**] shall compensate Digimarc for such authorized Work as
though it were Phase [**] Work.

 

2.24                           Actions or lack of actions by the [**]
under clauses 2.21 or 2.23 do not waive or delay any notice duties of the [**]
under clauses 3.13-3.17.

 

2.25                           This Third Amendment is conditional upon
execution of an Amendment to [**]between the [**] and the requisite[**]. After
execution of this Third Amendment by [**] and Digimarc, the [**] will proceed
with reasonable diligence to have the Amendment to the [**] fully executed.
When the Amendment to the [**]is fully executed, the [**] will so notify
Digimarc that the condition of this clause 2.25 has been removed from this
Third Amendment.

 

3.                                      PRICE AND PAYMENT

 

Clause 3.7 shall be replaced in relation to Phase
[**] and Phase [**] as follows:

 

3.7                                 For
a period commencing on the Effective Date and ending on the date [**]following
the last date on which Digimarc issues an invoice to [**] for Allowable Costs,
Digimarc shall maintain proper, up-to-date, accurate and complete books,
records and other documentation substantiating the Allowable Costs invoiced
under this Agreement including, without limitation, time sheets showing the
hours spent on each task which forms part of the Work and receipts for all
Expenses (as defined in Schedule I). 
Digimarc shall produce such books, records and documentation to [**] or
its representatives for inspection and copying at all reasonable times on
request by the DLA Project Manager.

 

Add new clauses
to clause 3 as follows:

 

3.11                           Subject to the limits set out in this
Agreement and unless otherwise expressly set out herein, [**] shall reimburse
Digimarc for all the Allowable Costs reasonably and properly incurred by
Digimarc during each calendar month to perform the Phase [**] Work and the
Phase [**] Work (if any) and any other Work authorized by [**] in writing.  Digimarc shall invoice [**] monthly in arrears
for such Allowable Costs.  Each invoice
shall specify the Expenses incurred and the time spent by the staff and
sub-contractors of Digimarc in performing the Work and shall give a breakdown
of the Allowable Costs in the form attached as Schedule S.

 

3.12.1                  Unless [**] terminates this Agreement under clause 15 before Digimarc
completes the Phase [**] Work or terminates [**]before Digimarc completes [**]
Phase [**] (as such expression is defined in the [**] Agreement), and subject
always to clause 3.12.2, the total amount which [**] will be liable to pay
Digimarc for or in connection with the Phase [**] Work and/or for the [**]
Phase [**], will not be less than [**](“[**]”).

 

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

 

 

3.12.2                  [**]obligation to pay the [**] is subject to Digimarc having performed
all of its obligations under this Agreement and the [**] Agreement relating to
the performance of Work and Services (as such expression is defined in the [**]
Agreement) which Digimarc is obliged to perform in connection with Phase [**]
Work and [**] Phase [**], including any Work or Services which Digimarc is
requested to perform pursuant to clause 3.16. 
If [**] requests, under clause 3.16, that Digimarc cease or reduce the
scope of the Work and/or Services remaining to be completed, [**]payment
obligation would still be due.

 

3.13                           If
[**] elects not to proceed with both Phase [**] and [**] Phase [**] and [**]
has provided Digimarc with notice of such election by 30 September [**]
will not owe Digimarc any money for Phase [**] or [**] Phase [**] or have any
other liability to Digimarc in connection with [**] election not to proceed
with Phase [**] or [**] Phase [**]. Such notice will not affect either party’s
obligations under Phase [**] or [**] Phase [**].

 

3.14                           If [**] elects not to proceed with both
Phase [**] and [**] Phase [**] and [**] has provided Digimarc with notice of
such election between October 1, [**] and November 30, [**], then,
subject to clause 3.16,[**] sole liability to Digimarc relative to Phase [**]
and [**] Phase [**] is that [**] shall owe Digimarc an amount equal to
[**]months of Work and Services from the effective date of such notice.  For example, if [**] provides notice on November 30,
[**] of a decision by [**] not to proceed with Phase [**] and [**] Phase [**]
shall owe Digimarc through February 28[**].  The amount of such payment shall be
calculated in accordance with clause 3.15.

 

3.15                           When such notice is provided as in clause
3.14 for both Phase [**] and [**] Phase [**] or if clause 3.18 applies in
respect of both Phase [**] and [**] Phase [**], the amount due Digimarc shall
be calculated as follows:  (i) for
the remainder of [**] in accordance with the remaining financial commitments
made for Phase [**] and [**] Phase [**] by[**]; and (ii) for the relevant
portion of [**] at the rate of [**]per calendar day. If [**] continues with
either Phase [**] or [**] Phase [**], then no payment shall be due under clause
3.14 or clause 3.15 and [**] payment obligation in respect of the Phase which
is not terminated shall be the [**]referred to and payable in accordance with
clause 3.17.

 

3.16                           During
the [**]month period after notice under clause 3.14, or, if clause 3.18
applies, [**] may request, (but it is not obliged to do so) and Digimarc will,
if requested by[**], (a) at [**] sole discretion, cease or reduce the
scope of the Work and/or Services remaining to be completed at the date of [**]
giving notice and/or, (b) if reasonably possible, provide services
relating to Work and/or Services, including work or services relating to the
wind down or transfer of the Work and/or Services to [**] and/or any
replacement provider as reasonably directed by the DLA Project Manager,
commensurate with the payment obligations of the [**] in accordance with clause
3.14.  Such requested work or services
will be deemed to form part of the Work under this Agreement and/or Services
under the [**] Agreement, as applicable. 
If, when operating under this clause, [**] requests Digimarc to cease or
reduce the scope of the Work and/or Services 

 

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

 

 

remaining to be completed,
[**] payment obligations under clauses 3.12.1, 3.14 or 3.18, as applicable,
will still be due.  Sums due under such
obligations will be invoiced monthly in arrears.

 

3.17.1                  If (i) [**] has
accepted the Offer for Phase [**] by Digimarc with notice by November 30,
[**], or (ii) [**] does not terminate [**]before 30 November [**],
then subject always to clause 3.17.2, the total amount which [**] will be
liable to pay Digimarc for or in connection with Phase [**] and/or for [**]
Phase [**] will not be less than [**]unless [**] terminates this Agreement
under clause 15 before Digimarc completes the Phase [**] Work or terminates
[**]

 

3.17.2                  [**]obligation to pay the [**] is subject to Digimarc having performed
all of its obligations under this Agreement and [**] relating to the
performance of Work and Services which Digimarc is obliged to perform in
connection with Phase [**] Work and [**] Phase [**].

 

3.18                           If
by November 30, [**] has not accepted an Offer by Digimarc for Phase [**]
with notice and has provided notice of termination of the [**] Agreement[**],
then, subject to clause 3.16, [**] Sole liability to Digimarc relative to Phase
[**] and [**] Phase [**] is that [**] shall owe Digimarc an amount equal to
[**]months of Work and Services from November 30, [**] through February 28,
[**].  The amount of such payment shall
be calculated in accordance with clause 3.15.

 

3.19.                        For
greater certainty, it is confirmed and agreed that[**], subject to previously
agreed upon Statements of Work under this Agreement and [**] Plans (as such
expression is defined in the [**] Agreement), and in accordance with the
procedures and timescales set out in clause [**] is entitled from time to time
a) to determine in what proportion the [**] referred to in clause 3.12.1 is to
be allocated between Work and/or Services to be performed as Phase [**] Work
and/or [**] Phase [**] Services; and b) to determine in what proportion the
[**] referred to in clause 3.17.1 is to be allocated between Work and/or
Services to be performed as Phase [**] Work and/or [**] Phase [**] Services (if
any).

 

3.20                           Unless
authorized in this Agreement, [**] or otherwise agreed in writing by[**], the
[**] under this Agreement and the [**] Agreement shall not be greater than an
amount equal to the amount listed in Schedule X and the [**] under this
Agreement and the [**] Agreement shall not be greater than an amount equal to
the amount listed in Schedule X.  Such
[**] limitations of this clause 3.20 do not apply to costs or charges
identified in clauses 3.8, 3.21, 6.5, 8.6 and 8.8 of this Agreement or in clauses
3.6, 6.5, 8.2, 15.7 and 19 of the [**] Agreement.  The [**] limitations of this clause may, in
some cases, not apply to costs or charges identified in clauses 5.3 and 13.1 of
this Agreement or in clauses 5.3 and 13.1 of the [**] Agreement.

 

3.21                           Any
equipment or software [**]purchased for over [**] as an Allowable Cost under
Schedule I for [**] shall be owned by the [**] or another entity designated by
the 

 

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

 

 

DLA Contract
Authority and shall be held in trust by Digimarc.  Digimarc will ensure that [**] or the
designated entity is identified on such [**]and [**]as the owner.  Unless such [**]or [**]needs to be used in a
manner that it was not designed for and the [**] is made aware of such need,
Digimarc will, at its own risk, use such [**]or [**]in a reasonably careful and
proper manner and in accordance with all operating instructions. In any event
such [**]and [**]shall be used by Digimarc solely for the provision of the Work
under this Agreement or Services under the [**] Agreement.  Upon termination of this Agreement and at
[**] request, Digimarc will promptly deliver such [**]and [**]to the [**] or
designated entity, at no charge to Digimarc.  
Such [**]and [**]shall be returned in the same condition as originally
received by Digimarc, reasonable wear and tear excepted.  If, however, the [**]or [**]needs to be used
in a manner that it was not designed for and the [**] is made aware of such
need, then such [**]and [**]will be returned “as is.” [**] will reimburse
Digimarc for any unrecovered costs of such [**]or [**](i.e. costs not recovered
through depreciation charges), subject to receipt of a correct and properly due
invoice.

 

5.              RESPONSIBILITIES OF [**]

 

Clause 5.3 shall be replaced as follows:

 

5.3                                 If
[**] is delayed in complying with any of its obligations under clauses 5.1 or
5.2 for any reason not attributable to Digimarc, and such delay will cause a
delay in the completion and delivery by Digimarc of any Deliverable, then
Digimarc shall reasonably promptly advise the DLA Project Manager of the impact
of the delay.  The time for completion of
the Deliverable and all subsequent Deliverables dependent thereon, will then be
extended automatically by one day for each day of delay by [**] or such other
period as may be agreed in writing between the parties’ respective Contract
Authorities.  If Digimarc suffers
increased costs by reason of such delay, other than a delay due to a force
majeure event, such costs reasonably and necessarily incurred by Digimarc shall
be borne by[**].  Digimarc shall make
every reasonable effort to reassign staff and otherwise to mitigate the
increased costs associated with such a delay. 
If the delay is due to a force majeure event, such costs shall be borne
equally by [**] and Digimarc.  If any
additional costs to be borne by [**] would lead to the [**] otherwise
contemplated by this Agreement being exceeded, Digimarc will reasonably
promptly notify the DLA Contract Authority of such and [**] will either approve
of costs beyond the [**] and/or request a change to the Work under clause
6.  Such a change request under clause 6
will ask Digimarc to stay within the [**] and to describe the effect the costs
and delay under this clause 5.3 will have on the applicable [**] Plans or
Statements of Work. If after Digimarc describes the effect the costs and delay
under this clause 5.3 will have on the applicable [**] Plans or Statements of
Work, the DLA Contract Authority requests such a change, Digimarc will
implement such change in [**] Plans and Statements of Work so that Digimarc
remains within the [**] limitations. 
This clause 5.3 sets forth Digimarc’s only remedy for a delay by [**] in
complying with any such obligation.

 

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

 

 

6.                                      CHANGES TO THE WORK

 

Clause 6 shall be replaced
as follows:

 

6.1                                 [**]
or Digimarc may request, a change to the Statements of Work or the [**] Plans
(as defined in the [**] Agreement) from time to time by submitting a request in
writing to the other party’s Project Manager. Such changes directed by [**] may
include allocating development personnel other than the Project Manager to
provide Services under the [**] Agreement in accordance with clause 4.6 of the
[**] Agreement.  Any such request will
indicate the nature of the new work to be performed, and indicate the desired
number and optimum skill set of the personnel to be redirected, in a form
sufficient for Digimarc to investigate the effect of the change.

 

6.2                                 On
making such a change request or within three (3) Business Days after
receiving a change request from the DLA Project Manager, Digimarc shall inform
the DLA Project Manager of the amount, if any, which Digimarc intends to
invoice [**] to investigate the effect the change will have on the applicable
[**] Plans or Statements of Work and the [**] for the applicable [**] Plans or
Statements of Work.

 

6.3                                 Within
ten (10) Business Days after receiving the written authorization of the
DLA Project Manager to conduct the investigation of a change, or such longer
period as may be authorized by the DLA Project Manager, Digimarc shall report
to the DLA Project Manager, in writing, on the results of the investigation.

 

6.4                                 Within
ten (10) Business Days after the DLA Project Manager receives the report,
the DLA Contract Authority shall, on behalf of[**], notify Digimarc whether or
not [**] authorizes the change.  Any
authorized change will include an amendment to the Statement of Work and the
associated [**] Plans to properly state the new obligations of Digimarc.

 

6.5                                 Digimarc
shall not implement any change to the Work until the change is authorized in
writing by the DLA Contract Authority on behalf of[**].  Digimarc shall implement any change directed
and authorized by [**] pursuant to clause 6.4 provided: i) the change is
technically feasible and is within the capabilities of Digimarc; ii) the costs
associated with such change identified by Digimarc in its investigation report
and approved by [**] as part of the approval of the change are borne by [**]
(such costs may be over and above the Phase [**] or the Phase [**]); and iii)
Digimarc is given commensurate relief in the manner and to the extent as
specified in the authorized change from prior commitments under the Statements
of Work and/or the [**] Plans.

 

6.6                                 Pending
receipt of a written authorization from the DLA Contract Authority, on behalf
of[**], Digimarc shall proceed with the Work in accordance with this Agreement.

 

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

 

 

8.                                      INTELLECTUAL PROPERTY MATTERS

 

Clause 8.4, 8.6, 8.8 and 8.9
shall be replaced as follows:

 

8.4                                 Digimarc
hereby grants to[**], effective upon the date specified in clause 8.5, the [**]
the Digimarc Technology and the Project Technology, and all Improvements
thereto, and the Technical Information pertaining to the Digimarc Technology,
the Project Technology and such Improvements, and to [**]the Digimarc
Technology and the Project Technology and such Improvements and Technical
Information to other Persons, for the purposes of [**] the [**] and any such
component thereof, and making the [**] and any component available to others
solely for the[**]  On the effective date
of the [**]referred to above, [**] copy and use the Escrowed Materials for the
purpose of exercising all rights [**]and the Escrow Agent shall be deemed
authorized to release the Escrowed Materials to[**].  The expressions [**] as used in this clause
8.4, shall be deemed to refer to [**] 
The [**]by clause 8.4 applies to Digimarc Technology and the Project
Technology and all Improvements thereto, and the Technical Information
pertaining to the Digimarc Technology, the Project Technology and such
Improvements existing on or before December 31, [**].  Digimarc acknowledges that in accordance with
clause 8.5, the [**]herein is effective as of 15 November [**].

 

8.6                                 Digimarc hereby grants to[**], effective
on the date specified in this clause, the [**] the Digimarc Technology and the
Project Technology and all Improvements thereto, and the Technical Information
pertaining to the Digimarc Technology, the Project Technology and such
Improvements, and [**]the Digimarc Technology, the Project Technology and such
Improvements and Technical Information to other Persons, for the sole purpose
of[**], solely for[**]  This [**] shall
take effect on written request by the DLA Contract Authority at any time
following the later of the date on which the [**] referred to in 8.4 takes
effect and the date on which [**] pays Digimarc[**].  The [**] of clause 8.6 applies to Digimarc
Technology and the Project Technology and all Improvements thereto, and the
Technical Information pertaining to the Digimarc Technology, the Project
Technology and such Improvements existing on or before December 31, [**].

 

8.8                                 From time to time during the Term, on no
less than five (5) Business Days prior written notice by the DLA Project
Manager, Digimarc shall, at Digimarc’s premises, present representatives of the
Escrow Agent with all the material, in any form, in Digimarc’s possession or
control which contains or describes the Technical Information pertaining to the
Digimarc Technology and the Project Technology. 
The representatives may identify any or all of such material and
Digimarc shall arrange, at the expense of[**], for a complete, accurate and
up-to-date copy of the selected material to be made and sent to the Escrow
Agent within five (5) Business Days of the selection being made for
deposit under the terms of the Escrow Agreement.

 

8.9                                 If
so requested by the[**], within twenty (20) Business Days after the end of each
calendar quarter during each Phase, Digimarc shall update the Escrowed Material
in the possession of the Escrow Agent to reflect all Improvements to the [**]
Technology and [**]Updates made by or at the request of Digimarc during that
quarter.

 

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

 

 

Add new clauses to clause 8 as follows:

 

8.17                           Digimarc
hereby confirms and agrees that a) the [**]to [**] by clause 8.4 applies,
effective upon the date specified in clause 8.18, to Digimarc Technology and
the Project Technology and all Improvements thereto, and the Technical
Information pertaining to the Digimarc Technology, the Project Technology and
such Improvements, created between January 1, [**] and the earlier of the
completion of the Phase [**] Work and the termination of this Agreement; and b)
the expressions [**] as used in clause 8.4, shall be deemed to include [**]

 

8.18                           The [**] described in clause 8.17 shall
take effect in respect of each specific item of Digimarc Technology, Project
Technology or Improvements thereto, or Technical Information pertaining to the
Digimarc Technology, the Project Technology or such Improvements created
between 1 January, [**] and the earlier of the completion of the Phase [**]
Work and the termination of this Agreement on the earliest of:

 

a)                                      the date on which both the [**] referred
to in clause 8.4 takes effect and [**] pays Digimarc all sums properly due to
Digimarc under this Agreement for the development of that specific item;

 

b)                                     sixty
(60) days following the effective date of termination of this Agreement by [**]
in accordance with the provisions of clause 15.2 (a), (b), (d) or (e) unless
Digimarc demonstrates within such sixty (60) day period that, notwithstanding
the occurrence of the events giving rise to the termination, Digimarc is
willing and able to comply with its obligations under the Agreement; or

 

c)                                      the
effective date of termination of this Agreement by [**] in accordance with the
provisions of clauses 15.2(c), 15.2 (f), 15.2(g) or 15.3.

 

8.19                           Digimarc hereby confirms and agrees that
any [**]to [**] pursuant to clause 8.6 applies, without any additional payments
over and above that in clauses 8.6 and 8.18, to Digimarc Technology and the
Project Technology and all Improvements thereto, and the Technical Information
pertaining to the Digimarc Technology, the Project Technology and such
Improvements created between January 1, [**] and the earlier of the
completion of the Phase [**] Work and the termination of this Agreement. The
[**] confirmed by this clause 8.19 is effective when both the [**] under
clauses 8.6 and 8.17 take effect.

 

8.20                           Notwithstanding any other provision of
this Agreement to the contrary, [**]right to acquire the [**] described in
clause 8.17 by payments as described in clause 8.18(a) shall survive
termination of this Agreement by [**] in accordance with the provisions of
clause 15.2 (a), (b), (d) or (e) and be exercisable at any time
during a period of sixty (60) days following such termination.

 

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

 

 

10.                               REPRESENTATIONS AND
WARRANTIES OF DIGIMARC

 

Sub-clause (g) of clause 10.1 shall be replaced
as follows:

 

(g)                                 for
greater certainty, with the exception of the [**], neither the Project
Technology, the Digimarc Technology or Improvements thereon or the Technical
Information pertaining to the Project Technology, the Digimarc Technology or
such Improvements infringe any Intellectual Property Right of any person.

 

11.                               REPRESENTATIONS AND
WARRANTIES OF THE [**]

 

Sub-clauses (b) and (d) of clause 11.1
shall be replaced as follows:

 

(b)                                 this Agreement
when executed and delivered by [**] shall constitute a valid, binding and
enforceable obligation of[**].  With
regard to the obligations under the Third Amendment, this representation will
be subject to clause 2.25 of the Third Amendment;

 

(d)                                 from and after the date on which [**]
gets access to the Escrowed Materials (the “Release Date”) as provided by
clauses 8.4, 8.6, 8.17 and 8.19 above until the last day of the Term,
every[**], permits, or causes to be developed using the Escrowed Materials for
incorporation into [**] will be capable of [**]

 

12.                               CONFIDENTIALITY

 

Clauses 12.4, 12.7, 12.9 and 12.11 shall be replaced
as follows:

 

12.4                           A Recipient may, on a need to know basis,
and only for the purposes described in clause 12.1, give the other party’s Confidential
Information to the Recipient’s employees, authorized subcontractors or
representatives provided that such employee, subcontractor or representative
shall have entered into a non-disclosure agreement in respect of such
Confidential Information in favour of the Discloser on terms requiring at least
[**]years of confidentiality from the date of disclosure of such Confidential
Information but that are in all other respects materially similar to the
provisions of this clause 12.  For
greater certainty, [**]representatives shall include the DLA Contract
Authority, the DLA Project Manager and [**].

 

12.7                           The [**] Technology, the Other [**]
Technology, and solely for the purposes of clause 12 the [**]insofar as it
pertains to[**], and the Technical Information which pertains solely to the
[**] Technology and the Other [**] Technology and those aspects of the [**],
including any [**]which is or may be used [**]by any[**], shall be deemed to 

 

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

 

 

be the Confidential
Information of[**].  Digimarc may
disclose such Confidential Information to a person to whom Digimarc has
[**]pursuant to clause 9.2 or 9.3 but only if:

 

a)                                      Digimarc
can demonstrate to the reasonable satisfaction of [**] that disclosure is
necessary to enable Digimarc to [**]under clause 9.2 or 9.3; and

 

b)                                     such person enters into a non-disclosure
agreement in respect of such Confidential Information in favour of [**] on
terms requiring at least [**]years of confidentiality from the date of
disclosure of such Confidential Information but that are in all other respects
materially similar to the provisions of this clause 12.

 

12.9                           [**] shall not reverse-engineer,
disassemble, or decompile any Digimarc software forming part of [**](except to
the extent that any such activity is reasonably necessary to permit [**] to
exercise its licence rights under clauses 8.4, 8.6, 8.17 and 8.19 of this
Agreement or [**] right to do so may not be contractually restricted under
applicable law), and shall contractually ensure that any other Person to whom
[**] provides [**]shall be similarly obliged.

 

12.11                     General attributes of the [**] may be disclosed in
connection with [**]of the [**], and to [**]; information relating to the
[**]and the [**]may be disclosed to [**]and [**]of [**]subject to a
nondisclosure agreement on terms requiring at least [**]years of
confidentiality from the date of disclosure of such Confidential Information
but that are in all other respects materially similar to the provisions of this
clause 12, but in all such cases Digimarc shall not disclose any information
relating to the[**].  The existence and
terms of this Agreement may be disclosed to the parties’ professional advisors,
to members of the[**], and to Digimarc’s present shareholders, institutional
and corporate investors, and commercial and investment bankers, who have a
reasonable need to know such information subject to a non-disclosure agreement.

 

13.                               AUDIT AND INSPECTION

 

Clause 13.1 shall be replaced as follows:

 

13.1                           [**], or its duly authorised
representatives, may from time to time, without notice, at its own expense,
conduct an audit or inspection during normal business hours to verify Digimarc’s
compliance with its obligations under this Agreement.  Digimarc shall facilitate such audit
activities by providing access to its premises, as well as any books, records,
and other information relating to this Agreement and the Work as may be reasonably
requested by[**].  [**] shall promptly
advise Digimarc in writing of the results of any audit.  If [**] exercises this right more frequently
than twice in each calendar year, [**] shall reimburse Digimarc’s reasonable
costs related thereto which costs are in addition to the [**] otherwise contemplated
by this Agreement except in the case where the exercise of such right is
reasonably required to follow-up on a non-compliance detected during a previous
audit or inspection.

 

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

 

 

14.                               DISPUTE RESOLUTION

 

Clause 14.2 shall be replaced as follows:

 

14.2                           Unless otherwise agreed between the
parties or unless the subject matter of the dispute resolution proceedings is a
party’s right to terminate this Agreement, the Work shall continue during the
arbitration proceedings and payments due to Digimarc shall not be withheld on
account of such proceedings unless that particular Work or payment is the
subject matter of the proceedings. 
Notwithstanding the foregoing, [**] may at its sole discretion instruct
Digimarc to continue the performance of that Work, and Digimarc shall act in
accordance with those instructions, subject to payment in accordance with this
Agreement.

 

15.                               TERM AND TERMINATION

 

Clauses 15.6 and 15.7 shall be replaced as follows:

 

15.6                           Termination of this Agreement by [**] for
any reason in accordance with the provisions of this clause 15 shall not affect
any [**]by Digimarc pursuant to clauses 2.8, 2.9, 8.4, 8.6, 8.17 or 8.19 above.

 

15.7                           On termination
of this Agreement by Digimarc or [**] for any reason, Digimarc shall within
fifteen (15) Business Days deliver to the Escrow Agent all Work in progress
done up to the effective date of termination, including all Technical
Information relating to such Work, and all Technical Information pertaining to
the Digimarc Technology or the Project Technology which has not previously been
deposited with the Escrow Agent and issue to the DLA Contract Authority a
certificate signed by an officer of Digimarc that it has fully complied with
this obligation.  Digimarc shall be
entitled to charge [**] for its reasonable costs in providing such assistance
calculated in accordance with the Allowable Costs.

 

18.                               NOTICES

 

Clause 18.2 shall be replaced as follows:

 

18.2                           Any notice to Digimarc shall be sent to
both of, and any notice from Digimarc shall be sent by either:

 

	
  Mr. Scott Carr

  	
  or

  	
   

  	
  Mr. William Y. Conwell

  
	
  Vice President and General Manager,

  	
   

  	
   

  
	
  [**]

  	
   

  	
  Vice President, Intellectual Property

  
	
  Digimarc Corporation

  	
   

  	
  Digimarc Corporation

  
	
  19801 SW 72nd Avenue

  	
   

  	
  19801 SW 72nd
  Avenue

  
	
  Suite 100

  	
   

  	
  Suite 100

  
	
  Tualatin, Oregon 97062 USA

  	
   

  	
  Tualatin, Oregon 97062 USA

  
	
  FAX: (503) 885-9880

  	
   

  	
  FAX: (503) 885-9880

  

 

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

 

 

19.                               MISCELLANEOUS PROVISIONS

 

Clause 19.15 shall be replaced as follows:

 

19.15   Survival.       All
clauses of this Agreement which expressly or by implication are intended to
survive the termination of this Agreement will do so and, for greater certainty
and notwithstanding any provision in this Agreement to the contrary, the
provisions set out in clauses 2.5, 3.6-3.10 inclusive, 3.12-3.18 inclusive,
3.20, 3.21, 8.4, 8.5, 8.6, 8.8, 8.11-8.20 inclusive, 9.1, 9.2, 9.3, 9.7, 10,
11, 12, 13, 14, 16, 18 and 19 of this Agreement shall survive termination of
this Agreement by either party for any reason.

 

IN WITNESS WHEREOF,
this Third Amendment has been executed and delivered by the parties hereto as
of the date of the last signature below.

 

	
  [**]

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Signature

  	
  Signature

  
	
  Name:

  	
  Name:

  
	
  Title:

  	
  Title:

  
	
  Date

  	
  Date

  
	
   

  	
   

  
	
  DIGIMARC CORPORATION

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Signature 

  	
   

  
	
  Name:

  	
  Paul Gifford 

  	
   

  
	
  Title:

  	
  President

  	
   

  
	
  Date

  	
   

  	
   

  
				

 

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

 

 

AMENDMENT
NUMBER FOUR TO THE [**] DEVELOPMENT AND LICENSE AGREEMENT

 

This is the fourth Amendment to the [**] Development
and License Agreement (the “Fourth Amendment”) made by and between

 

DIGIMARC
CORPORATION, a corporation incorporated under the laws
of Delaware and having its head office at 9405 SW Gemini Drive, Beaverton,
Oregon, U.S.A.  97008 (“Digimarc”)

 

and

 

[**]

 

Recitals

 

Effective 1 January [**],
the above-identified parties entered into an agreement entitled the “[**]
Development and License Agreement” (hereinafter, “the Agreement”).

 

On 14 March [**], 28 December [**]
and 1 January [**], the parties entered into Amendments to the Agreement
(hereinafter, First, Second and Third Amendments).

 

In consideration of the
promises and covenants set out in this Fourth Amendment, in the Agreement, in
the First, Second and Third Amendments and other good and valuable
consideration, the receipt and adequacy of which are acknowledged by each of
the parties, the parties agree that the Agreement as previously amended will be
further amended with effect from 1 January [**], with the exception of
Schedule W, effective from 1 January [**]:

 

1.                                      DEFINITIONS AND PRINCIPLES OF INTERPRETATION

 

The following definitions
in clause 1.1 shall be deleted and replaced as follows:

 

“[**]
Technology” means that
technology, if any, from the technology described in Schedule “F” in respect of
which from time to time during Phases [**] of this Agreement and Phases [**] as
defined in the [**] Agreement after discussion between the [**]
Project Director and the Digimarc
Project Director, [**] offers,
and Digimarc accepts in writing, a [**] on the [**] in clause 8.2 [**] and all
Intellectual Property Rights in that [**];

 

“Digimarc
Contract Authority” means Digimarc’s President
or the President, Digimarc Watermarking Solutions;

 

“Improvement” means any change in the [**] Technology or the
Technical Information made by or at the direction of Digimarc after [**] which
enhances, whether by improvement, enhancement, correction, addition or
otherwise, the properties, 

 

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characteristics
or [**] of the [**] including, for greater certainty, the [**] and the [**],
and any change to the [**] the [**] Technology, the [**] Technology and/or the
[**] made by or at the direction of Digimarc or any [**] in connection with the
[**] of the [**] by any [**] that Digimarc has rights in, including
customization, improvements, enhancements, corrections, and changes to the [**]
so that it can interface properly to a [**];

 

“Phase” means Phase [**] of this Agreement as the case
requires, adjusted if required by any period added pursuant to clause 5.3 or
other changes to the Services authorized pursuant to clause 6 below;

 

“Security
Purpose” means the purpose of [**]; and

 

“Statement of Work”
means the Statement of Work set out in Schedules B, C, D, V or W as applicable,
or the Statements of Work developed for Phases [**] in accordance with the
Planning Process set forth in Section 2.

 

The following terms in
clause 1.1 shall be renamed and redefined as follows:

 

Delete “Digimarc
Project Manager” and replace with “Digimarc
Project  Director” means
the project director appointed by the Digimarc Contract Authority in accordance
with clause 4.2.;

 

Delete “DLA
Contract Authority” and replace with “[**]
Contract Authority” means the Contract
Authority designated by [**] in writing to Digimarc from time to time;

 

Delete “DLA Project
Manager” and replace with “[**]  Project Director” means the project director appointed by
the [**] Contract Authority from time to time on notice to the Digimarc
Contract Authority who shall also serve as the person primarily responsible to
conduct inspections on behalf of[**];

 

Delete “Project
Manager” and replace with “Project Director”
means either the [**] or Digimarc Project Director, as the context requires;

 

Delete “[**]”
and replace with “[**]” means a committee of
representatives from various [**]called “[**]”, previously known as “[**]”; and

 

Delete “Work”
and replace with “Services” means the services
required to be performed by Digimarc as authorized by [**] in the Planning
Process set out in Section 2. 
Digimarc shall provide all development, maintenance and [**] services
related to the [**], including (a) acting as[**]; (b) any tasks
required to be performed to complete and deliver the [**](c) any task to
be performed by Digimarc for and any item to be delivered by Digimarc to [**]as
such tasks and items are identified in the [**] Plan for that[**]; and (d) other
services reasonably necessary to comply with its obligations under this
Agreement.

 

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

 

 

Add new definitions to
clause 1.1 as follows:

 

“[**]means
the [**]established by the [**] Contract Authority and that is responsible for
the oversight of the overall relationship between [**] and Digimarc and for the
key day-to-day contract management;

 

[**]

 

“Dependancy”
means any of the following dependencies of Digimarc on [**]and such [**]
employees, agents, representatives and subcontractors:

 

(a)                                  performing
a task upon which Digimarc’s performance of any part of the Services is
dependent;

(b)                                 timely
providing to Digimarc the relevant technical information,[**];

(c)                                  timely
returning/negotiating [**], documents of understanding as necessary to protect
Digimarc or [**] intellectual property;

(d)                                 having
attendance of the relevant [**]employees or consultants at key briefings and
review meetings;

(e)                                  maintaining/not
materially changing planned [**];

(f)                                    not
materially altering their [**]; or

(g)                                 such
dependencies as are expressly identified in the [**]may be revised;

 

“[**]  Agreement”
means that [**] Agreement effective as of 1 January [**] between [**] and
Digimarc;

 

“[**]  Personnel” means any officer, employee, permitted agent or
subcontractor assigned by Digimarc to perform any part of the Services required
under a [**];

 

“[**]

 

“[**]  Problem Report” means a report of a [**] problem addressing
as many of the topics specified in Schedule “BB” as are relevant to a
reasonable understanding of the problem;

 

“Key [**]  Personnel” means those [**] Personnel identified in Schedule
AA;

 

“Phase[**]”
means the period from 1 January [**] to 31 December [**];

 

“Phase[**]”
means the period from 1 January [**] to 31 December [**];

 

“Phase[**]” means
the period from 1 January [**] to 31 December [**];

 

“Planning Process”
means the process set forth in Section 2 of this Agreement by which [**]
and Digimarc will develop Program Work Plans, Statements of Work for Phases
[**] and [**] Plans;

 

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

 

 

“[**]”
means the[**]; and

 

“Program Work Plan”
means a two-year plan developed pursuant to Section 2.26 with an estimated
budget for each of the two years, approved tasks for the first year and
anticipated tasks for the second year.

 

Section 1.2                                   Interpretation

 

Clause 1.2.5 shall be
replaced with:

 

1.2.5.       unless otherwise specified, the order of
precedence for interpreting this Agreement shall be:

 

a)             the Amendments to the
Agreement with the Fourth Amendment supplementing the Third Amendment and the
Third Amendment supplementing the Second Amendment and the Second Amendment
supplementing the First Amendment;

 

b)            the other terms of this
Agreement, excluding Schedules;

 

c)             the Schedules excluding the
[**] Plans;

 

d)            as between the delivery
schedules forming part of a Statement of Work, and other provisions of such
Statement of Work, the delivery schedules shall take precedence;

 

e)             the [**] Plans except that
as between the delivery schedules, if any, forming part of a [**] Plan and
other provisions of such plan, the delivery schedules shall take precedence.

 

Replace clause 1.2.9 as
follows:

 

(a)  When a definition or clause in this
Agreement is described in the Fourth Amendment as a replacement, the definition
or clause in this Fourth Amendment replaces the previous definition or clause
in the Agreement.  When a new definition
or clause is presented in this Fourth Amendment, the new definition or clause
is considered added to and incorporated into the Agreement.

 

(b)  The changes in
this Fourth Amendment are referenced by the clauses as they appear in the
Agreement and such changes shall not apply to the interpretation of any part of
the Agreement relating to any events, acts or omissions occurring prior to 1 January [**]
unless such events, acts or omissions are relevant to any event, act or
omission occurring on and after that date. 
Unless expressly modified, superseded or replaced by this Fourth
Amendment, each term of the Agreement as 

 

** CONFIDENTIAL
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COMMISSION.

 

 

amended by the First, Second
or Third Amendment remains in full force and effect.

 

1.3                               Applicable Law

 

Clause 1.3 shall be replaced
as follows:

 

1.3                                 This
Agreement and all amendments thereto shall be construed in accordance with the
laws of England to the exclusion of its rules of conflicts of laws.

 

1.4                               Schedules

 

In clause 1.4,

 

Replace Schedules G, H, I,
K-1, K-2, L-1, L-2, N, S and W, as attached; and

 

Add the following new
schedules:

Schedule Y, described as
[**] Plan;

Schedule Z, described as
[**] Team;

Schedule AA, described as
[**] Personnel;

Schedule BB, described as
[**] Problem Report; and

Schedule CC, described as
Project Indicators.

 

The parties agree that the
above-identified replacement document Schedules G, H, I, K-1, K-2, L-1, L-2, N,
S and W supersede the corresponding documents referenced in clause 1.4 of the
Agreement and such replacement Schedules together with the new Schedules Y, Z,
AA, BB and CC are, by this reference, made an integral part of the Agreement.

 

2.                                      SCOPE AND DURATION OF THE SERVICES

 

Clause
2.15 shall be replaced as follows:

 

2.15                           Digimarc shall obtain at its own expense all
licenses or permits required to be obtained from the Government of the United
States in order for Digimarc to comply with its obligations under this
Agreement.  [**], [**]

 

Add
new clauses to clause 2 as follows:

 

2.26                           [**]
and Digimarc have agreed that Digimarc
shall provide the Services for Phases [**] as stated in the Statements of Work and [**] Plans developed in accordance with the
Planning Process set forth herein.  The
[**]and Digimarc shall hold planning meetings in each June and December during
the then-current phase to review the scope and status of current and planned
projects under the Statement of Work and the current 

 

** CONFIDENTIAL
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COMMISSION.

 

 

and
proposed [**] Plans,
relative to the timing schedule and expenditures and budgets and to establish
the Statement of Work and revised or new [**] Plans for subsequent periods. 
Prior to these meetings, the [**]and Digimarc shall exchange such
information as is reasonably necessary to enable the parties to conduct an
informed evaluation.  In addition, the
[**]and Digimarc shall meet approximately two months in advance of each
planning meeting to discuss [**] and similar issues related to the
development,[**].  At this preparation
meeting the parties shall also discuss the project indicators, in accordance
with the process set out in Schedule CC. 
The Statement of Work and revised or new [**] Plans for the next calendar year shall be
finalized at the June meeting, except that the Statement of Work and [**]
Plans for [**] and the [**]for [**] shall be finalized by May 12,
[**].  The [**]and tentative Statement of
Work and [**] Plans for the year
following the next year shall be set at the December meeting.  Services may be added and/or priorities
changed, and resources and priorities may be shifted between tasks following a
process to be agreed to between the [**]and Digimarc.  Digimarc shall not exceed the [**]for a given
calendar year without the written approval of the[**].  At each planning meeting, the planned tasks and
associated estimated budget shall be set for an additional six months to create
an updated Program Work Plan.  The
[**]and Digimarc shall present the agreed-upon Statement of Work and revised or
new [**] Plans to the [**]for
approval.  The [**] Contract Authority shall notify Digimarc in
writing of the [**] approval of the Statement of Work and revised or new [**]
Plans.

 

2.27                           The parties shall, unless otherwise agreed, prepare
a specific [**] plan
for a [**]following the [**]of Schedule Y. 
Digimarc undertakes and represents that each [**] Plan and every revision thereto prepared by
Digimarc shall be prepared with all due care and diligence and that as of the
date of the applicable June or December planning meeting, Digimarc
shall not be aware of any matters within its reasonable control which might or
will adversely affect its ability to perform the Services described in that [**]
Plan or revised [**] Plan and other existing approved [**] Plans.

 

2.28                           In the event that the [**]and Digimarc are unable to
mutually agree on the pricing of a given task(s) proposed in a Statement
of Work or [**] Plan,
the matter will be escalated as follows: 
(1) to the [**] Project
Director and the President of Digimarc Watermarking Solutions, (2) to the
[**]and the President of Digimarc Corporation, and (3) ultimately to an
agreed upon third party expert who is qualified by education and training to
pass upon the particular matter to be decided. 
The dispute resolution process provided for in this clause 2.28 is
non-binding.  If the parties do not
accept the expert’s decision, either party may initiate the arbitration process
in accordance with Clause 14.

 

2.29  Phase [**] shall commence on 1 January [**] unless [**] notifies Digimarc in writing on or before 31 December [**] that it
is not exercising its option for Phase [**] or unless Phase [**] is terminated prior to 31 December [**].
 Assuming that [**] exercises its option
for Phase [**] Phase [**] shall commence on 1 January [**] unless [**]
notifies Digimarc in writing on or before 31 December [**] that it is not
exercising its option for Phase [**] or unless Phase [**] is terminated prior
to 31 December[**].

 

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

 

 

2.30  [**] may terminate for convenience without
cause the Services being performed in any of Phases [**] if and only if [**] determines to cease
development and[**].  Termination shall
be effective on the last day of the calendar year in which [**] gives written notice of such termination to
Digimarc, provided that Digimarc receives that notice on or before June 30
of that year.

 

2.31  In the event of a termination for convenience
without cause, [**] shall
pay Digimarc all of its actual and reasonable termination costs, including
third party contract termination costs, employee re-deployment or termination
costs, undepreciated capital costs of assets purchased exclusively for the
project, and accounting, legal and travel costs associated with termination and
termination negotiation (“Termination Costs”). 
Actual and reasonable termination costs shall be capped [**].  Digimarc shall use commercially reasonable
efforts to mitigate all Termination Costs. 
[**] shall also pay
Digimarc an amount equal to[**].  [**] exercises its termination for
convenience without cause option during the last year of a phase, the “remaining
years” of that phase will mean the number of years in the follow-on phase.

 

2.32.                        Digimarc agrees to make Key [**]
Personnel and/or other suitably skilled
and experienced personnel available as mutually agreed between [**] and Digimarc to provide assistance as part of
any termination transition plan that is agreed to three months prior to the
date of termination of Services. 
Alternatively, at the request of the[**] Project Director, Digimarc agrees for a period of up to six months after
termination of Services for any reason except for breach by [**] under clause 15.3 to make Key [**] Personnel and/or other suitably skilled and
experienced personnel, at Digimarc’s reasonable discretion and acceptable to
[**]available to render to [**]or any third party designated by[**], all
reasonable assistance. [**] agrees
to pay for such assistance provided prior to the termination date at the
then-current DLA Labor Rates and for such assistance provided after the
termination date at the then-current labor rates charged to Digimarc
Watermarking Solutions’s most favored customers, excluding the [**] and inter-company transfers, and for Expenses
as allowed in accordance with the Allowable Costs.

 

2.33                           The Term will continue notwithstanding that [**]
may elect not to exercise its option
for Phase [**] or Phase [**] or
that it may terminate for convenience without cause the Services being provided
by Digimarc under Phases [**]

 

2.34                           This Fourth Amendment is conditional upon execution
of an Amendment to the [**]between the [**] and the requisite[**].  After execution of this Fourth Amendment by
the [**] and Digimarc, the [**]
shall proceed with reasonable diligence
to have the Amendment to the [**]fully executed.  When the Amendment to the [**] is fully
executed, the [**] shall so
notify Digimarc that the condition of this clause 2.34 has been removed from
this Fourth Amendment.

 

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

 

 

3.                                      PRICE AND PAYMENT

 

Replace
clause 3.7 as follows:

 

3.7                                 For a period commencing on the Effective Date and
ending on the date [**] following the last date on which Digimarc issues an
invoice to [**] for
Allowable Costs, Digimarc shall maintain proper, up-to-date, accurate and complete
books, records and other documentation substantiating the Allowable Costs
invoiced under this Agreement including time sheets showing the hours spent on
each task which forms part of the Services and receipts for all Expenses (as
defined in Schedule I).  Digimarc shall
produce such books, records and documentation to [**] or its representatives for inspection and
copying at Digimarc’s premises (with the right to take such copies from
Digimarc’s premises as long as Digimarc is notified in writing what copies are
removed from Digimarc’s premises and the copies are handled by [**] or its representative in accordance with [**]
confidentiality obligations under clause 12) at all reasonable times on request
by [**] Project Director.

 

Add
new clauses to clause 3 as follows:

 

3.22                           Subject to the limits set out in this Agreement and
unless otherwise expressly set out herein, [**] shall reimburse Digimarc for all the
Allowable Costs reasonably and properly incurred by Digimarc during each
calendar month to perform the Phase [**] Services, Phase [**] Services
(if any), Phase [**] Services
(if any) and other Services authorized by [**] in writing.  Digimarc shall invoice
[**] monthly in arrears for such
Allowable Costs.  Each invoice shall
specify the Expenses incurred and the time spent by the staff and
sub-contractors of Digimarc in performing the Services, including time spent by
[**] Personnel, and shall give a
breakdown of the Allowable Costs, including a breakdown in respect of each [**]
Plan, in the form attached as Schedule
S.

 

3.23                           If [**] terminates this Agreement in accordance with Clause 15, Digimarc shall be
reimbursed for all Services performed through the date of termination and for
any transition services provided after the date of termination in accordance
with Clause 2.32.  For greater certainty,
[**]obligation to pay the [**]for a given year (as determined in accordance
with the Planning Process) is subject to Digimarc having performed all of its
obligations under this Agreement relating to the performance of Services.

 

4.                                      PROJECT MANAGEMENT

 

Replace
Section 4 as follows:

 

4.1                                 The [**] Project Director shall be responsible for coordinating fulfillment by [**]
of its obligations under this Agreement
including the provision of all the general information about [**] that Digimarc
may reasonably require in order to perform its obligations under this Agreement
and directing Digimarc in respect of prioritizing effort and timing of Services
in relation to any [**]in accordance with the agreed upon [**] Plans and changes thereto.  The [**] Project Director shall have no authority to amend this Agreement, approve
payments or approve or accept Deliverables or other Services or 

 

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

 

 

proposals
on behalf of [**], all
of which action shall be within the exclusive authority of [**].

 

4.2                                 Digimarc shall designate a responsible individual
with adequate authority and competence as the Digimarc Project Director.  The Digimarc Project Director shall be
responsible for coordinating the performance of the Services by Digimarc
including serving as project leader and primary interface with [**]
but shall have no authority to agree to
an amendment of this Agreement on behalf of Digimarc which action shall be
within the exclusive authority of the Digimarc Contract Authority.

 

4.3                                 Either party’s Project Director or Contract
Authority may from time to time appoint one or more persons to represent him or
her on prior written notice to the other party’s Project Director or Contract
Authority.

 

4.4                                 Digimarc shall maintain throughout Phases [**] (unless [**] terminates for convenience without cause the Services being performed by
Digimarc or elects not to exercise its option for Phases[**]) the [**] Team as defined in Schedule Z comprising the
Key [**] Personnel and other
persons who have the qualifications, expertise and experience reasonably
necessary to perform the tasks and roles of the members of the [**] Team
specified in Schedule Z.

 

4.5                                 Digimarc acknowledges that it is important to [**]
that [**] has the flexibility, at the discretion of
[**]to maximize the use of the combined resource pool of personnel allocated by
Digimarc to development and [**] Services.  Accordingly, as directed by the [**] Project Director in accordance with the
procedures set out in clause 6, Digimarc shall: (a) increase the number of
[**] Personnel assigned by
Digimarc to perform the Services beyond the number of the [**] Team or to
subsequently reduce the [**] Personnel
back to the level of the [**] Team; and/or (b) assign those [**] Personnel who have the necessary skills to
development Services or vice versa.

 

4.6                                 The names of the Key [**] Personnel approved by the [**] Contract Authority are set out in Schedule
AA.  If it becomes necessary for Digimarc
to provide substitute or add Key [**] Personnel for any reason, the [**] Contract Authority must approve such Key [**] Personnel in advance, which approval shall
not be unreasonably withheld.

 

4.7                                 Digimarc shall not, without first obtaining the
written consent of the [**] Contract Authority, which consent shall not be unreasonably withheld,
remove or replace:

 

(a)                                  any employee of Digimarc or its authorized subcontractors assigned to do
any part of the Services if the employee or subcontractor is critical to
completion of the Services by Digimarc in accordance with this Agreement or the
applicable [**] Plan.  “Critical” means that the applicable Services
cannot be completed by Digimarc without such person; or

 

(b)                                 its Project Director.

 

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

 

 

4.8                                 Digimarc shall replace within a reasonable time
under the circumstances any of its employees or authorized subcontractors
engaged in fulfilling its obligations under this Agreement, including its
Project Director, whose removal is required by the[**] Contract Authority, provided that the [**]
Contract Authority specifies reasonable
cause for such removal in writing.  With
respect to [**] Personnel,
Digimarc shall, at Digimarc’s cost, train the replacement personnel about the
job specifics so the replacement personnel shall be able to perform the
Services in a manner substantially equal to the replaced [**] Personnel at the particular state the
Services had reached when the personnel change occurred.

 

4.9                                 Digimarc undertakes that all personnel assigned to
do the Services shall be employees of Digimarc unless it provides reasonable
prior written notice of its intent to use a specific subcontractor.  The [**] Project Director shall have the right to
approve all subcontractors, which approval shall not be unreasonably
withheld.  Digimarc undertakes that it
shall obtain from each subcontractor prior to permitting that subcontractor to
do any part of the Services a written undertaking that all Intellectual
Property Rights in any work developed by that subcontractor while providing the
Services shall vest absolutely in Digimarc upon the date of creation.  Digimarc shall remain responsible for any
obligations which are performed by a subcontractor and for the conduct of
subcontractors as if they were the acts or omissions of Digimarc.

 

4.10                           Digimarc shall report on progress of the Services
and conduct progress reviews in accordance with the provisions of Schedule “N”.

 

4.11                           In the event that it becomes evident to either party’s
Project Director that a failure or delay by either party to perform in
accordance with its obligations under this Agreement will result in a material
impact on the completion of the Services in accordance with the applicable
Statement of Work or [**] Plan, then the relevant Project Director shall immediately bring the
issue to the attention of the other party’s Project Director.

 

5.                                      RESPONSIBILITIES OF [**]

 

Clauses
5.1 and 5.3 shall be replaced as follows:

 

5.1                                 [**] shall perform all tasks assigned to it in a Statement of Work or an
applicable [**] Plan by the
dates set out therein (herein referred to as the [**] Tasks), provided that if the [**] Task is required in relation to a [**] Plan, Digimarc has provided the [**] Contract Authority with reasonable
notice that there is a Digimarc action that is dependent on that [**] Task.

 

5.3                                 If [**] is delayed in complying with any of its obligations under clauses 5.1 or
5.2 for any reason not attributable to Digimarc, and such delay will cause a
delay in the completion and delivery by Digimarc of any Services, then Digimarc
shall reasonably 

 

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

 

 

promptly
advise the [**] Project
Director of the impact of the delay.  The
time for completion of the Services and all subsequent Services dependent
thereon, shall then be extended automatically by one day for each day of delay
by [**] or such other period as
may be agreed in writing between the parties’ respective Contract
Authorities.   If Digimarc suffers
increased costs by reason of such delay, other than a delay due to a force
majeure event (as defined in clause 17.1), such costs reasonably and
necessarily incurred by Digimarc shall be borne by [**].  Digimarc shall make every
reasonable effort to reassign staff and otherwise to mitigate the increased
costs associated with such a delay.  If
the delay is due to a force majeure event, such costs shall be borne equally by
[**] and Digimarc.  If there are any additional costs to be borne
by [**] otherwise than as agreed
under clause 2 of this Agreement, Digimarc shall reasonably promptly notify the
[**] Contract Authority of such
and [**] shall either approve of
such costs and/or request a change to the Services under clause 6.  Such a change request will ask Digimarc to
describe the effect the costs and delay under this clause 5.3 will have on the
applicable [**] Plans or
Statements of Work.  If after Digimarc
describes the effect the costs and delay under this clause 5.3 will have on the
applicable [**] Plans or
Statements of Work, the [**] Contract
Authority requests such a change, Digimarc shall implement such change in [**] Plans and Statements of Work so that
Digimarc remains within the previously approved budget.  This clause 5.3 sets forth Digimarc’s only
remedy for a delay by [**] in
complying with any such obligation.

 

6.                                      CHANGES TO THE SERVICES

 

Clause
6.1 shall be replaced as follows:

 

6.1                                 [**]
or Digimarc may request a change to the
Statements of Work or the [**] Plans
from time to time by submitting a request in writing to the other party’s
Project Director.  Such changes directed
by [**] may include allocating
personnel other than the Project Director to provide development and/or [**] Services in accordance with clause
4.5.  Any such request will indicate the
nature of the new work to be performed, and indicate the desired number and
optimum skill set of the personnel to be redirected, in a form sufficient for
Digimarc to investigate the effect of the change.

 

7.                                      PERFORMANCE OF SERVICES

 

Add
new clauses to clause 7 as follows:

 

7.3                                 If any part of the [**] Services have not been performed in
accordance with this Agreement and Digimarc receives a [**] Problem Report from the[**] Project Director, Digimarc shall at its own
cost and expense, without charge to [**]and in the fastest time reasonably
practicable, but no later than sixty (60) days after receipt of a [**] Problem Report from the[**] Project Director, ensure, by taking all steps
reasonably necessary, that the relevant part of the Services is re-performed or
corrected in compliance with this Agreement.

 

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

 

 

7.4                                 Digimarc shall not be responsible to the extent any
failure by Digimarc to perform the Services in accordance with this Agreement
is directly attributable to: a) a delay by [**] to perform any [**] Task (as defined in clause 5.1) applicable to
the affected part of the Services; b) a Dependancy applicable to the affected
part of the Services not being fulfilled by [**]; or c) a force majeure event
(as defined in clause 17.1).

 

8.                                      INTELLECTUAL PROPERTY MATTERS

 

The following provision shall be added at the end of
clause 8.6:

 

In the event that this
Agreement is terminated by [**] under clauses 15.2 or 15.3, [**]in this Section 8.6
shall take effect on the date on which [**] pays Digimarc [**]and agrees to pay
Digimarc an additional [**]by January 31 of the following year.  In the event [**] fails to pay [**]by January 31
of the following year, the [**]shall become void ab initio.  Interest shall accrue on the outstanding
amount from the date the [**] is effective to and including the day the balance
is paid in full [**].

 

Clauses 8.17, 8.18, 8.19 and 8.20 shall be replaced
as follows:

 

8.17                           Digimarc
hereby confirms and agrees that a) [**]to [**] by clause 8.4 applies, effective
upon the date specified in clause 8.18, to Digimarc Technology and the Project
Technology and all Improvements, and the Technical Information pertaining to
the Digimarc Technology, the Project Technology and such Improvements, created
between January 1, [**] and December 31, [**] and to Digimarc Technology
and the Project Technology and all Improvements, and the Technical Information
pertaining to the Digimarc Technology, the Project Technology and such
Improvements, created on an on-going basis under any subsequent Statement of
Work or [**] Plan approved under clause 2.26; and b) the expressions[**] as
used in clause 8.4, shall be deemed to include[**].

 

8.18                           The
[**]in clause 8.17 shall take effect in respect of each specific item of
Digimarc Technology, Project Technology or Improvements, or Technical
Information pertaining to the Digimarc Technology, the Project Technology or
such Improvements created as set out in clause 8.17 on the earliest of:

 

a)                                      the
date on which both [**]to in clause 8.4 takes effect and [**] pays Digimarc all
sums properly due to Digimarc under this Agreement for the development of that
specific item;

 

b)                                     sixty
(60) days following the effective date of termination of this Agreement by [**]
in accordance with the provisions of clause 15.2(a), (b), (d) or (e) unless
Digimarc demonstrates within such sixty (60) day period that, notwithstanding
the occurrence of the events giving rise to the termination, Digimarc is
willing and able to comply with its obligations under the Agreement; or

 

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

 

 

c)                                      the
effective date of termination of this Agreement by [**] in accordance with the
provisions of clauses 15.2(c), 15.2(f), 15.2(g) or 15.3 or of termination
for convenience without cause of Services under clause 2.30.

 

8.19                           Digimarc
hereby confirms and agrees that any [**]to [**] pursuant to clause 8.6 applies,
without any additional payments over and above that in clauses 8.6 and 8.18, to
Digimarc Technology and the Project Technology and all Improvements, and the
Technical Information pertaining to the Digimarc Technology, the Project
Technology and such Improvements created between January 1, [**] and December 31,
[**] and to Digimarc Technology and the Project Technology and all
Improvements, and the Technical Information pertaining to the Digimarc
Technology, the Project Technology and such Improvements created on an on-going
basis under any subsequent Statement of Work or [**] Plan approved under clause
2.26.  The [**]by this clause 8.19 is effective
when [**] under clauses 8.6 and 8.17 take effect.

 

8.20                           Notwithstanding
any other provision of this Agreement to the contrary, [**]right to [**]in
clause 8.17 by payments as described in clause 8.18(a) shall survive
termination of this Agreement by [**] in accordance with the provisions of
clauses 15.2 (a), (b), (d) or (e) or termination for convenience
without cause of Services under clause 2.30 and be exercisable at any time
during a period of sixty (60) days following such termination.

 

Add new clauses to clause 8 as follows:

 

8.21                           Digimarc hereby [**], with effect from 1 January [**]
the [**] the Digimarc Technology and the Project Technology, and all
Improvements, and the Technical Information pertaining to the Digimarc
Technology, the Project Technology and such Improvements, and [**]the Digimarc
Technology and the Project Technology and such Improvements and Technical
Information pertaining to the Digimarc Technology, the Project Technology and
such Improvements to other Persons for the purposes of[**], the [**] and any
such component thereof, and making the [**]and any component available to
others solely for[**].  [**],
including[**].  For greater certainty,
the uses permitted by this grant are limited to[**]  This grant does not permit any other
uses,[**]  The expressions[**] as used in
this clause 8.21 shall be deemed to refer to[**].   The [**]by clause 8.21 applies to Digimarc
Technology and the Project Technology and all Improvements, and the Technical
Information pertaining to the Digimarc Technology, the Project Technology and
such Improvements existing on or before December 31, [**], and to Digimarc
Technology and the Project Technology and all Improvements, and the Technical
Information pertaining to the Digimarc Technology, the Project Technology and
such Improvements created on an on-going basis under any subsequent Statement
of Work or [**] Plan approved under clause 2.26.   This [**] is in addition to those rights
granted in Sections 8.4, 8.6, 8.17 and 8.19 of this Agreement.

 

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

 

 

8.22                           Digimarc grants to [**], effective on the
date specified in this clause, the [**] the Digimarc Technology and the Project
Technology and all Improvements, and the Technical Information pertaining to
the Digimarc Technology, the Project Technology and such Improvements, and
[**]the Digimarc Technology, the Project Technology and such Improvements and
Technical Information to other Persons, for the sole purpose of [**]solely for
[**].  This grant is subject to the
limitations set forth in Clause 8.21. 
This [**] shall take effect on written request by the [**] Contract
Authority at any time following the later of the date on which the [**]to in
8.21 takes effect and the date on which [**] pays Digimarc the amount as set
forth below:

 

(a)                                  if [**] desires to [**]during the period
covered by Phase [**], [**] shall pay an amount to be negotiated by [**] and
Digimarc, in addition to the amount to be paid under clause 8.6;

(b)                                 if [**] desires to [**]during the period
covered by Phases [**] shall only pay to Digimarc [**]as set out in clause 8.6;
or

(c)                                  if [**] desires to [**] at any time after
the refusal to perform or other material breach of the Agreement by Digimarc,
[**] shall [**] at no cost.

 

The [**] clause
8.22 applies to Digimarc Technology and the Project Technology and all
Improvements, and the Technical Information pertaining to the Digimarc
Technology, the Project Technology and such Improvements existing on or before December 31,
[**], and to Digimarc Technology and the Project Technology and all
Improvements, and the Technical Information pertaining to the Digimarc
Technology, the Project Technology and such Improvements created on an on-going
basis under any subsequent Statement of Work or [**] Plan approved under clause
2.26.

 

8.23                           [**] hereby grants Digimarc during the
term of this Agreement a [**] may have or acquire under clauses 8.4, 8.6, 8.17,
8.19, 8.21 and 8.22 of the Agreement. 
This [**]to Digimarc is retroactive to any previously [**]rights from
Digimarc to [**] may have or may acquire under clauses 8.4, 8.6, 8.17 and 8.19
of the Agreement.

 

10.                               REPRESENTATIONS AND WARRANTIES OF DIGIMARC

 

Add
new subclauses to clause 10.1 as follows:

 

(h)                                 it possesses the necessary skills, knowledge and experience to perform
all [**] Services
under this Agreement and such [**] Services shall be performed at all times in a timely, cost effective,
professional and diligent manner by Digimarc exercising due professional care,
skill and competence.  For greater
certainty Digimarc shall, and shall ensure that the [**] Personnel shall, employ the standard of care
in performing the [**] Services
that would be expected of a competent and experienced provider of the same or
similar type of [**] Services;
and

 

(i)                                     Digimarc shall ensure that the [**] Personnel are appropriately qualified,
skilled, trained and experienced to undertake the [**] Services and tasks assigned to them, and that
each of the [**] Personnel shall
possess the qualifications and experience which Digimarc has represented them
to possess.

 

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

 

 

11.                               REPRESENTATIONS AND WARRANTIES OF [**]

 

Sub-clause (d) of clause
11.1 shall be replaced as follows:

 

from and after the date
on which [**] gets access to the Escrowed Materials (the “Release Date”) as
provided by clauses 8.4, 8.6, 8.17, 8.19, 8.21 and 8.22 above until the last
day of the Term, every [**] which [**]will be capable of [**]

 

12.                               CONFIDENTIALITY

 

Clause 12.9 shall be
replaced as follows:

 

[**] shall not
reverse-engineer, disassemble, or decompile any Digimarc software forming part
of the[**], [**](except to the extent that any such activity is reasonably
necessary to permit [**] to exercise its [**] clauses 8.4, 8.6, 8.17, 8.19,
8.21 and 8.22 of this Agreement or [**] right to do so may not be contractually
restricted under applicable law), and shall contractually assure that any other
Person to whom [**] provides [**]shall be similarly obliged.

 

Clause 12.11 shall be
replaced as follows:

 

12.11                     General
attributes of [**] may be disclosed in connection with [**]of the [**] to[**],
and [**]; information relating to the [**] may be [**] of [**]subject to a nondisclosure
agreement on terms requiring at least [**]years of confidentiality from the
date of disclosure of such Confidential Information, but that are in all other
respects materially similar to the provisions of this clause 12, but in all
such cases Digimarc may disclose information relating to [**]but to no
others.  The existence and terms of this
Agreement may be disclosed to the parties’ professional advisors, to members of
the [**]and to Digimarc’s shareholders, institutional and corporate investors,
and commercial and investment bankers, who have a reasonable need to know such
information subject to a non-disclosure agreement, or as required by applicable
law or regulations.

 

15.                               TERM
AND TERMINATION

 

Clause 15.6 shall be
replaced as follows:

 

15.6                           Termination
of this Agreement by [**] for any reason in accordance with the provisions of
this clause 15 or termination for convenience without cause of Services under
clause 2.30 shall not affect any [**]by Digimarc pursuant to clauses 2.8, 2.9,
8.4, 8.6, 8.17, 8.19, 8.21 or 8.22 above.

 

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

 

 

18.                               NOTICES

 

Clause 18.2 shall be
replaced as follows:

 

18.2                           Any notice to Digimarc shall be sent to
both of, and any notice from Digimarc shall be sent by either:

 

	
  Mr. J. Scott Carr

  	
  Mr. Robert Chamness

  
	
  President, Digimarc Watermarking

  	
  Vice President and General Counsel

  
	
  Solutions

  	
  Digimarc Corporation

  
	
  9405 SW Gemini Drive

  	
  9405 SW Gemini Drive

  
	
  Beaverton, Oregon 97008 USA

  	
  Beaverton, Oregon 97008 USA

  
	
  FAX: (503) 469-4777

  	
  FAX: (503) 469-4777

  
	
   

  	
   

  
	
  With a copy to:

  	
   

  
	
   

  	
   

  
	
  Digimarc Project Director

  	
   

  
	
  Digimarc Corporation

  	
   

  
	
  9405 SW Gemini Drive

  	
   

  
	
  Beaverton, Oregon 97008 USA

  	
   

  
	
  FAX: (503) 469-4777

  	
   

  

 

Clause 18.3 shall be
replaced as follows:

 

18.3                           Any
notice to [**] shall be sent to both of, and any notice from [**] shall be sent
by either:

 

[**]

 

With a copy to:

 

[**]

 

Clause 18.4 shall be
replaced as follows:

 

18.4                           A
party may change its addressee(s) or address(es) for notice by notice to
the other party in accordance with the provisions of this clause 18.

 

19.                               MISCELLANEOUS PROVISIONS

 

Clause 19.12 shall be
replaced as follows:

 

19.12                     The parties agree
that from time-to-time it will be beneficial to both parties to issue [**]and other
[**] arising from [**] of [**].  Each
party agrees to submit such [**]for prior approval by the other party if the
name of the other party is mentioned, which approval may be withheld by the
other party in its sole discretion.  Any
Digimarc [**]that mention [**] or [**] must be pre-approved by the [**] Project
Director.

 

Clause 19.15 shall be
replaced as follows.

 

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

 

 

19.15                     Survival.  All clauses of this Agreement which expressly
or by implication are intended to survive the termination of this Agreement
will do so and, for greater certainty and notwithstanding any provision in this
Agreement to the contrary, the provisions set out in clauses 2.5, 3.6-3.10
inclusive, 3.12-3.18 inclusive, 3.20, 3.21, 8.4, 8.5, 8.6, 8.8, 8.11-8.22
inclusive, 9.1, 9.2, 9.3, 9.7, 10, 11, 12, 13, 14, 16, 18, 19 and 20 of this
Agreement shall survive termination of this Agreement by either party for any
reason.

 

20.                               INTELLECTUAL PROPERTY INDEMNIFICATION [**]

 

Add new clause 20 as
follows:

 

20.1                           Digimarc
hereby undertakes to assume and be responsible for the provision of
intellectual property (IP) infringement indemnification in respect of any
infringement or alleged infringement of any third party intellectual property
rights of any kind (“IP Indemnification”) arising in respect of [**]that
Digimarc [**]after January 10, [**] (a) Digimarc
has the right to direct the defense of any infringement and indemnity claim; (b) [**]shall
take such actions as are reasonably requested by Digimarc in connection with
managing, defending, and settling any claim or demand, including mitigation of
damages; (c) to facilitate mitigation or avoid infringement, Digimarc can
supply, at its own cost, [**]prior approval which shall not be unreasonably
withheld; and (d) if [**] as of the date of the notice.

 

20.2                           Unless
otherwise agreed between Digimarc and the [**] Project Director,[**]  Digimarc and the [**] Project Director shall
mutually agree on a [**]such agreement not to be unreasonably withheld.

 

20.3                           [**]Digimarc
shall provide indemnification [**]in accordance with its obligations under this
Agreement, [**] provided that [**]in accordance with clause[**].

 

20.4                           In addition to any other [**]obligations in this
Agreement and in consideration of Digimarc’s continuing compliance at all times
with its obligations under this clause 20, [**] agrees [**]
Digimarc for the IP Indemnification [**]subject to [**]in accordance with
clause 20.5.  [**].

 

20.5                           Prior
to November 15 [**]that the IP Indemnification of clauses 20.1 and 20.2
[**], the [**] Project Director [**] to Digimarc [**] Digimarc under clause
20.4 in the following contract year [**], or, if a review is conducted as per
this clause 20.5, [**]

 

20.6                           [**]is
not included under the provisions of this clause 20.  [**]

 

20.7                           This
clause 20 is not subject to the termination provisions of clause 15, but will
continue until terminated in accordance with this clause 20.7.  [**]
has the option, at its sole discretion, to terminate the IP Indemnification
obligations of Digimarc under this 

 

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COMMISSION.

 

 

clause 20: (a) at the
end of a calendar year and discontinue [**] under this clause 20 as of the end
of that same calendar year with written notice by November 15 of that same
calendar year; (b) immediately on written notice by [**] if this Agreement
is terminated by [**] pursuant to clauses 15.3; or (c) immediately on
written notice by [**] if any of the events specified in clauses 15.3 occur
after the termination of this Agreement whilst the provisions of this clause 20
are in force.   Digimarc has the option
to terminate the indemnification obligations of Digimarc under this clause 20
if [**]under clause 20 after receiving [**] by [**] of a termination notice
from Digimarc.  Upon termination of this
clause 20, Digimarc shall [**] from and [**] shall arrange for [**]covered by
this clause 20 except that if [**]before such termination, Digimarc shall [**],
in accordance with clause 20, [**]

 

20.8         Digimarc undertakes to review the [**] with [**] Contract Authority [**] Technology or any part thereof in [**]

 

20.9         Notwithstanding
the above, Digimarc has agreed [**] to allow the [**] to:

 

a)             continue the IP
Indemnification obligations of Digimarc under this clause 20 for the first six
months of [**].

 

b)            [**] has the option, at its
sole discretion, to terminate the IP Indemnification obligations of Digimarc
under this clause 20 effective June 30, [**] by providing Digimarc with
written notice by April 15, [**].  
Upon termination of this clause 20, Digimarc shall [**]and [**] shall
arrange for [**]covered by this clause 20 except that if [**], in accordance
with clause 20, [**].

 

c)             if [**] does not exercise
its option as set out in (b), the IP Indemnification obligations of Digimarc
under this clause 20 shall continue for the remainder of [**] and [**] Digimarc
[**]

 

20.10       Notwithstanding
the above, Digimarc has agreed for [**] to allow [**] to:

 

a)             continue the IP
Indemnification obligations of Digimarc under this clause 20 for the first six
months of [**].

 

b)            [**] has the option, at its
sole discretion, to terminate the IP Indemnification obligations of Digimarc
under this clause 20 effective June 30, [**] by providing Digimarc with
written notice by March 31, [**].  
Upon termination of this clause 20, Digimarc shall [**]and [**] shall
arrange for [**]covered by this clause 20 except that if [**], in accordance
with clause 20, [**].

 

c)             if [**] does not exercise
its option as set out in (b), the IP Indemnification obligations of Digimarc
under this clause 20 shall continue for the remainder of [**] and
[**]Digimarc[**].

 

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

 

 

IN WITNESS WHEREOF, this
Fourth Amendment has been executed and delivered by the parties hereto as of
the date of the last signature below.

 

	
  [**]

  	
   

  
	
   

  	
   

  
	
  Signature:

  	
   

  	
   

  	
  Signature:

  	
   

  
	
   

  	
   

  
	
  Name:

  	
  Name:

  
	
   

  	
   

  
	
  Title:

  	
  Title:

  
	
   

  	
   

  
	
  Date:

  	
  Date:

  
	
   

  	
   

  
	
  DIGIMARC
  CORPORATION

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
  Name:

  	
  J. Scott Carr

  	
   

  
	
   

  	
   

  
	
  Title:

  	
  President, Digimarc Watermarking Solutions

  	
   

  
	
   

  	
   

  
	
  Date:

  	
   

  
							

 

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SCHEDULE “A”

 

DIGITAL
COUNTERFEIT DETERRENCE SYSTEM DESCRIPTION

 

1.0           GENERAL
DESCRIPTION OF THE DIGITAL COUNTERFEIT DETERRENCE SYSTEM (“CDS”)

 

The CDS is a system designed
to hinder or deter the counterfeiting of bank notes by the use of personal
computer-based equipment.  [**]

 

[**]

 

The capitalized terms in
this Schedule A have the meanings provided in the Counterfeit Deterrence System
Development and License Agreement to the extent same are not elaborated herein.

 

The term [**]refers to a
[**]

 

2.0           FUNCTIONAL
DESCRIPTION OF THE [**]

 

The CDS is comprised of the
following three subsystems:

 

1.             [**]

 

2.             [**]

 

3.             [**]

 

The functions of the various
subsystems and components described below may be changed by the [**] or the
[**].

 

2.1          [**]

 

2.1.1       [**]

 

1.             [**]

 

2.             [**]

 

3.             [**]

 

4.             [**]

 

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2.1.2       [**]

 

1.             [**].

 

2.             [**]

 

3.             [**]

 

4.             [**]

 

5.             [**]

 

2.1.3       [**]

 

1.             [**]

 

2.2          [**]

 

1.             [**]

 

2.             [**]

 

3.             [**]

 

4.             [**]

 

(a)           [**]

(b)           [**]

(c)           [**]

 

5.             [**]

 

6.             [**]

 

7.             [**]

 

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SCHEDULE “B”

 

[**]

1. 0          DESCRIPTION OF [**]

 

Digimarc shall
perform the following Work [**].
(The specific responsibilities to be discharged by [**]  are also described below.)

 

1.1           [**] Study

 

Digimarc shall
conduct the “[**]Study”
described below.

 

1.             Digimarc
shall examine the feasibility of integrating [**] in the form of the [**].  This study will investigate viable technical
approaches and report on the performance, false positive rates, and [**]time that might be expected from
the preferred approach.

 

2.             Digimarc
shall deliver a final report to the [**] by the date set out in the Delivery Schedule attached as Attachment 2
(the “Delivery Schedule”) describing the findings of the study and providing
recommendations useful in the development of a prototype including the
detection rates for [**].

 

1.2           [**] Study

 

Digimarc shall
conduct a study to attempt to characterise the behaviour of [**]and its measure of strength, as
determined by [**] through the [**]. 
Digimarc shall relate the results of this characterisation to [**] performance. Digimarc shall
submit a report on this study to the DLA Project Manager[**]. The results, and other information as available, will be
made available by Digimarc to the [**]  as guidance in the use of [**].

 

As part of the [**], Digimarc shall:

 

1.             deliver a study plan to the DLA Project Manager outlining the objects,
test and analysis methods for the [**];

 

2.             perform
a suite of tests on [**]on [**].  [**] shall assist Digimarc in the performance of a reasonable number of tests
involving the [**];

 

3.             conduct
parameter measurements (e.g. signal correlation and error rate) on the
experimental designs listed in paragraph 4 below and report on and attempt to
characterise how the parameters change through the sequence from [**].

 

4.             [**].

 

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1.3           Design, Development and Production of the CDS[**]

 

Digimarc shall
design, develop and produce for acceptance by [**] of each of the [**]
and each component thereof and the [**]
according to the following process:

 

1.             By
the date set out in the Delivery Schedule, Digimarc shall develop a detailed
specification for each subsystem and component which support the functional
description of the subsystem or component described in Schedule A and the
additional requirements for the subsystem or component, if any, specified
below.

 

2.             Digimarc
shall deliver the specifications to the DLA Project Manager by the dates set
out in the Delivery Schedule for [**]review,  comment and acceptance or rejection.

 

3.             As
soon as possible after receiving them under 2, the DLA Project Manager shall
notify the Digimarc Project Manager in writing whether or not [**]
approves the specifications and if not, why
not. Within fifteen (15) calendar days after receiving notice of
rejection,  Digimarc shall change the specifications
to make them acceptable to [**] and redeliver them to [**] for approval as provided above.

 

4.             Upon
notice of approval under 3, Digimarc shall develop the subsystem or component
which will meet the approved specifications and deliver the “evaluation release”
of the subsystem or component to [**] for testing and acceptance.

 

5.             Within
forty five (45) calendar days after receiving an evaluation version under 4,
the DLA Project Manager shall notify the Digimarc Project Manager in writing
whether or not the evaluation release meets the specifications with details of
the non-compliance.   Any problems shall
be detailed using, to the extent appropriate, the [**]form attached as Schedule “R.”

 

6.             By
the date set out in the Delivery Schedule, Digimarc shall develop a final
release of the subsystem or component incorporating any changes required to the
evaluation release to rectify the non-compliance with the specifications and
any other modifications agreed in writing between the parties’ respective project
managers and deliver the final release to [**] for testing and acceptance.

 

7.             Within
forty five (45) calendar days after receiving the final release under 6,  the DLA Project Manager shall notify the Digimarc
Project Manager in writing whether or not the final release meets the
specifications with details of the non-compliance. Within thirty (30) calendar
days after receiving notice of rejection, 
Digimarc shall rectify all non-compliance and redeliver the final
release to [**] for
approval as provided above.

 

1.4           Acceptance Procedures

 

1.4.1       The
acceptance procedures for the [**]
will include the following:

 

1.             The [**] will be evaluated at the
facilities of up to three [**].

 

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2.             Digimarc
will train one person on the [**]
from each evaluation facility to enable them to evaluate the [**] as part of the acceptance
process. Digimarc shall conduct the training at a single facility to be agreed
between Digimarc Project Manager and the DLA Project Manager.

 

1.4.2       The
acceptance procedures for the [**]
will include the following:

 

1.             Digimarc
shall deliver the [**] to the
DLA Project Manager in an example [**]
that Digimarc will develop to allow the [**]
to conduct acceptance tests on performance, robustness, and resistance to
[**].  Digimarc shall deliver a detailed
description of how the [**] was
integrated and the techniques used to defend against [**].

 

1.5           Implementation of [**]

 

1.5.1       Digimarc
shall implement [**] as follows:

 

1.             [**]

 

1.6           Training Program

 

1.             Digimarc shall develop a training program acceptable
to the DLA Project Manager to train the personnel of [**]as set out in Schedule “Q” to the Agreement. This training program will
be delivered according to the Delivery Schedule for[**].

 

2.             Each [**]
shall equip its site for training and installation prior to the start of
training, following a pre-site configuration guide to be developed by Digimarc.
Failure to establish the required hardware and software environment in advance
of installation will lengthen the required installation and training time and
costs.

 

3.             Training will be provided in English and will be
designed for delivery in five days to students who speak English. Translation,
if required, shall be provided by the [**],
and may lengthen the training time and costs.

 

2.0          DESCRIPTION OF, AND REQUIREMENTS
FOR, VERSIONS 1.0

 

2.1          [**]

 

[**]:

 

2.1.1       [**]

 

1.             [**].

 

2.             [**].

 

3.             [**].

 

4.             [**].

 

5.             [**].

 

6.             [**].

 

2.1.2       [**]

 

1.             [**].

 

2.             [**].

 

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2.1.3       [**]

 

1.             [**].

 

2.             [**].

 

3.             [**].

 

4.             [**].

 

5.             [**].

 

6.             [**].

 

2.2          [**]

 

2.2.1       [**]:

 

1.             [**].

 

2.             [**]:

 

(a)           [**].

 

(b)           [**].

 

3.             [**].

 

4.             [**].

 

5.             [**].

 

6.             [**].

 

7.             [**]:

 

(a)           [**].

 

(b)           [**]CDS [**].

 

(c)           [**].

 

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Attachment
1

 

BASELINE, EXTENDED BASELINE, AND OPTIONAL TESTS

 

	
  1.0

  	
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Attachment 2

 

CDS PHASE 1 DELIVERY SCHEDULE

 

[**]

 

	
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Attachment 3

 

DEVICE VENDORS

 

[**]

 

** CONFIDENTIAL PORTION OMITTED
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SCHEDULE “B,” 
AMENDED ATTACHMENT 3

 

[**]

 

[**]

 

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AMENDED SCHEDULE “C”

PHASE [**] STATEMENT OF
WORK

 

Digimarc shall perform the
following Work during Phase [**]. (The specific responsibilities to be
discharged by [**] during Phase [**] are also described below.)

 

1.0          [**]

 

Digimarc shall [**] for
acceptance by [**] and each component thereof according to the following
process:

 

1.             By the date set
out in the Delivery Schedule, Digimarc shall develop a detailed specification
for the [**] that supports the [**] of the [**] described in Schedule A and the
additional requirements for the [**], if any, specified below.

 

2.             Digimarc shall
deliver the specifications to the DLA Project Manager by the dates set out in
the Delivery Schedule for [**]’ review, comment and acceptance or rejection.

 

3.             As soon as
possible after receiving them under 2, the DLA Project Manager shall notify the
Digimarc Project Manager in writing whether or not [**] approves the
specifications and if not, why not. Within fifteen (15) calendar days after
receiving notice of rejection, Digimarc shall change the specifications to make
them acceptable to [**] and redeliver them to [**] for approval as provided
above.

 

4.             Upon notice of
approval under 3, Digimarc shall [**] which will meet the approved
specifications and deliver [**] and acceptance.

 

5.             Within forty five
(45) calendar days after receiving an [**] under 4, the DLA Project Manager
shall notify the Digimarc Project Manager in writing whether or not the
[**]  meets the specifications with
details of the non-compliance.   Any
problems shall be detailed using, to the extent appropriate, the [**] Problem
Report form attached as Schedule “R.”

 

6.             By the date set
out in the Delivery Schedule, Digimarc shall [**] incorporating any changes
required to the [**] with the specifications and any other modifications agreed
in writing between the parties’ respective project managers and deliver the
[**] to [**] for [**].

 

7.             Within thirty
(30) calendar days after receiving [**] under 6, the DLA Project Manager shall
notify the Digimarc Project Manager in writing whether or not [**] meets the
specifications [**]. Within thirty (30) calendar days after receiving notice of
rejection, Digimarc shall rectify all non-compliance and redeliver the [**] for
approval as provided above.

 

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1.2           Acceptance Procedures

 

1.2.1       The acceptance
procedures for the [**] will include the following:

 

1.             Digimarc shall
deliver the [**] for [**] to the DLA Project Manager in an example [**] that
Digimarc will develop to allow [**] to conduct [**].

 

2.             Digimarc shall
deliver the [**] for [**] DLA Project Manager in a [**] that Digimarc will
develop based on [**].  The [**] will
allow the [**] to conduct [**].

 

3.             Digimarc shall
deliver into escrow and review with the [**] a detailed description of how the
[**].

 

1.3           [**]

 

1.3.1       Digimarc shall [**]
as follows:

 

1.             Digimarc shall
[**] with [**] attached to Schedule B as Attachment 3 or such other [**] as may
be agreed between the parties’ respective Project Managers.  Digimarc shall deliver [**].

 

2.             Digimarc shall
[**] with at least [**] from [**] or [**] as may be agreed between the parties’
respective Project Managers.  Development
of [**].

 

2.0           DESCRIPTION OF, AND REQUIREMENTS FOR, [**]

 

For the purpose of this
Schedule, [**] means an agreed upon [**] used to
produce [**].  For Phase [**], the [**]
was the February [**].

 

2.1           [**]

 

Digimarc shall develop for
approval by the DLA Project Manager a set of [**] that defines the term [**].
This includes a [**].

 

2.2           New [**]

 

The [**] was selected by the
[**] as the new [**] design. The [**] will be [**] as described in paragraph
2.5.1.

 

2.3           [**]

 

Digimarc shall [**]
according to the following requirements:

 

2.3.1        [**]  Requirements

 

The [**] will meet the
following [**] requirements:

 

1.             The [**] shall be
capable of being [**].

 

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2.             The [**] shall
meet all the requirements in Schedule B paragraph 2.2, plus it shall [**].

 

3.             The [**] shall
[**] when more than one [**].

 

4              The [**] shall
[**]. Refinements to the [**] will be recommended as required to accommodate
the unique needs of a [**].

 

2.3.2        [**] Improvements

 

Digimarc shall [**] improvements that will be incorporated into [**] as
follows:

 

1.             Digimarc
will focus such improvement work on the new [**].

 

2.             The
[**] made at the start of the Phase [**] and described below in section 2.5.1 (4) using
the [**] will establish a [**].  The [**]
and Digimarc will mutually agree to [**]. Since these [**] will be established
after the detailed specification has been delivered to [**], as described in
the Delivery Schedule, the [**] will be described in an amendment to the [**]
detailed specification.

 

3.             [**]
improvements will focus on improving [**] in [**].  [**] and Digimarc will mutually set priorities
for the various possible improvements, and such priorities will guide Digimarc’s
development work.

 

2.3.3        [**]

 

Digimarc shall build and [**]:

 

1.             Digimarc
shall [**].

 

2.             Digimarc
shall build and maintain [**], or [**], for [**] and all [**] to use the [**].

 

2.4           [**] and [**]

 

Digimarc shall deliver a
[**] and [**]. Digimarc shall work [**]or independently to [**] as mutually
agreed with [**].  [**] will be capable
of [**] identified by Digimarc and [**]. The capability to [**] selected by
[**] will be added if resources and schedule permit as mutually agreed by
Digimarc and [**].  Once a decision is
made as to whether Digimarc will work [**] or independently, Attachment 1 will
be updated with the [**] and[**] schedule.

 

To
complete the development, it may be necessary for Digimarc [**] in order to
implement [**].  [**] and Digimarc will
mutually agree on a strategy to [**].

 

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2.5           [**] Study

 

Digimarc shall conduct the
[**] Phase of the [**] Study that attempts to [**] the relationship between
[**] during [**] and [**] as follows:

 

2.5.1       [**]

 

Digimarc shall work [**] as
follows:

 

1.             [**]
shall provide Digimarc with [**] for the [**].

 

2.             Digimarc
shall [**] and provide the [**].

 

3.             [**] shall [**]
and provide the [**] to Digimarc.

 

4.             Digimarc shall
assess and report [**] in the versions of the [**].  The version of [**] to use as the [**] will
be mutually agreed to between [**] and Digimarc.  These [**] will establish a [**] to use in
[**] improvements.

 

2.5.2       [**] Characterization

 

Digimarc shall:

 

1.             conduct
a study to characterize the behavior of the [**];

 

2.             include
a study of the [**] and [**] of the [**] such that [**] into a [**] may be [**];

 

3.             [**].

 

4.             deliver
a study plan to the DLA Project Manager outlining the objectives, test and
analysis methods for the [**];

 

5.             deliver a report
of the results of the study to the DLA Project Manager by the dates set out in
the Delivery Schedule.

 

2.6           [**]

 

2.6.1        [**] in [**] Applications

 

Digimarc shall [**] as
described in section 1.3.1 (1) as follows:

 

1.             Digimarc shall
provide [**] assist [**] in [**] in [**].

 

2.             Digimarc and [**]
shall agree to [**] in [**].

 

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3.             Digimarc shall
[**].

 

4.             [**] may, at its
option, evaluate [**] of [**] which [**] has been [**]. The DLA Project Manager
shall identify to Digimarc any concerns which [**] may have relating to [**] or
[**]. Digimarc shall make a proposal to the DLA Project Manager to address
those concerns for approval by the DLA Project Manager.

 

2.6.2        [**] and [**]

 

Digimarc shall [**] in [**]
as follows:

 

1.             Digimarc and the [**] shall define [**]program that
establishes agreed to [**] and [**]. 
This program will be developed with the assistance [**] and will be
described by a [**]plan. This [**] program will be comprised of three elements:

 

a) To [**].

 

b) To [**].

 

2.             Digimarc shall [**].

 

3.             Digimarc shall[**].

 

4.             Digimarc shall [**].

 

5.             [**].

 

6.             [**] shall support
in-person meetings with [**] as needed to [**].

 

7.             Digimarc shall
[**]. Digimarc shall [**], and Digimarc shall [**].  Digimarc shall report [**] to [**].

 

2.7           [**] Study

 

Digimarc shall work [**] to [**] and Digimarc shall provide[**].

 

2.8           [**]

 

Digimarc shall [**] as
follows:

 

1.             Digimarc and [**]
shall develop a plan to [**] in the [**], and to[**].

 

2.             Digimarc
shall update the [**] documentation and [**] on an as-needed basis [**].

 

3.             Digimarc shall
[**].

 

** CONFIDENTIAL PORTION OMITTED
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Attachment 1

 

[**] PHASE [**] DELIVERY
SCHEDULE

 

[**]

 

	
  Num.

  	
   

  	
  Deliverable

  	
   

  	
  Owner

  	
   

  	
  Sec/Para Ref.

  	
   

  	
  Depends

  On

  	
   

  	
  Days

  	
   

  	
  CompletionDate

  	
   

  
	
  [**]-1

  	
   

  	
  Detailed
  [**] specification delivered

  	
   

  	
  [**]

  	
   

  	
  1.1

  	
   

  	
  —

  	
   

  	
  —

  	
   

  	
  28 Feb [**]

  	
   

  
	
  [**]-2

  	
   

  	
  [**]
  specification signoff

  	
   

  	
  [**]

  	
   

  	
  1.2

  	
   

  	
  [**]-1

  	
   

  	
  11

  	
   

  	
  9 Mar [**]

  	
   

  
	
  [**]-3

  	
   

  	
  Detailed
  [**]

  specification update – [**]

  	
   

  	
  [**]

  	
   

  	
  1.1

  	
   

  	
  [**]-3

  [**]-2

  	
   

  	
  30

  	
   

  	
  13 Apr [**]

  	
   

  
	
  [**]-4

  	
   

  	
  [**]
  customer specification signoff

  	
   

  	
  [**]

  	
   

  	
  1.2

  	
   

  	
  [**]-3

  	
   

  	
  11

  	
   

  	
  18 Apr [**]

  	
   

  
	
  [**]-5

  	
   

  	
  [**] Approved

  	
   

  	
  [**]

  	
   

  	
  2.3.1.4

  	
   

  	
  [**]-2

  	
   

  	
  82

  	
   

  	
  1 Jun [**]

  	
   

  
	
  [**]-6

  	
   

  	
  [**]
  Test Set change deadline

  	
   

  	
  [**]

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  1 Jun [**]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  [**]

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  [**]-7

  	
   

  	
  Delivery
  [**]

  	
   

  	
  [**]

  	
   

  	
  1.4

  	
   

  	
  [**]-4

  	
   

  	
  97

  	
   

  	
  8 Sep [**]

  	
   

  
	
  [**]-8

  	
   

  	
  [**]
  acceptance of [**]

  	
   

  	
  [**]

  	
   

  	
  1.5

  	
   

  	
  [**]-5

  	
   

  	
  41

  	
   

  	
  5 Oct [**]

  	
   

  
	
  [**]-9

  	
   

  	
  Delivery
  of the [**]

  	
   

  	
  [**]

  	
   

  	
  1.6

  	
   

  	
  [**]-6

  	
   

  	
  42

  	
   

  	
  1 Dec [**]

  	
   

  
	
  [**]-10

  	
   

  	
  [**]
  acceptance of final [**]

  	
   

  	
  [**]

  	
   

  	
  1.7

  	
   

  	
  [**]-7

  	
   

  	
  27

  	
   

  	
  28 Dec [**]

  	
   

  

 

[**]  and [**]

 

	
  Num.

  	
   

  	
  Deliverable

  	
   

  	
  Owner

  	
   

  	
  Sec/Para Ref.

  	
   

  	
  Depends

  On

  	
   

  	
  Days

  	
   

  	
  CompletionDate

  	
   

  
	
   

  	
   

  	
  [**] Study with [**]

  	
   

  	
  [**]

  	
   

  	
   

  	
   

  	
  —

  	
   

  	
  —

  	
   

  	
  15 Feb [**]

  	
   

  
	
  [**]-1

  	
   

  	
  [**]
  report delivered

  	
   

  	
  [**]

  	
   

  	
  2.4

  	
   

  	
  —

  	
   

  	
  —

  	
   

  	
  15 Feb [**]

  	
   

  
	
  [**]-2

  	
   

  	
  [**]
  evaluation of [**]

  	
   

  	
  [**]

  	
   

  	
  2.4

  	
   

  	
  [**]-1

  	
   

  	
  43

  	
   

  	
  28 Mar [**]

  	
   

  
	
  [**]-3

  	
   

  	
  [**]
  determined

  	
   

  	
  [**]

  	
   

  	
  2.4

  	
   

  	
  [**]-2

  	
   

  	
  —

  	
   

  	
  28 Mar [**]

  	
   

  

 

** CONFIDENTIAL PORTION OMITTED
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[**]

 

	
  Num.

  	
   

  	
  Deliverable

  	
   

  	
  Owner

  	
   

  	
  Sec/Para Ref.

  	
   

  	
  Depends

  On

  	
   

  	
  Days

  	
   

  	
  CompletionDate

  	
   

  
	
  [**]-1

  	
   

  	
  [**]

  	
   

  	
  [**]

  	
   

  	
  2.5.1.1

  	
   

  	
  —

  	
   

  	
  —

  	
   

  	
  17 Jan [**]

  	
   

  
	
  [**]-2

  	
   

  	
  [**].

  	
   

  	
  [**]

  	
   

  	
  2.5.1.2

  	
   

  	
  [**]-1

  	
   

  	
  21

  	
   

  	
  8 Feb [**]

  	
   

  
	
  [**]-3

  	
   

  	
  [**]

  	
   

  	
  [**]

  	
   

  	
  2.5.1.3

  	
   

  	
  [**]-2

  	
   

  	
  23

  	
   

  	
  15 Mar [**]

  	
   

  
	
  [**]-4

  	
   

  	
  [**]
  reported and Phase [**]

  	
   

  	
  [**]

  	
   

  	
   

  	
   

  	
  [**]-3

  	
   

  	
  23

  	
   

  	
  13 Apr [**]

  	
   

  

 

[**]
Study

 

	
  Num.

  	
   

  	
  Deliverable

  	
   

  	
  Owner

  	
   

  	
  Sec/Para Ref.

  	
   

  	
  Depends

  On

  	
   

  	
  Days

  	
   

  	
  CompletionDate

  	
   

  
	
  [**]-1

  	
   

  	
  [**]
  study plan delivered

  	
   

  	
  [**]

  	
   

  	
  2.5.2.3

  	
   

  	
  —

  	
   

  	
  —

  	
   

  	
  28 Feb [**]

  	
   

  
	
  [**]-2

  	
   

  	
  [**]
  Study plan signoff

  	
   

  	
  [**]

  	
   

  	
  1.2

  	
   

  	
  [**]-1

  	
   

  	
  11

  	
   

  	
  9 Mar [**]

  	
   

  
	
  [**]-1

  	
   

  	
  [**] Analysis [**]
  delivered

  	
   

  	
  [**]

  	
   

  	
   

  	
   

  	
  [**]-2

  	
   

  	
  103

  	
   

  	
  8 Sep [**]

  	
   

  
	
  [**]-2

  	
   

  	
  Draft
  report delivered

  	
   

  	
  [**]

  	
   

  	
  2.5.2.5

  	
   

  	
  [**]-1

  	
   

  	
  103

  	
   

  	
  8 Sep [**]

  	
   

  
	
  [**]-3

  	
   

  	
  [**]
  evaluation of draft report

  	
   

  	
  [**]

  	
   

  	
  —

  	
   

  	
  [**]-2

  	
   

  	
  20

  	
   

  	
  6 Oct [**]

  	
   

  
	
  [**]-4

  	
   

  	
  Final
  report delivered

  	
   

  	
  [**]

  	
   

  	
  —

  	
   

  	
  [**]-3

  	
   

  	
  41

  	
   

  	
  4 Dec [**]

  	
   

  
	
  [**]-5

  	
   

  	
  [**]
  evaluation of the final report

  	
   

  	
  [**]

  	
   

  	
  —

  	
   

  	
  [**]-4

  	
   

  	
  20

  	
   

  	
  29 Dec [**]

  	
   

  
	
  [**]-1

  	
   

  	
  [**] Study draft report
  delivered

  	
   

  	
  [**]

  	
   

  	
   

  	
   

  	
  [**]-2

  	
   

  	
  75

  	
   

  	
  1 Aug [**]

  	
   

  
	
  [**]-2

  	
   

  	
  [**]
  evaluation of draft report

  	
   

  	
  [**]

  	
   

  	
  —

  	
   

  	
  [**]-1

  	
   

  	
  28

  	
   

  	
  29 Aug [**]

  	
   

  
	
  [**]-3

  	
   

  	
  Final
  report delivered

  	
   

  	
  [**]

  	
   

  	
  —

  	
   

  	
  [**]-2

  	
   

  	
  41

  	
   

  	
  25 Oct [**]

  	
   

  
	
  [**]-4

  	
   

  	
  [**]
  evaluation of the final report

  	
   

  	
  [**]

  	
   

  	
  —

  	
   

  	
  [**]-3

  	
   

  	
  20

  	
   

  	
  21 Nov [**]

  	
   

  
	
  [**]-1

  	
   

  	
  [**] Study draft report
  delivered

  	
   

  	
  [**]

  	
   

  	
   

  	
   

  	
  [**]-2

  	
   

  	
  60

  	
   

  	
  30 May [**]

  	
   

  
	
  [**]-2

  	
   

  	
  [**]
  evaluation of draft report

  	
   

  	
  [**]

  	
   

  	
  —

  	
   

  	
  [**]-1

  	
   

  	
  40

  	
   

  	
  25 Jul [**]

  	
   

  
	
  [**]-3

  	
   

  	
  Final
  report delivered

  	
   

  	
  [**]

  	
   

  	
  —

  	
   

  	
  [**]-2

  	
   

  	
  41

  	
   

  	
  20 Sep [**]

  	
   

  
	
  [**]-4

  	
   

  	
  [**]
  evaluation of the final report

  	
   

  	
  [**]

  	
   

  	
  —

  	
   

  	
  [**]-3

  	
   

  	
  20

  	
   

  	
  17 Oct [**]

  	
   

  

 

** CONFIDENTIAL PORTION OMITTED
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Verification Test ([**])

 

	
  Num.

  	
   

  	
  Deliverable

  	
   

  	
  Owner

  	
   

  	
  Sec/Para Ref.

  	
   

  	
  Depends

  On

  	
   

  	
  Days

  	
   

  	
  CompletionDate

  	
   

  
	
  [**]-1

  	
   

  	
  Proposed
  [**] program

  	
   

  	
  [**]

  	
   

  	
   

  	
   

  	
  —

  	
   

  	
  —

  	
   

  	
  28 Jul [**]

  	
   

  
	
  [**]-2

  	
   

  	
  [**]
  feedback on verification test [**]

  	
   

  	
  [**]

  	
   

  	
   

  	
   

  	
  [**]-1

  	
   

  	
  30

  	
   

  	
  24 Aug [**]

  	
   

  
	
  [**]-3

  	
   

  	
  Final
  verification test [**] signoff

  	
   

  	
  [**]

  	
   

  	
   

  	
   

  	
  [**]-2

  	
   

  	
  25

  	
   

  	
  7 Sep [**]

  	
   

  
	
  [**]-4

  	
   

  	
  [**]
  acceptance of the [**] test [**]

  	
   

  	
  [**]

  	
   

  	
   

  	
   

  	
  [**]-3

  	
   

  	
  13

  	
   

  	
  21 Sep [**]

  	
   

  

 

[**] Tests

 

	
  Num.

  	
   

  	
  Deliverable

  	
   

  	
  Owner

  	
   

  	
  Sec/Para Ref.

  	
   

  	
  Depends

  On

  	
   

  	
  Days

  	
   

  	
  CompletionDate

  	
   

  
	
  [**]-1

  	
   

  	
  Proposed
  [**] test program

  	
   

  	
  [**]

  	
   

  	
   

  	
   

  	
  —

  	
   

  	
  —

  	
   

  	
  28 Apr [**]

  	
   

  
	
  [**]-2

  	
   

  	
  [**]
  feedback on [**] test program

  	
   

  	
  [**]

  	
   

  	
   

  	
   

  	
  [**]-1

  	
   

  	
  40

  	
   

  	
  25 May [**]

  	
   

  
	
  [**]-3

  	
   

  	
  Final
  [**] test program signoff

  	
   

  	
  [**]

  	
   

  	
   

  	
   

  	
  [**]-2

  	
   

  	
  35

  	
   

  	
  8 Jun [**]

  	
   

  
	
  [**]-4

  	
   

  	
  [**]
  acceptance of the [**] test program

  	
   

  	
  [**]

  	
   

  	
   

  	
   

  	
  [**]-3

  	
   

  	
  13

  	
   

  	
  22 Jun [**]

  	
   

  

 

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

 

 

AMENDED SCHEDULE “D”

 

PHASE [**] STATEMENT OF WORK

 

1.0     DESCRIPTION OF
PHASE [**] WORK

 

Digimarc shall perform
the following Work during Phase [**]. (The specific responsibilities to be
discharged by [**] during Phase [**] are also described below.)

 

1.1        [**] Of The Phase [**] Deliverables

 

Digimarc shall [**] for
acceptance by [**] the Phase [**] Deliverables according to the following
process:

 

1.     By
the date set out in the Delivery Schedule outlined in Attachment 1, Digimarc
shall develop a detailed Specification for each [**] that supports the
functional description of the [**] described in Schedule A as relates to Phase
[**] and the additional requirements for the [**], if any, specified below.

 

2.     Digimarc
shall deliver the Specifications to the DLA Project Manager by the dates set
out in the Delivery Schedule for [**] review, comment and acceptance or
rejection.

 

3.     Within
thirty (30) calendar days after receiving them under 2, the DLA Project Manager
shall notify the Digimarc Project Manager in writing whether or not [**]
approves the Specifications and if not, why not. Within fifteen (15) calendar
days after receiving notice of rejection, Digimarc shall change the
Specifications to make them acceptable to [**] and redeliver them to [**] for
approval as provided above.

 

4.     Upon
notice of approval under 3, Digimarc shall [**] which will meet the approved
Specifications and deliver the [**] and acceptance.

 

5.     Within
thirty (30) calendar days after receiving an [**] under 4, the DLA Project
Manager shall notify the Digimarc Project Manager in writing whether or not the
evaluation release meets the Specifications with details of any
non-compliance.   Any problems shall be
detailed using, to the extent appropriate, the [**] Report form attached as
Schedule “R.”

 

6.     By
the date set out in the Delivery Schedule, Digimarc shall [**] incorporating
any changes required to the [**] with the Specifications and any other
modifications agreed in writing between the parties’ respective project
managers and deliver the final release to [**] for [**] and acceptance.

 

7.     Within
fifteen (15) calendar days after receiving the final release under 6, the DLA
Project Manager shall notify the Digimarc Project Manager in writing whether or
not the final release meets the Specifications with details of any
non-compliance. Within thirty (30) calendar days 

 

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

 

 

after receiving any notice of rejection, Digimarc shall rectify all
[**] for approval as provided above.

 

1.2        Acceptance Procedures

 

1.2.1        [**]

 

The acceptance procedures for the [**] will be the
following:

 

1.     Digimarc
shall deliver or make available the [**] for [**] to the DLA Project Manager in
a [**] that Digimarc will develop based on [**] from a [**].  The [**] will allow the [**] to conduct [**]
as set forth in the Specification.

 

2.     Digimarc
shall deliver into escrow and review with the [**] a detailed description of how
the [**] for [**] was integrated into the [**] and the techniques used to [**].

 

1.2.2        [**]

 

The acceptance procedure for the [**] will be the
following:

 

1.     Digimarc shall
deliver or make available the [**] to the DLA Project Manager in a suitably
modified [**] from a [**] for [**] on compliance with the Specification.

 

2.     Digimarc shall
deliver into escrow and review with the [**] a detailed description of how the
[**] was [**], as well as copies of the [**]. 
This excludes deposit into escrow of any [**] proprietary data or
information for the design and operation of the [**].

 

2.0     DESCRIPTION OF,
AND REQUIREMENTS FOR, PHASE [**] DELIVERABLES

 

2.1        [**]

 

Digimarc shall develop the [**] according to the
following requirements:

 

2.1.1        [**] requirements

 

[**] will meet the following requirements:

 

1.     [**]
shall be capable of being [**].

 

2      [**] shall be
capable of [**] shall be conditional upon Digimarc [**]Digimarc and the [**] to
intellectual property [**] in order to [**].

 

3.     Digimarc
shall [**] needed for replacement of the [**] with a suitably designed
alternative [**].

 

4.     Detailed
requirements for [**] will be specified in a Specification delivered in
accordance with the Delivery Schedule outlined in Attachment 1.

 

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

 

 

2.2        [**]

 

Digimarc shall develop an [**] according to the
following requirements:

 

1.  Digimarc shall make [**] changes to the [**]
necessary for [**].

 

2.     Digimarc shall
develop [**] needed to implement an [**]. 
Digimarc will engage one or more [**] in this effort [**] during the
[**] phase.

 

3.     Digimarc shall
work with one [**] to implement the [**] of the [**] a selected [**].  The implementation will be used to
demonstrate that the [**] functions properly when [**].

 

4.     Digimarc shall
deliver or make available the [**] for assessment by the [**].

 

5.     Digimarc shall
deliver a detailed technical report on the findings of the Work and
recommendations for any future work including requirements to add [**].

 

The detailed requirements for the [**] will be
specified in a Specification delivered in accordance with the Delivery Schedule
outlined in Attachment 1.

 

2.3        [**]

 

2.3.1        Implementation
of [**]

 

Digimarc shall implement the [**] as follows:

 

1.     Digimarc
shall [**] to [**] with [**]from the list of such [**] attached to Schedule B
as Attachment 3 or such other [**] as may be agreed to between the parties’
respective project managers.  Digimarc
shall deliver and [**].

 

2.     Digimarc
shall [**] to [**] attached to Schedule B as Attachment 3 or such other [**] as
may be agreed to between the parties’ respective project managers.  Digimarc shall deliver and [**].

 

3.     Digimarc
shall [**] to [**] attached to Schedule B as Attachment 3 or such other [**] as
may be agreed to between the parties’ respective project managers.

 

2.3.2        Support for [**]

 

Digimarc shall support [**] that [**] as follows:

 

1.     Digimarc
shall provide [**] to assist [**].

 

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

 

 

2.     Digimarc
shall administer the certification program approved by [**] for the ongoing
review and certification of [**].

 

3.     [**]
may, at its option, evaluate the [**] each[**]. 
The DLA Project Manager shall identify to Digimarc any concerns that
[**] may have relating to [**]. Digimarc shall make a proposal to the [**]
Project Manager to address those concerns for approval by the [**] Project
Manager.

 

2.3.3        [**]

 

Digimarc shall operate, maintain and improve the
[**] as follows:

 

1.     Digimarc
shall operate the [**] making it available at [**].

 

2.3.4        [**] and [**] research

 

1.     Digimarc
shall develop, in cooperation with the DLA Project Manager, a program of
activities to enhance [**] and [**]. This program will provide detailed
strategies and plans. The focus will be on [**] and [**]. The program will
support [**] initiatives to motivate [**] of [**].

 

2.     The
DLA Contract Authority will authorize use of an additional [**] upon successful
completion by May 15, [**] of the [**] specified in the program described
in 2.3.4.1.

 

3.     Digimarc
shall deliver to the [**] and provide training for [**].

 

4.     Digimarc
shall track and summarize for [**] and [**] trends that affect the [**] and
development strategy.

 

5.     [**]
shall support in-person meetings with [**] as needed to promote support for the
[**] of the [**].

 

6.     Digimarc
shall manage [**].

 

2.3.5        [**]

 

1.     Digimarc
shall [**] the [**] to [**] and their [**], including administration of [**].

 

3.0    Representations
and Warranties.

 

For the avoidance of doubt, with the exception of
the conditions in Section 2.1.1.2 of Amended Schedule D, Digimarc
represents, warrants and undertakes that the performance of its obligations
under Amended Schedule D are covered by Section 10 of the Agreement.

 

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

 

 

Amended Schedule D

Attachment 1

 

[**] PHASE [**] DELIVERY
SCHEDULE

 

[**] for [**]

 

	
  Num.

  	
   

  	
  Deliverable

  	
   

  	
  Owner

  	
   

  	
  Sec/Para Ref.

  	
   

  	
  Depends

  On

  	
   

  	
  Days

  	
   

  	
  CompletionDate

  	
   

  
	
  [**]-1

  	
   

  	
  Detailed
  [**] specification delivered

  	
   

  	
  [**]

  	
   

  	
  1.1.2

  	
   

  	
  —

  	
   

  	
  —

  	
   

  	
  15 Jan [**]

  	
   

  
	
  [**]-2

  	
   

  	
  [**]
  specification signoff

  	
   

  	
  [**]

  	
   

  	
  1.1.3

  	
   

  	
  [**]-1

  	
   

  	
  15

  	
   

  	
  31 Jan [**]

  	
   

  
	
  [**]-3

  	
   

  	
  [**] Approved

  	
   

  	
  [**]

  	
   

  	
  2.1

  	
   

  	
  [**]-2

  	
   

  	
  28

  	
   

  	
  1 Mar [**]

  	
   

  
	
  [**]-4

  	
   

  	
  [**]
  of the [**]evaluation release

  	
   

  	
  [**]

  	
   

  	
  1.1.4

  	
   

  	
  [**]-2

  	
   

  	
  161

  	
   

  	
  7 Sept [**]

  	
   

  
	
  [**]-5

  	
   

  	
  [**]
  acceptance of [**]

  	
   

  	
  [**]

  	
   

  	
  1.1.5

  	
   

  	
  [**]-4

  	
   

  	
  30

  	
   

  	
  19 Oct [**]

  	
   

  
	
  [**]-6

  	
   

  	
  [**]
  of the [**]

  	
   

  	
  [**]

  	
   

  	
  1.1.6

  	
   

  	
  [**]-5

  	
   

  	
  28

  	
   

  	
  3 Dec [**]

  	
   

  
	
  [**]-7

  	
   

  	
  [**]
  acceptance of [**]

  	
   

  	
  [**]

  	
   

  	
  1.1.7

  	
   

  	
  [**]-6

  	
   

  	
  28

  	
   

  	
  31 Dec [**]

  	
   

  

 

[**]

 

	
  Num.

  	
   

  	
  Deliverable

  	
   

  	
  Owner

  	
   

  	
  Sec/Para Ref.

  	
   

  	
  Depends

  On

  	
   

  	
  Days

  	
   

  	
  CompletionDate

  	
   

  
	
  [**]-1

  	
   

  	
  [**]
  Specification

  	
   

  	
  [**]

  	
   

  	
  1.1.2

  	
   

  	
  —

  	
   

  	
  —

  	
   

  	
  15 Jan [**]

  	
   

  
	
  [**]-2

  	
   

  	
  [**]
  Specification signoff

  	
   

  	
  [**]

  	
   

  	
  1.1.3

  	
   

  	
  [**]-1

  	
   

  	
  15

  	
   

  	
  31Jan [**]

  	
   

  
	
  [**]-3

  	
   

  	
  [**]

  	
   

  	
  [**]

  	
   

  	
  1.1.6

  	
   

  	
  [**]-2

  	
   

  	
  213

  	
   

  	
  3 Dec [**]

  	
   

  
	
  [**]-4

  	
   

  	
  Deliver
  [**] Report

  	
   

  	
  [**]

  	
   

  	
  1.1.6

  	
   

  	
  [**]-2

  	
   

  	
  213

  	
   

  	
  3 Dec [**]

  	
   

  
	
  [**]-5

  	
   

  	
  [**]
  acceptance of [**] and report

  	
   

  	
  [**]

  	
   

  	
  1.1.7

  	
   

  	
  [**]-3, [**]-4

  	
   

  	
  28

  	
   

  	
  31 Dec [**]

  	
   

  

 

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

 

 

DLA: SCHEDULE “E”

 

ARBITRATION
AGREEMENT

 

An
Agreement dated June 21, [**], hereby amended effective as of January 1,
[**], by and among the Parties (as defined below) to submit for final and
binding resolution by [**] arbitration all Disputes (as defined below) arising
out of or otherwise connected to a project relating to the [**] (as defined in
the Development and License Agreement identified below) and the services of
Digimarc (as defined below) in relation to the project.

 

WHEREAS,
Digimarc Corporation, a corporation existing under the laws of the State of
Delaware, USA, is developing, [**] and referred to in the Development and
License Agreement (identified below) as [**]), technology [**] as defined in
the Development and License Agreement identified below);

 

WHEREAS,
the [**] has asked the [**], to provide it with [**] of the [**] as set out in
a Development and License Agreement (the “DLA”) effective from January 1,
[**] and [**] Agreement
effective January 1, [**];

 

WHEREAS,
in performance of the DLA, the [**] and Digimarc will enter into a contract
with [**], which will act as escrow agent for certain purposes pursuant to an
Escrow Agreement (the “Escrow Agreement”) which is attached as Schedule M to
the DLA;

 

WHEREAS,
in the course of performance of the DLA, Digimarc may [**] licenses to certain
[**] of license agreement which are attached at Schedules K-1, K-2, L-1 and L-2
to the DLA all as amended;

 

WHEREAS,
in the course of performance of the DLA, Digimarc may enter into System Support
Services Agreements, a form of which is attached at Schedule O to the DLA, with
licensees;

 

WHEREAS,
in the course of performance of the DLA, Digimarc may provide consulting and
programming services to a [**] on the terms described in Schedule P to the DLA
to assist [**] to ensure that a [**] (as defined in the DLA) [**];

 

WHEREAS,
[**], pursuant to an[**] Agreement (as amended from time to time) of or of
approximately the same date as this Arbitration Agreement (the “[**] Agreement”),
agreed to [**] in respect of any [**] in connection with the project;

 

WHEREAS,
given [**] of the Agreements (as defined below), all the Parties (as defined
below) to the Agreements (as defined below) are desirous to avoid recourse to
[**] courts and the potential expense and delay of prosecuting connected Claims
(as defined below) in more than one proceeding and also to exclude the risk of
having to apply contradictory or inconsistent fact-findings, conclusions,
judgments or awards for any Dispute (as defined below) which may arise between
or among the Parties (as defined below) and instead wish to resort to 

 

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

 

 

[**] arbitration as the
exclusive means of resolving in a final, binding and consistent manner all
Disputes (as defined below) arising in connection with the Agreements (as
defined below) for the [**] and of establishing through this Arbitration
Agreement a mechanism to these ends.

 

The Parties agree as
follows:

 

1.             The meaning of the following terms in this Arbitration
Agreement shall be as set out below:

 

(a)           “Agreements” shall mean all agreements, contracts, schedules or other
arrangements in connection with the development or licensing or [**] or
servicing of the [**] as listed in Schedule B, as amended from time to
time.

 

(b)           “Appointing Authority” shall mean the [**].

 

(c)           “Arbitrating Party” or “Arbitrating Parties” shall mean (i) any and
all Parties which have become involved in any arbitration under this
Arbitration Agreement as Claimants or Respondents or (ii) which have been
otherwise joined to any arbitration under this Arbitration Agreement or (iii) the
[**], Digimarc, any [**] or any [**] in the aforementioned circumstances or when
it or they has or have exercised their right of Intervention in any arbitration
under this Arbitration Agreement.

 

(d)           “Claim” shall include without limitation any claim or counterclaim or
crossclaim made by an Arbitrating Party.

 

(e)           “Claimant” or “Claimants” shall mean any Party which, either separately
or together with any other Party or Parties, initiates an arbitration under
this Arbitration Agreement.

 

(f)            “Dispute” shall mean any dispute, difference, controversy or claim
except only for an Excluded Dispute (as defined below) between or among the
parties arising out of or relating to or in connection with this Arbitration
Agreement or any of the Agreements listed in Schedule B, including, but
not limited to, their signature, validity, interpretation, performance,
amendment, breach, termination and post-termination obligations.

 

(g)           “Excluded Dispute” shall mean only a dispute between the [**] and
Digimarc as described in clause 6.4 of the Escrow Agreement as to the
occurrence of a Release Event as defined in clause 6.1 of the Escrow Agreement.
Any such dispute shall be referred to an expert appointed by the Managing
Director of the Escrow Agent (as defined in the Escrow Agreement) and any
decision rendered by such an expert pursuant to clause 6.4 of the Escrow
Agreement shall be accorded res judicata
effect by any arbitral tribunal appointed under this Arbitration Agreement.

 

(h)           “Intervention” shall mean the right of any of the [**], Digimarc, any
[**] or any [**] to intervene into a particular arbitration as an Arbitrating
Party even when it is not a 

 

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

 

 

Claimant or Respondent and has not been joined into any arbitration by
an Arbitrating Party.

 

(i)            “Notice of Arbitration” shall mean the document given when initiating
recourse to arbitration or to join any Party as an Arbitrating Party as well as
to initiate recourse in arbitration against any Party which is already an
Arbitrating Party.

 

(j)            “Party” or “Parties” shall mean any of the signatories to this
Arbitration Agreement and those parties listed in Schedule A as amended
from time to time.

 

(k)           “Respondent” or “Respondents” shall mean any Party which, either
separately or together with any other Party, is named as a Respondent in an
arbitration by any Claimant or Claimants.

 

(l)            In interpreting this Arbitration Agreement, singular shall be read for
plural where appropriate to reflect the multi-party nature of any arbitration.

 

2.             Any Dispute shall be finally settled by arbitration
under the [**] as in force at the date of [**] except as the [**] Rules are
modified in the body and Schedule C of this Arbitration Agreement and to
the exclusion of any provisions of the [**] Rules as are inconsistent with
the express provisions of this Arbitration Agreement or with the multi-party
nature of an arbitration under this Arbitration Agreement.

 

3.             [**]

 

4.             The place of Arbitration shall be [**].

 

5.             Arbitration pursuant to this Arbitration Agreement
shall be the sole and exclusive means for resolving any Dispute.

 

6.             No entity shall become a Party unless that entity has
become a Party to this Arbitration Agreement by executing a counterpart of this
Arbitration Agreement.

 

7.             No Party shall enter into any contract or agreement
which alters or amends in any material respect any of the rights or obligations
of any Party under any Agreement unless the contract or agreement shall contain
the clause set out in Schedule D.  Each
Party to this Arbitration Agreement hereby expressly accepts the addition of
new parties to Schedule A and of new contracts or agreements to Schedule
B.  Any Party which fails to act in
conformity with this Article 7 shall be fully liable for any loss, injury
or damage whatsoever resulting therefrom to any other Party.

 

8. (a)       Any Claimant or Claimants shall initiate recourse to arbitration by
giving to each Respondent a Notice of Arbitration and statement of claim which
specify, inter alia, the Agreement or Agreements
involved in the Dispute. Any Claimant or Claimants shall also at the same time
send a copy of the same Notice of Arbitration and statement of claim to 

 

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

 

 

all other Parties and to the [**]. An arbitration shall be deemed to
commence upon receipt of the Notice of Arbitration and statement of claim by
the [**].

 

(b)           Within thirty (30) days of the date on which each Respondent received
the Notice of Arbitration, a Respondent may give a third party Notice of
Arbitration in order to join into the arbitration any Party or Parties as an
Arbitrating Party or Arbitrating Parties. The Respondent shall also at the same
time send a copy of any third party Notice of Arbitration to all other Parties
and to the [**].

 

(c)           Any third party joined as an Arbitrating Party may, within thirty (30)
days of receipt of any third party Notice of Arbitration, give fourth party
Notices of Arbitration in order to join any Party or Parties as an Arbitrating
Party or Arbitrating Parties. The third party shall also at the same time send
a copy of any fourth party Notice of Arbitration to all other Parties and to
the [**].

 

(d)           Parties may be joined as further additional Arbitrating Parties by any
Arbitrating Party or Arbitrating Parties until such time as thirty (30) days
have elapsed without a new Arbitrating Party being joined into the arbitration.

 

(e)           The [**], Digimarc, any [**], and any [**], whether or not joined as a
Respondent or as a further additional Arbitrating Party, shall each have the
right to intervene in any arbitration by giving a Notice of Arbitration to each
of the Arbitrating Parties within thirty (30) days after receipt of the copy of
a Notice of Arbitration from the last Arbitrating Party to be joined or from
the last Party to intervene. The [**], Digimarc, any [**], and any [**] shall
also at the same time send a copy of the Notice of Arbitration to the [**] and
to all other Parties.

 

(f)            The arbitral tribunal, once constituted and after affording the
Arbitrating Parties and all other Parties a reasonable period of time in which
to comment, shall have the authority to require by an order that any Party or
Parties which is not or are not an Arbitrating Party or Arbitrating Parties
shall nonetheless be joined into the arbitration as an Arbitrating Party or
Arbitrating Parties should the arbitral tribunal determine that: (a) the
absence of said Party or Parties from the pending arbitration would prevent the
according of complete relief in regard to the Claims of the Arbitrating
Parties; or (b) that the Party or Parties has or have a real and
significant interest in the Agreement or Agreements out of or in connection
with which the Disputes involved in the pending arbitration have arisen and
that the absence of said Party or Parties would significantly impede its or
their ability to protect that interest. Any such order issued by the arbitral
tribunal shall be final and binding upon the Parties.

 

(g)           Any Arbitrating Party may join into a pending arbitration any Dispute
which presents issues of law or fact common with those in the Dispute or
Disputes already in the pending arbitration by issuing, within 30 days of its
receipt of a Notice of Arbitration, a Notice of Arbitration and a statement of
claim which specify, inter alia, the
Agreement or 

 

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

 

 

Agreements involved in the Dispute and sets out the issues of law or
fact it alleges are common with those in the Dispute or those Disputes already
in the pending arbitration.

 

(h)           The arbitral tribunal shall determine by an order, which shall be final
and binding upon the Parties, any issue raised by an Arbitrating Party as to
whether or not a Dispute joined into any pending arbitration did, in fact, at
the time it was joined into the arbitration, present issues of law or fact
common with those presented in other Disputes in the pending arbitration. Any
Dispute which is found not to have presented common issues of law or fact shall
be dismissed without prejudice from the pending arbitration.

 

(i)            Joinder of any Party or Parties or of any Dispute or Disputes to any
arbitration pursuant to this Arbitration Agreement shall be permitted only when
made in accordance with the provisions of this Arbitration Agreement,
including, without limitation, the strict time limits and no joinder or
Intervention other than those provided for shall be permitted.

 

(j)            Any multi-party arbitration arising as a result of there being more than
two Arbitrating Parties will be conducted as a single arbitration involving all
Arbitrating Parties.

 

(k)           Any Arbitrating Party giving any Notice of Arbitration or sending any
copy of a Notice of Arbitration shall send to each recipient according to the
provisions set out above a full copy of the document by international courier or other appropriate means of ensuring rapid
and certain delivery and, when required to send documents to several
recipients, the Arbitrating Party shall send all documents on the same day.

 

(l)            Any advances deemed necessary to cover the costs of any arbitration
shall be made in equal shares by all Arbitrating Parties, provided that
multiple Claimants or multiple Respondents shall be deemed to constitute one
Arbitrating Party for purposes of this subparagraph only, and provided further
that should any Arbitrating Party fail to advance its share (a “Defaulting
Arbitrating Party”), it shall be the responsibility of the Arbitrating Party
which gave the Notice of Arbitration against the Defaulting Arbitrating Party
or Defaulting Arbitrating Parties to advance the share due from the Defaulting
Arbitrating Party or Defaulting Arbitrating Parties. Any Claim brought by a
Defaulting Arbitrating Party shall be dismissed without prejudice. However, the
recipient of any Notice of Arbitration given by a Defaulting Arbitrating Party
shall continue to be an Arbitrating Party if it has itself given any Notice of
Arbitration, unless it withdraws any such Notice of Arbitration. Should any
Defaulting Arbitrating Party commence arbitration in order to reassert any
Claim which has been dismissed pursuant to this subparagraph, that Claim shall
be deemed to be connected to the pending arbitration from which it was
dismissed for the purposes of Article [**] of the [**] Arbitration Act,
1986 and the Defaulting Arbitrating Party shall be required to cover the costs
of the arbitration as though its Claim had not been dismissed.

 

9.             If any Dispute arises whilst an arbitration is pending
in accordance with the provisions of this Arbitration Agreement, but one or
more of the Arbitrating Parties to that Dispute cannot be joined to the pending
arbitration in accordance with the provisions of Article 8 of this
Arbitration 

 

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

 

 

Agreement, the Dispute and
the Arbitrating Parties thereto shall nonetheless be joined into the pending
arbitration at the request of a Party which is an Arbitrating Party in both the
pending arbitration and the Dispute which has arisen so that the Disputes may
be resolved in the same arbitration, provided the arbitral tribunal decides
that the later Dispute presents issues of law or fact common with those in the
pending arbitration and that joinder under these circumstances would not result
in undue delay for the pending arbitration.

 

10.           Each Party agrees that neither an arbitral tribunal
established pursuant to this Arbitration Agreement nor the Parties shall be
authorised to take or seek from any arbitral tribunal or judicial authority any
interim measure or any pre-award relief against the [**], any provision of the
[**] Rules notwithstanding. Nothing in this Arbitration Agreement shall
operate or be regarded as a waiver, renunciation or other modification of the
[**], of whatever nature and wherever situated, under international convention
or under any applicable law. Except as otherwise provided in this Article 10
with regard to the [**], each Party irrevocably agrees that, to the extent that
it or any of its [**], from any legal proceedings, whether in [**] or
elsewhere, to enforce or collect upon any obligation of that Party in
connection with the transaction contemplated under any Agreement, including,
without limitation, [**] prior to the rendering of an arbitral award under this
Arbitration Agreement or entry of judgment, it [**].

 

11. (a)     Any Dispute, regardless of the number of Arbitrating Parties, shall be
submitted to an arbitral tribunal of three (3) arbitrators appointed by
the Appointing Authority.

 

(b)           The arbitral tribunal shall be appointed by the Appointing Authority
once the time has terminated during which any Party is entitled to give a
Notice of Arbitration to join any other Party or the [**], Digimarc, any [**]
or any [**] is entitled to intervene.

 

(c)           The presiding arbitrator of the arbitral tribunal shall be a British
national and shall have been admitted to practice as a barrister or solicitor
in England and shall also have significant expertise in the resolution of disputes
in [**] commercial matters. All arbitrators shall have a full [**].

 

(d)           The arbitrators appointed in accordance with this Arbitration Agreement
shall be remunerated in accordance with the provisions of the Rules of the
[**] in effect at the time [**].

 

12.           Awards shall be final and binding as from the date the
awards are made. The Parties undertake to carry out all awards without delay
and waive their right to any form of appeal or recourse to a court of law or
other judicial authority, insofar as any such waiver may validly be made. All
awards may if necessary be enforced by any court having jurisdiction in the
same manner as the judgment of any such court.

 

13.           Each Party explicitly agrees hereby that it shall
recognise any arbitral award rendered in an arbitration under this Arbitration
Agreement as final and binding upon it unless a competent arbitral tribunal or
a competent judicial authority determines that said Party never received notice
of the pendency of the arbitration in which the award was rendered.

 

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14.           Any arbitral award rendered under this Arbitration
Agreement shall be accorded res judicata
effect by any arbitral tribunal appointed under this Arbitration Agreement in
regard to those Parties which are bound by an award pursuant to Article 13.

 

15.           The obligations of the Parties to the Agreements shall
not be altered or suspended by reason of any arbitration being conducted during
the life of any Agreement.

 

16.           Any Agreement in regard to which a Dispute has arisen
shall be governed by the applicable law as specified in that Agreement.

 

17.           This Arbitration Agreement shall bind and inure to the
benefit of the respective successors and permitted assigns of the Parties,
subject to all Parties respecting Articles 6 and 7 hereto.

 

18.           This Arbitration Agreement may be executed in several
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same agreement.

 

19.           Any provision of this Arbitration Agreement which is
invalid or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such invalidity or unenforceability, without
invalidating the remaining provisions of this Agreement or affecting the
validity or enforceability of such provision in any other jurisdiction.

 

20.           This Arbitration Agreement shall enter into full force
and effect on the date first written above and shall continue in full force and
effect indefinitely, unless it is terminated by mutual written consent of all
of the Parties.

 

21.           This Arbitration Agreement shall be governed by and
construed in all respects in accordance with the laws of England, to the
exclusion of its rules of conflicts of law.

 

                The
Parties have caused this Arbitration Agreement to be executed in multiple
copies, with effect from January 1, [**].

 

[Signatures]

 

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Schedule
A to Arbitration Agreement

 

The
following, together with their assigns or successors are Parties to the
Arbitration Agreement. Each Party has the obligation to advise every other
Party of any change in address and each Party expressly agrees that any notice
delivered to that Party at the listed address or to any duly notified change of
address shall be deemed to be valid notice and that any notice shall be deemed
to have been received on the day it is so delivered:

 

[**],

Digimarc,

[**]

 

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Schedule B to Arbitration Agreement

 

The following
are considered to be Agreements:

 

1.               Development and License Agreement

2.               [**] Agreement

3.               Escrow Agreement

4.               [**] License Agreements – [**]

5.               [**] License Agreements – [**]

6.               [**] License Agreements – [**]

7.               [**] License Agreements – [**]

8.               System Support Services Agreements

9.               [**] Agreement

 

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Schedule C
to Arbitration Agreement

 

In accordance
with Article 1.1 of the [**] Rules, in addition to such other
modifications of the [**] Rules as are contained in this Arbitration
Agreement, the Parties to this Arbitration Agreement and to the Agreements
modify the [**] Rules as follows:

 

(a)                                           Notwithstanding
Article [**] Rules, a Notice of Arbitration may be given by any
Arbitrating Party to any Party or Parties so as to join said Party or Parties
into any pending arbitration and this Arbitration Agreement shall allow for
multi-party arbitration involving third parties, fourth parties and any further
additional parties.

 

(b)                                          Notwithstanding
Article [**] Rules, arbitral proceedings under this Arbitration Agreement
shall be deemed to commence on the date on which the Claimant’s Notice of
Arbitration is received by the [**].

 

(c)                                           Notwithstanding
Article [**] of the [**] Rules, the Notice of Arbitration shall not
contain a proposal as to the number or appointment or the notification of the
appointment of arbitrators (and, if made, any such proposal shall be disregarded).

 

(d)                                          Notwithstanding
Article [**] Rules, any Arbitrating Party must make any counter-claim or
claim for the purpose of set-off in its statement of defence and not at a later
stage of the arbitral proceedings.

 

(e)                                           Notwithstanding
Article [**] Rules, the arbitral tribunal shall, in considering whether it
is appropriate to allow a party to amend or supplement a written communication
(given the interests of economy, efficiency and the desire to avoid the risk of
inconsistent awards), have particular regard to the multi-party nature of any
arbitration proceeding, the consequences in terms of delay and the objective of
resolving related Claims in a single arbitration involving all relevant
Parties.

 

(f)                                             Notwithstanding
Article [**] Rules, in considering whether an extension of a time-limit
for the communication of written statements is justified, the arbitral tribunal
shall have particular regard to the multi-party nature of any arbitration
proceeding and the consequences in terms of delay.

 

(g)                                          Notwithstanding
Article [**] Rules, no interim measures shall be sought or applied against
the [**] in connection with any Dispute by either an arbitral tribunal
established pursuant to this Arbitration Agreement or any judicial authority.

 

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Schedule D
to Arbitration Agreement

 

Standard
language to be inserted in each Agreement.

 

“[Article No:
and heading (e.g., Settlement of Disputes), if applicable]

 

Any Dispute (as defined in the Arbitration
Agreement) shall be finally settled by arbitration in accordance with the
Arbitration Agreement as amended from time to time.

 

“[Article No:
and heading (e.g., Governing Law), if applicable]

 

This [Agreement] shall be governed by and construed
in all respects in accordance with the laws of [INSERT], to the exclusion of
[INSERT]’s rules of conflicts of law.”

 

[E – Arbitration Agreement]

 

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SCHEDULE “F”

 

OTHER [**] TECHNOLOGY

 

1.             Techniques for [**].

 

2.             Copyright in the [**].

 

3.             The above technology is partially described in the
following UK patent applications:

 

UK
Patent Application Nos:              [**]

 

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SCHEDULE “G”

 

DIGIMARC TECHNOLOGY

 

The Digimarc Technology includes
[**].

 

This technology is partially
described in the following issued U.S. patents:

 

[**]

 

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SCHEDULE “H”

 

PROJECT TECHNOLOGY

 

The
Project Technology shall include:

 

1.                                       The modification of techniques for using the
Digimarc and [**] Technologies in the [**].

 

2.                                       The effects and behaviours of [**] when used in
[**].

 

3.                                       The effects of various types [**].

 

4.                                       Improvements to Digimarc’s testing and
certification processes used in testing and certifying [**].

 

5.                                       The improvement of [**].

 

6.                                       The use of [**].

 

7.                                       Detailed techniques [**]

 

8.                                       [**]

 

9.                                       Intellectual Property Rights that: a) [**] under Section 8 of
this Agreement; b) were developed by or on behalf of Digimarc under this
Agreement; and c) were developed by or on behalf of Digimarc after 1 January [**].

 

10.                                 Examples of Project Technology include the
following:

 

[**]

 

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SCHEDULE
“I”

 

ALLOWABLE
COSTS

 

1.                                       For the purposes of this Schedule I:

 

	
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SCHEDULE “J”

 

SECURITY REQUIREMENTS

 

1.             Digimarc shall implement the “Security Measures”
normally followed by a [**] and distributor comparable to Digimarc in number of
employees and revenue engaged in the development and distribution of [**] and
maintain such Security Measures in effect at all times throughout the
Term.  The Security Measures will include
but not be limited to :

 

1.1           Electronic security for protection of the network and
protection of the CDS software products that are under development.

 

(a)           Network protection which will ensure
that unauthorized users will not get access to design information, sensitive
test data, proprietary information, released software products or software
documentation that is hosted on the network. This protection will include:

 

(i)            erecting barriers
to prevent hackers, whether inside or outside the Digimarc facility, from
accessing the secure network; and

 

(ii)           the customizing of
developmental and operational procedures for the software development team that
maximize security while not impeding the team’s ability to work efficiently and
effectively.

 

1.2           Physical Security, including the following:

 

(a)           the Digimarc facility at which the
Work will be performed will be secure from unauthorized visitors;

 

(b)           the software development laboratory
and the computer network employed in the Work shall be secure;

 

(c)           all 
personnel authorized to have access to sensitive CDS information, data
and designs including but not limited to the employees of authorised
Subcontractors will be properly screened; and

 

(d)           production and handling of interim
and final versions of the Deliverables will be carefully controlled, monitored
and audited.

 

2.             Within sixty (60) days after the Agreement is last
signed,[**] shall conduct an audit, at its own expense, of the Security
Measures.

 

3.             Following the audit, the DLA Project Manager shall
submit  a “Security Plan” to Digimarc
which will prescribe the actions which Digimarc must take, if any, to improve
the 

 

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Security Measures to be followed
by Digimarc until the end of Phase 3 and the dates by which Digimarc shall take
them.

 

4.             Within twenty (20) Business Days after receipt of the
Security Plan, Digimarc shall notify the DLA Project Manager of the cost to
implement the Plan. Within ten (10) Business Days after receipt of the
notice, the DLA Project Manager shall notify Digimarc which aspects of the
Security Plan to implement and Digimarc shall implement them in accordance with
the Plan.

 

5.             Any cost incurred providing security required by the
Security Plan, beyond what is reasonable and customary for a similarly-situated
[**]company in the Portland area, will be an Allowable Cost and compensated by [**] accordingly.  Digimarc has budgeted[**].  Costs required in excess of this amount may
require an adjustment to the [**] and/or Statement of Work.

 

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SCHEDULE”K-1”

 

[**]
LICENSE AGREEMENT - [**]

 

This [**]LICENSE AGREEMENT
(the “Agreement”) is made

 

BETWEEN

 

<<[**]
and Address>> (“[**]”)

 

- AND
-

 

DIGIMARC
CORPORATION, a corporation
incorporated under the laws of Delaware and having its head office at 9405 SW
Gemini Drive, Beaverton, Oregon. U.S.A. 
97008 (“Digimarc”)

 

[**]

 

Digimarc has
expertise in, and owns extensive intellectual property, including patents,
patent applications, copyrights and trade secrets related to digital
watermarks, [**], copyright protection, and device control (the  ̈Digimarc IPR”);

 

[**] possesses
or will possess intellectual property rights related to the application of such
intellectual property [**];

 

Digimarc and
[**] have cooperated in the development of means, using such intellectual
property, [**];

 

[**] desires
to obtain a license to certain components of the [**] so it can [**].

 

In
consideration of these premises, the
covenants set out in this Agreement and other good and valuable consideration,
the receipt and adequacy of which are acknowledged by each of the parties, the
parties agree as follows:

 

I.              DEFINITIONS  AND PRINCIPLES OF INTERPRETATION

 

1.1           Definitions

 

“Agreement” means these articles of agreement, including the Attachments, and those
documents as specified or referenced in this Agreement as forming part of the
Agreement, all as may be amended from time to time;

 

“Arbitration Agreement” means the Arbitration Agreement entered into between the parties
and others and effective 1 January [**], as amended from time to time;

 

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“Attachment” means a document specified as being attached to this Agreement;

 

[**]

 

“Business Day” means a day that both Digimarc and [**] are open for business at
their respective addresses noted above;

 

“Confidential Information” means information disclosed before or during the Term of this
Agreement in any form which, if disclosed in tangible form, is or was labeled “Confidential”,
“Proprietary” or with a similar legend, or if disclosed orally, is or was
information that by its nature would be understood to be confidential to the
Discloser.  For greater certainty, the
Confidential Information of Digimarc includes the Digimarc IPR and the [**];

 

[**]

 

“Digimarc IPR” means Intellectual Property Rights owned by Digimarc, now or during
the Term of this Agreement, to the extent that same specifically relates to or
forms part of [**];

 

“Digital [**]” refers to [**] (including [**]) that are [**] from [**] by [**] of
[**], which [**] of [**] and yet do not significantly [**]from the aesthetics
of the [**] or [**] thereby. Examples include:

 

1.                                       generally imperceptible changes to [**] or placement in [**];

2.                                       [**] of a substrate, where the [**] substantially uniform to human
touch;

3.                                       slight localized changes to [**] or [**] of a printed document;

4.                                       slight changes to [**]; or

5.                                       [**] of substantially [**].

 

“Discloser” means a party which has disclosed or otherwise made available its
Confidential Information to the other party;

 

“DLA Contract Authority” means the individual appointed as such under the [**] License;

 

[**]

 

“Effective Date” means the date on which this Agreement is last signed by the
parties;

 

[**]

 

“Field of Use” means the field of[**]

 

“Improvement” means an improvement provided to [**] under clause 2.14 of the [**]
License;

 

“Intellectual Property Rights” or “IPR” means all intellectual
property rights existing now and in the future including, without limitation,
trade secrets, copyright, database rights, know-how, topographies, patents and
patent applications;

 

[**]

 

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[**]

 

“[**] License” means Schedule L-1 to the [**] License;

 

[**]

 

“Recipient” means a party to which the Confidential Information of the other
party has been disclosed or otherwise made available;

 

“Services” means the Verification Tests and any other service performed by
Digimarc under this Agreement;

 

“Term” means the period commencing on the Effective Date and ending on the
earlier of 31 December [**] or the date of termination of this
Agreement; and

 

“Verification Test” means a test or tests developed under the [**] License  to determine [**]

 

1.2           Interpretation
- In this Agreement:

 

1.2.1        unless
otherwise specified, all references to money amounts are to the currency of the
United States of America;

 

1.2.2        the
use of words in the singular or plural, or with a particular gender, shall not
limit the scope or exclude the application of any provision of this Agreement
to such person or persons or circumstances as the context otherwise permits;

 

1.2.3        whenever
a provision of this Agreement requires an approval or consent by a party to
this Agreement and notice of such approval or consent is not delivered within
the applicable time, then the party shall be conclusively deemed to have
withheld the consent or approval;

 

1.2.4        unless
otherwise specified, the number of days within or following which any payment
is to be made or act is to be done shall be interpreted to be continuous and
shall be calculated by excluding the day on which the period commences and
including the day which ends the period and by extending the period to the next
Business Day if the last day of the period is not a Business Day;

 

1.2.5        unless
otherwise specified, the order of precedence for interpreting this Agreement
shall be:

 

(a)                                  this Agreement, excluding Attachments, and

 

(b)                                 the Attachments;

 

1.2.6        for
greater certainty, a party or representative to which this Agreement grants the
right to make a decision or determination in the sole discretion of the party
or representative is not required to act reasonably in making the decision or
determination and no such decision or 

 

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determination may be challenged by the other
party under the Arbitration Agreement or otherwise;

 

1.2.7        the
words “includes” or “including” will be construed as meaning “included without
limitation” and “including without limitation” as the case may be; and

 

1.2.8        a
clause or Attachment, unless the context requires otherwise, is a reference to
a clause to, an Attachment of, or a paragraph of an Attachment to, this
Agreement, as amended from time to time in accordance with this Agreement.

 

1.3           Applicable
Law - This Agreement shall be construed in accordance with the laws of England
to the exclusion of its rules of conflicts of laws.

 

1.4           Attachments
- The attachments to this Agreement, listed below, are an integral part of this
Agreement:

 

	
   

  	
   

  	
  Attachment

  	
   

  	
  Description

  
	
   

  	
   

  	
  Attachment “1”

  	
   

  	
  [**]

  
	
   

  	
   

  	
  Attachment “2”

  	
   

  	
  Problem Report

  
	
   

  	
   

  	
  Attachment “3”

  	
   

  	
  Payment for Services

  
	
   

  	
   

  	
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  [**]

  
	
   

  	
   

  	
  Attachment “5”

  	
   

  	
  [**]

  

 

2.             GRANT
OF RIGHTS  AND SERVICES

 

2.1           Subject
to the terms of this Agreement, Digimarc hereby grants to [**], a [**]license
under the Digimarc IPR and the [**] IPR, in the Field of Use only, [**]

 

2.2           [**]
acknowledges and agrees that the Digimarc IPR, and any technology developed by
Digimarc during the course of its forthcoming and prior work with [**], is the
property of Digimarc and that [**] has no right to sublicense it. [**]
acknowledges that a [**] may not [**]

 

2.3           [**]
acknowledges and agrees that the [**] IPR is the property of its owner and that
[**] has no right to sublicense it.

 

2.4           Nothing
in this Agreement shall be construed to grant, by implication or otherwise, any
broader rights than those specifically granted herein.

 

2.5           Commencing
no later than ten (10) Business Days after every written request made
during the Term by [**], Digimarc shall make an irrevocable offer, which offer
shall remain open for acceptance within sixty (60) days of receipt [**]

 

2.6           Commencing
no later than twenty (20) Business Days after every written request made by
[**] during the Term, Digimarc shall conduct Verification Tests of specified
[**] on a date or dates agreed between Digimarc and [**] for the charges
specified in clause 3.

 

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2.7           Digimarc
shall obtain at its own expense all licenses or permits required to be obtained
from the Government of the United States in order for Digimarc to comply with
its obligations under this Agreement including, without limitation, to deliver
the [**], and grant the foregoing license to [**].

 

3.             SERVICE
FEES

 

3.1           [**]
shall pay to Digimarc a fee for the 
Services as detailed below.  The
fee for Services provided pursuant to any prior agreements between the parties
referenced herein shall be as set forth therein.  Otherwise, the fee for Services provided:

 

(a)                                  on or before 31 December [**], is as set out in Attachment 3;

 

(b)                                 after 31 December [**], will be no greater than the fee then
paid to Digimarc for similar services by Digimarc’s most favoured customer.

 

3.2           Shipments
of [**], [**] and related documentation shall be by air, Cost, Insurance &
Freight (C.I.F.) closest major airport (i.e., Digimarc shall be responsible for
transportation and insurance to this port of entry).  Except as otherwise expressly provided in
this Agreement, [**] shall pay Digimarc all sales, use, goods and services or
other similar taxes levied by any government in the United States or the [**]
principal place of business which Digimarc is obliged to collect and remit to
[**] in connection with any amount paid by [**] to Digimarc under this
Agreement.

 

3.3           Digimarc
is responsible for, and shall indemnify [**] against, and hold [**] harmless
from, the payment of all taxes levied by any government on or in respect of
Digimarc’s income and any amounts required by law to be paid in respect of
social benefits for Digimarc’s employees relating to or arising out of the
performance of the Services. If required by law, [**] shall deduct all such
taxes and amounts from the amounts otherwise payable to Digimarc and remit them
to the appropriate authorities.

 

4.             NUMBER NOT
USED

 

5.             [**]
RESPONSIBILITIES

 

5.1           [**]
shall make every reasonable effort, including obtaining a legally binding
commitment from all [**], to ensure that the [**] do not use [**] or the
Digimarc IPR, or permit or suffer the [**] or the Digimarc IPR to be used, for
any purpose other than [**].

 

5.2           If
[**] learns, or has reasonable cause to believe, that any [**]has used, or
permitted or suffered to be used, or proposes to use or permit or suffer to be
used, [**] or the Digimarc IPR except as expressly authorised herein, [**]
shall immediately notify Digimarc and the DLA Contract Authority, and [**]
shall use all reasonable efforts, at its own expense,  to prevent any further such use including
exercising whatever legal remedies (including, without limitation, an 

 

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application for injunctive relief) are
available to [**].  [**] shall,
immediately on notice by Digimarc, assign to Digimarc any right of action which
[**] may have to prevent any further such use. Following such assignment, [**]
shall cooperate with Digimarc to achieve the successful prosecution, or, if
elected by Digimarc, settlement, of any such action.

 

5.3           [**]
shall promptly report to Digimarc every instance which comes to its attention
of:

 

(i)                                     a failure of the [**] to meet the specifications established under
the [**] Agreement in the form of the Problem Report attached as Attachment 2;
or

 

(ii)                                  unauthorised access to the [**] in the possession of a [**]; or

 

(iii)                               failure of any [**] or [**] provided by Digimarc to [**] in response
to the attempted [**].

 

5.4           [**]
shall inform Digimarc within thirty (30) days after the end of each calendar
quarter during the Term  of all  improvements 
relating to (i) [**]; (ii) [**]; (iii) [**];  (iv) any other part of the [**] has
made, or caused or permitted to be made, as a result of access to and use of
the Digimarc Confidential Information. The first such information shall be
provided to Digimarc within thirty (30) days after the first calendar quarter
following said access, and shall cover improvements made from the date the [**]
first learned of the Digimarc Confidential Information.  Following the provision of the information
under this clause 5.4, [**] shall provide to Digimarc within a reasonable period
of time following request, the Technical Information for those improvements
requested by Digimarc in writing.

 

5.5           [**]
hereby grants to Digimarc a royalty-free, non-exclusive, sub-licensable,
worldwide license to use the improvements described in clause 5.4 and in any
patents thereon owned or otherwise licenseable by [**].

 

5.6           Such
license shall continue until this Agreement expires or is terminated, or until
[**] has no further rights to Digimarc IPR, whichever occurs last.

 

5.7           For
greater certainty, the obligations set out in clauses 5.4, 5.5 and 5.6 shall
not apply to any such improvement which the [**] can demonstrate would have
been made irrespective of access to the Digimarc Confidential Information.

 

5.8                                 [**] (or Digimarc if [**] so designates), shall conduct Verification
Tests on representative [**].  A report
detailing the results of the Tests shall be prepared and promptly provided to
[**].

 

5.9           If
[**] designates Digimarc to conduct the tests:

 

(i)                                     on or before December 31, [**], [**] shall pay Digimarc the
fees set out in  Attachment 3;

 

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(ii)                                  after December 31, [**], 
[**] shall pay Digimarc the fees then paid to Digimarc for similar
services by Digimarc’s most favoured customer.

 

5.10         In
the event that said Tests do not indicate, to [**] satisfaction, that [**]
standards detailed in the Verification Tests, [**] will require the [**] to
immediately take whatever corrective action(s) [**] considers appropriate.

 

5.11         [**]
shall advise Digimarc in writing in advance of any changes which [**] may, at
its sole discretion, make from time to time to the information set forth in
Attachments 4 and 5.

 

6.             CONFIDENTIALITY

 

6.1           Except
as otherwise expressly permitted by this Agreement, a Recipient shall not
use,  reproduce or disclose the
Confidential Information of the Discloser for any  purpose other than as reasonably necessary to
comply with its obligations  under this
Agreement or to exercise any rights or licenses granted to it under or pursuant
to this Agreement.

 

6.2           The
Recipient shall protect the Confidential Information of the Discloser from

 

disclosure by using the same degree of care,
which shall be no  less than a reasonable
degree of care, as the Recipient uses to protect its own confidential  information.

 

6.3           On
written request from the Discloser, the Recipient shall return, or certify the
destruction of, all originals and copies of the Discloser’s Confidential
Information in the Recipient’s possession or control which the Recipient does
not need to retain in order to perform any obligations imposed, or exercise any
rights acquired, by this Agreement.

 

6.4           A
Recipient may, on a need to know basis, and only for the purposes  described in clause 6.1, give the other
party’s Confidential Information to the Recipient’s employees or  authorized subcontractors provided that such
employee or subcontractor shall have entered into a non-disclosure agreement in
respect of such Confidential Information in favour of the Discloser on terms materially
similar to the provisions of this clause 6.

 

6.5           The
obligations set out in this clause 6 will not apply to any Confidential
Information that:

 

(a)                                  is or becomes publicly available other than through the fault of the
Recipient;

 

(b)                                 was known to the Recipient prior to disclosure as shown by
documentation sufficient to establish such knowledge;

 

(c)                                  was or is lawfully disclosed to the 
Recipient by a third party who did not breach any obligation of
confidence by such disclosure and who made the disclosure without restriction
on further disclosure all of which is shown by documentation sufficient to
establish same; or

 

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

 

 

(d)                                 is required by law to be disclosed 
provided, however, that the Recipient shall first give written notice to
the Discloser before the disclosure so that the Discloser may seek an
appropriate protective order.

 

Notwithstanding the foregoing, the fact that
Confidential Information, or any part thereof, can be linked together by a
search of publications and other information, followed by a selection of a
series of such items of knowledge from unconnected sources, and fitting
together those items of knowledge so as to duplicate or recreate any item of
Confidential Information, shall not be deemed to cause the Confidential
Information, or any part thereof, to be included within exceptions (a), (b) or
(c), above.

 

6.6                                 [**] shall not make any disclosure of Digimarc Confidential
Information to [**] which is not licensed by Digimarc, except as expressly and
previously authorized in writing by Digimarc. 
Disclosure to [**] shall only be made if and to the extent reasonably necessary
for [**] to fulfill its obligations to [**].

 

6.7                                 The obligations of the parties under this clause 6 will survive the
Term or sooner termination of this Agreement and will remain in full force and
effect regardless of the cause of any termination.

 

6.8                                 Nothing in this Agreement shall be construed to require [**] to
disclose any information which is confidential to a third party including for
greater certainty [**].

 

7.                                      INTELLECTUAL PROPERTY INDEMNIFICATION

 

7.1                                 [**] shall provide Digimarc with prompt written notice of any claim,
demand or action against [**] based on an allegation that the  Digimarc IPR or any part thereof, infringes
any Intellectual Property Right of any person (referred to below as a “Claim”).

 

7.2                                 Subject to the limitations set out in clauses 7.3 to 7.6 inclusive,
Digimarc shall, at its own expense:

 

(a)                                  negotiate the resolution of any such Claim;

 

(b)                                 pay all costs associated with the Claim; and

 

(c)                                  defend any action based on the Claim.

 

7.3                                 [**] shall, at Digimarc’s expense, comply with all reasonable
requests by Digimarc for assistance from [**] in connection with the settlement
or defence of the Claim.

 

7.4                                 Notwithstanding any other provision of this Agreement to the
contrary, but subject to the limitations in this clause 7, Digimarc shall
indemnify [**]  against and save [**]
harmless from all loss, costs, liabilities including an award of damages, and
expenses, including legal fees, arising from each Claim first notified to
Digimarc prior to 31 December [**]. 
The obligation set 

 

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out in this clause 7 shall not apply in
respect of any settlement made by [**] without the consent of Digimarc.

 

7.5                                 For the purposes of clauses 7.2 through 7.4 inclusive, “Claim” shall
mean any Claim, other than a Claim for patent infringement which Digimarc can
demonstrate occurred without Digimarc acting recklessly or negligently.

 

7.6                                 The provisions of this Section 7 shall apply to any prior
Agreements between the parties referenced herein as if fully set forth therein.

 

8.                                      REPRESENTATIONS AND WARRANTIES OF DIGIMARC

 

8.1                                 Digimarc represents, warrants and undertakes to [**] that from and
after the Effective Date:

 

(a)          the
Services provided under this Agreement will be of professional quality
conforming to generally accepted practices for like services and will be
performed at all times in a timely and cost effective manner and, for greater
certainty Digimarc shall employ the standard of care in performing the Services  that would be expected of an expert [**] of
the same or similar type as the [**] which comprises the [**];

 

(b)                                 Digimarc is duly incorporated and organized and is validly
subsisting under the laws of the State of Delaware, U.S.A. or some other state
in the United States with full corporate power and authority to enter into this
Agreement;

 

(c)                                  to the best of its knowledge, neither this Agreement nor the
Services will contravene, breach, or result in any default under any agreement,
permit, by-law, or law or regulation to which Digimarc is subject or by which
it is bound including, for greater certainty any laws or regulations in effect
in the United States governing export;

 

(d)                                 this Agreement when executed and delivered by Digimarc shall
constitute a valid and binding agreement with Digimarc enforceable against
Digimarc according to its terms; and

 

(e)                                  Digimarc will at all material times have the right to grant the
licenses to the Digimarc IPR as required by this Agreement.

 

8.2                                 Digimarc represents, warrants and undertakes to [**] that:

 

(a)                                  incorporated as part of its [**];

 

(b)                                 [**] shall contain no lock, clock, timer, counter, copy protection
feature, replication device or intentional defects (including but not limited
to “viruses” or “worms” as such

 

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terms
are commonly used in the computer industry), CPU serial number reference, or
other device which might:

 

(i)                                     lock, disable or erase the [**] or any data which is loaded on the
[**] so as to prevent full use of the [**] by authorized persons; or

 

(ii)                                  require action or intervention by Digimarc or any other person to
allow properly trained and authorized persons to use the [**];

 

(c)          the
source code for the [**] will support the year 2000 and neither performance nor
functionality will be affected by dates prior to, during and after the year
2000, and for greater certainty, the [**] will switch to 1 January 2000 on
1 January 2000, and the year 2000 will be recognized as a leap year.

 

9.                                      REPRESENTATIONS AND WARRANTIES OF [**]

 

9.1                                 [**] represents and warrants to Digimarc that:

 

(a)                                  [**] has full power and authority to enter into this Agreement; and

 

(b)                                 this Agreement when executed and delivered by  [**] shall constitute a valid, binding and
enforceable obligation of  [**].

 

9.2                                 [**] makes no representations, warranties or undertakings that [**]
has any right to grant the licenses required to be granted by clause 5.5 and
Digimarc shall be solely responsible for determining that such improvements are
suitable for the intended use and for the consequences of any use of the same
whether by Digimarc or others, and [**] hereby disclaims all liability in
connection therewith.

 

10.                               TERM AND TERMINATION

 

10.1                           This Agreement will take effect on the Effective Date and will
remain in force throughout the Term unless sooner terminated as provided
herein.

 

10.2                           Either party may terminate this Agreement if the other party
breaches any of its obligations under this Agreement and fails to remedy such
breach within thirty (30) days after receiving written notice of such breach
from the other party.

 

10.3                           Upon termination of this Agreement:

 

(a)                                  all rights granted to [**] under this Agreement will immediately
terminate.  No interest in any such rights
will thereafter remain with [**],except that [**], but no further [**] shall be
permitted; and

 

(b)                                 each party shall return, or certify the destruction of, to the
Discloser, all originals and copies of the 
Discloser’s Confidential Information in the party’s possession or
control 

 

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SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

 

 

which
the party does not need to retain in order to exercise any rights acquired by
this Agreement.

 

10.4                           No termination of this Agreement will in any manner release, or be
construed as releasing, any party from any liability arising out of or in
connection with that party’s breach of or failure to perform any covenant, duty
or obligation contained herein prior to the date of such termination.

 

10.5                           Upon termination of the [**] License by Digimarc for cause, the
rights of the [**] hereunder to use the Digimarc IPR shall be deemed to be
restricted to the [**] as of the date of such termination.

 

11.                               DISPUTE RESOLUTION

 

11.1                           Any Dispute (as defined in the Arbitration Agreement) shall be
finally settled by arbitration in accordance with the Arbitration Agreement.

 

11.2                           Unless otherwise agreed between the parties or unless the subject
matter of the dispute resolution proceedings is a party’s right to terminate
this Agreement, the Services shall continue during the dispute resolution
proceedings and payments due to Digimarc shall not be withheld on account of
such proceedings unless that particular services or payment is the subject matter
of the proceedings.  Notwithstanding the
foregoing, [**] may in its sole discretion instruct Digimarc to continue to
perform services which are the subject matter of the proceedings and Digimarc
shall act in accordance with those instructions, subject to payment under
clause 3.1.

 

12.                               MISCELLANEOUS PROVISIONS

 

12.1                           Remedies Cumulative - Except as otherwise expressly set out in this
Agreement:

 

(a)                                  each and every right, power and remedy of a party will be considered
to be cumulative with and in addition to any other right, power and remedy
which such party may have at law or in equity in the event of breach of any of
the terms of this Agreement;

 

(b)                                 the exercise or partial exercise of any right, power or remedy will
neither constitute the exclusive election thereof nor the waiver of any other
right, power or remedy available to such party; and

 

(c)          a party
terminating this Agreement in accordance with the provisions of the Termination
clause will have no liability or obligation to the other as a result of or with
respect to the termination.

 

12.2                           Notices.   All notices under this Agreement shall be
delivered by fax or recognized [**] courier service.  The notice shall be deemed effective as of
the date of delivery to the address of the party specified below, as evidenced
by a delivery receipt or the addressee’s registry of incoming
correspondence.  Unless otherwise
expressly set out in this 

 

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Agreement,
all notices to a party will be sent to the party’s authorized representative
identified below and all notices from a party will be sent by the party’s
authorized representative identified below.

 

12.3                           Any notice to [**] shall be sent to both of, and any notice from
[**] shall be sent by either:

 

	
  Name 1

  	
  Name 2

  
	
  Address 1

  	
  Address 2

  

 

12.4                           Any notice to Digimarc shall be sent to both of, and any notice from
Digimarc shall be sent by either:

 

	
  Mr. Robert Chamness

  	
  Mr. Scott Carr

  
	
  Vice President and General Counsel

  	
  President, Digimarc [**]

  
	
  Digimarc Corporation

  	
  Digimarc Corporation

  
	
  9405 SW Gemini Drive

  	
  9405 SW Gemini Drive

  
	
  Beaverton, OR 97008

  	
  Beaverton, OR 97008

  
	
  Fax: (503) 469-4777

  	
  Fax: (503) 469-4777

  

 

12.5                           A copy of every notice sent by either party shall be sent to: [**].

 

12.6                           A party may change its address for notice by notice to the other
party in accordance with the foregoing provisions.

 

12.7                           Severability.   If any part of this Agreement is held by an
arbitral tribunal appointed pursuant to the Arbitration Agreement or other
competent authority to be void or unenforceable, the parties agree that such
determination will not result in the nullity or unenforceability of the
remaining parts of this Agreement, which will continue in force to the fullest
extent permitted by law. The parties further agree to replace such void or
unenforceable part of this Agreement with a valid and enforceable provision
that will achieve, to the extent legally permissible, the economic, business
and other purposes of the void or unenforceable part.

 

12.8                           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.

 

12.9                           Entire Agreement.  With the exception of any prior agreements
between the parties referenced herein, this Agreement is intended by the
parties to be the final expression of their agreement and constitutes and
embodies the entire agreement and understanding between the parties hereto and
constitutes a complete and exclusive statement of the terms and conditions
thereof, and will supersede any and all prior correspondence, conversations,
negotiations, agreements or understandings relating to the same subject
matter.  In case of a conflict of any 

 

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prior agreements between the parties
referenced herein and this Agreement, the latter shall control.

 

12.10                     Amendments.    No change in, modification of or
addition to the terms and conditions contained herein will be valid as between
the parties unless set forth in a writing that is signed by an authorized
representative of each of the parties and which specifically states that it
constitutes an amendment to this Agreement.

 

12.11                     Waiver.   No waiver of any term, provision, or condition of this Agreement
will be effective unless in a written document signed by the waiving party and
no such waiver in any one or more instances, will be deemed to be, or be
construed as, a further or continuing waiver of that term, provision or
condition or any other term, provision or condition of this Agreement.

 

12.12                     Assignment and Successors.    This Agreement may not be
assigned by [**] without Digimarc’s consent, which consent shall not be
unreasonably withheld or delayed. This Agreement and all of its terms,
conditions and covenants are intended to be fully effective and binding, to the
extent permitted by law, on the successors and permitted assigns of the parties
hereto.

 

12.13                     Captions.   Captions are provided in this Agreement for
convenience only and they form no part, and are not to serve as a basis for
interpretation or construction, of this Agreement, nor as evidence of the
intention of the parties hereto.

 

12.14                     Disclaimer of Agency.   Nothing contained in this Agreement is
intended or will be construed so as to constitute the parties to this Agreement
as partners or joint venturers or as agents of each other. Neither party will
have any express or implied right or authority to assume or create any
obligations on behalf of or in the name of any other party or to bind any other
party in any contract, agreement or undertaking with any third party.  No employee of a party shall be deemed or
considered to be an employee of the other party or of both parties.

 

12.15                     Publicity.  
The parties agree that from time-to-time it
will be beneficial to both parties to issue [**] and [**] from the [**]. Each
party agrees to submit for approval by the other party any [**] that involves
the other party, which approval shall not unreasonably be withheld.

 

12.16                     Effectiveness. 
This Agreement shall not be effective until
it is signed by both of the parties.

 

12.17                     Ambiguities.  
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 shall not apply in interpreting this Agreement.

 

12.18                     Survival.   
All clauses of this Agreement which
expressly or by implication are intended to survive the termination of this
Agreement will do so and, for greater certainty and notwithstanding any
provision in this Agreement to the contrary, the provisions of clauses 3.2, 

 

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3.3, 5.1, 5.2, 5.5, 5.6, 6, 7,11, and 12 of
this Agreement shall survive termination of this Agreement by either party for
any reason.

 

IN WITNESS WHEREOF, this Agreement has been executed and delivered by the parties
hereto as of the Effective Date.

 

	
  DIGIMARC CORPORATION

  	
   

  	
  << [**]>>

  
	
  By:

  	
   

  	
   

  	
  By:

  	
   

  
	
  Name:

  	
   

  	
   

  	
  Name:

  	
   

  
	
  Title:

  	
   

  	
   

  	
  Title:

  	
   

  
	
  Date:

  	
   

  	
   

  	
  Date:

  	
   

  

 

** CONFIDENTIAL PORTION OMITTED AND FILED
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ATTACHMENT
1

 

[**]

 

[**] will cause the following [**] to take place:

 

(a)           [**]

 

(b)           [**]

 

(c)           [**]

 

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ATTACHMENT
2

 

PROBLEM
REPORT

 

Each problem
report will contain all information necessary to reproduce or demonstrate the
occurrence of the problem.  Problem
reports will [**] and will be delivered electronically in a format to be
provided by Digimarc.

 

Problem reports will contain:

 

·                  Date problem was encountered

·                  Detailed description of the problem, including the frequency with
which the problem occurs

·                  Name and [**] the
problem

·                  Step by step
instructions to reproduce the problem

·                  All data files
required to reproduce the problem

·                  [**]

·                  Severity of
problem

·                  Contact
information for person to contact for further information (name, phone number,
FAX number, email address)

 

[**] agrees to work with Digimarc to provide
reasonable additional information and perform reasonable additional tests, as
requested by Digimarc, to assist Digimarc in resolution of the problem.

 

** CONFIDENTIAL PORTION OMITTED AND FILED
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ATTACHMENT
3

 

PAYMENT
FOR SERVICES

 

Digimarc shall
bill [**] for services in one hour increments at the following hourly rates:

 

	
  Technical/Design Consultant

  	
  [**]

  
	
  Senior Engineer

  	
  [**]

  
	
  R&D/Engineering Executive

  	
  [**]

  
	
  Project Manager

  	
  [**]

  
	
  Administrator/Scheduler

  	
  [**]

  

 

Fees for
services will be invoiced on the earlier of 1) the last day of the month or 2)
the completion of the Services.  Invoices
are due thirty (30) days from the date of receipt of a correct invoice.  A late charge of 1.5% per month will be
charged on any late payments.  All fees
are due and payable in [**].

 

[**] will
reimburse Digimarc for all out-of-pocket expenses reasonably and necessarily
incurred in providing the Verification Tests and other services.  Expenses will be itemized and reported by
category.  Out-of-pocket expenses will
not be “marked up” by Digimarc.  Costs
include, but are not limited to, reasonable travel and lodging expenses,
telephone and fax charges, postage and overnight deliveries, and charges for
rental equipment or materials purchased specifically to be used in providing
the Verification Tests and other services. 
All invoices for out-of-pocket expenses will be issued monthly in arrears
and are due thirty (30) days from the date of receipt of a correct
invoice.  Supporting receipts and
vouchers will be available for review at Digimarc’s offices.  A late charge of 1.5% per month will be
charged on any late payments. Payments will additionally include Value Added
taxes and other tariffs and fees that may be imposed [**].

 

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

 

 

ATTACHMENT
4

 

IDENTIFICATION
OF [**]

 

** CONFIDENTIAL PORTION OMITTED AND FILED
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ATTACHMENT
5

 

[**]

 

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SCHEDULE
“K-2”

 

[**]
LICENSE AGREEMENT - [**]

 

This [**]
LICENSE AGREEMENT (the “Agreement”) is made

 

BETWEEN

 

<name and
address of [**]> (“[**]”)

 

-
AND -

 

DIGIMARC
CORPORATION, a corporation
incorporated under the laws of Delaware and having its head office at 9405 SW
Gemini Drive, Beaverton, OR 97006 (“Digimarc”)

 

RECITALS

 

Digimarc has
expertise in, and owns extensive intellectual property, including patents,
patent applications, copyrights and trade secrets related to digital
watermarks, [**], copyright protection, and device control (the “Digimarc IPR”);
and

 

The [**]
possesses or will possess intellectual property rights related to the
application of such intellectual property [**]; and

 

Digimarc and
[**] have cooperated in the development of means, using such intellectual
property, [**]

 

[**] desires
to obtain a license to certain components of the [**] so it can have [**].

 

In
consideration of these premises, the
covenants set out in this Agreement and other good and valuable consideration,
the receipt and adequacy of which are acknowledged by each of the parties, the
parties agree as follows:

 

I.                                         DEFINITIONS  AND PRINCIPLES OF INTERPRETATION

 

1.1                                 Definitions

 

“Agreement” means these
articles of agreement, including the Attachments, and those documents as
specified or referenced in this Agreement as forming part of the Agreement, all
as may be amended from time to time;

 

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“Arbitration Agreement” means
the Arbitration Agreement entered into between the parties and others effective
1 January [**], as amended from time to time;

 

“Attachment” means a document
specified as being attached to this Agreement;

 

[**]

 

“Business Day” means a day that both Digimarc
and [**] are open for business at their respective addresses noted above;

 

“Confidential Information” means information disclosed before or during the
Term of this Agreement in any form which, if disclosed in tangible form, is or
was labelled “Confidential”, “Proprietary” or with a similar legend, or if
disclosed orally, is or was information that by its nature would be understood
to be confidential to the Discloser.  For
greater certainty, the Confidential Information of Digimarc includes [**];

 

[**]

 

“Digimarc IPR” means Intellectual Property
Rights owned by Digimarc, now or during the Term of this Agreement, to
the extent that same specifically relates to or forms part of the [**];

 

“Digital Watermark” refers to [**] (including [**]) that are
[**] from [**] by [**] of [**], which [**] and yet do not significantly [**]
from the aesthetics of the [**] or [**] thereby. Examples include:

 

1.               generally imperceptible changes to
[**] or placement in [**];

2.               [**] of a substrate, where the
[**] substantially uniform to human touch;

3.               slight localized changes to [**]
or [**] of a printed document;

4.               slight changes to [**]; or

5.               [**] of substantially [**].

 

“Discloser” means a party which has disclosed
or otherwise made available its Confidential Information to the other party;

 

“DLA Contract Authority” means the individual appointed
as such under the [**] License;

 

[**]

 

[**]

 

[**]

 

[**]

 

“Effective Date” means the date on which this
Agreement is last signed by the parties;

 

[**]

 

“Field of Use” means the field of [**];

 

“Improvement” means an improvement provided to
[**] under clause 2.14 of the [**];

 

“Intellectual Property Rights” or “IPR” means all intellectual property rights existing now and
in the future including, without limitation, trade secrets, copyright, database
rights, know-how, topographies, patents and patent applications;

 

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[**]

 

[**]

 

“[**]License” means Schedule L-2 to the [**] License;

 

[**]

 

“Recipient” means a party to which the Confidential Information of the other party has been disclosed or otherwise
made available;

 

“Services” means the Verification Tests and any other service performed by Digimarc under this Agreement;

 

“Term” means the period commencing on the Effective Date and ending on the earlier of 31 December [**]
or the date of termination of this Agreement; and

 

“Verification Test” means a test or tests developed under the [**] License  to determine if a [**].

 

1.2           Interpretation - In this Agreement:

 

1.2.1        unless otherwise specified, all references to money
amounts are to the currency of the United States of America;

 

1.2.2        the use of words in the singular or plural, or with a particular gender, shall not limit the scope
or exclude the application of any provision of this Agreement to such person or
persons or circumstances as the context otherwise permits;

 

1.2.3        whenever a provision of this Agreement requires an
approval or consent by a party to this Agreement and notice of such approval or
consent is not delivered
within the applicable time, then the party shall be conclusively deemed to have
withheld the consent or approval;

 

1.2.4        unless otherwise specified, the number of days within
or following which any payment is to be made or act is to be done shall be interpreted to be continuous and shall be calculated by
excluding the day on which the period commences and including the day which
ends the period and by extending the period to the next Business Day if the
last day of the period is not a Business Day;

 

1.2.5        unless otherwise specified, the order of precedence for interpreting this Agreement shall be:

 

(a)            this Agreement, excluding Attachments, and

 

(b)            the Attachments;

 

** CONFIDENTIAL PORTION OMITTED
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1.2.6        for greater certainty, a party or representative to which this Agreement grants the right to make a
decision or determination in the sole discretion of the party or representative
is not required to act reasonably in making the decision or determination and
no such decision or determination may be challenged by the other party under
the Arbitration Agreement or otherwise;

 

1.2.7        the words “includes” or “including” will be construed
as meaning “included without limitation” and “including without limitation” as
the case may be; and

 

1.2.8        a clause or Attachment, unless the context requires
otherwise, is a reference to a clause to, an Attachment of, or a paragraph of
an Attachment to, this Agreement, as amended from time to time in accordance
with this Agreement.

 

1.3           Applicable
Law - This Agreement shall be construed in accordance with the laws of England
to the exclusion of its rules of conflicts of laws.

 

1.4           Attachments
- The attachments to this Agreement, listed below, are an integral part of this
Agreement:

 

	
  Attachment

  	
   

  	
  Description

  
	
  Attachment “1”

  	
   

  	
  [**]

  
	
  Attachment “2”

  	
   

  	
  Opinion of Counsel

  
	
  Attachment “3”

  	
   

  	
  Problem Report

  
	
  Attachment “4”

  	
   

  	
  Payment for Services

  
	
  Attachment “5”

  	
   

  	
  [**]

  
	
  Attachment “6”

  	
   

  	
  [**]

  

 

2.             GRANT OF RIGHTS  AND SERVICES

 

2.1           Subject
to the terms of this Agreement, Digimarc hereby grants to [**], a [**]license
under the Digimarc IPR and the [**] IPR, in the Field of Use only, [**].

 

2.2           [**]
acknowledges and agrees that the Digimarc IPR, and any technology developed by
Digimarc during the course of its work [**], is the property of Digimarc and
that [**] has no right to sublicense it. [**] acknowledges that [**] may not
[**].

 

2.3           [**]
acknowledges and agrees that the [**] IPR is the property of its owner and that
[**] has no right to sublicense it.

 

2.4           Nothing
in this Agreement shall be construed to grant, by implication or otherwise, any
broader rights than those specifically granted herein.

 

2.5           Commencing
no later than ten (10) Business Days after every written request made
during the Term by [**], Digimarc shall make an irrevocable offer, which offer
shall remain open for acceptance within sixty (60) days of receipt [**]

 

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

 

 

2.6           Commencing
no later than twenty (20) Business Days after every written request made by
[**] during the Term, Digimarc shall conduct Verification Tests of specified
[**] on a date or dates agreed between Digimarc and [**] for the charges
specified in clause 3.

 

2.7           Digimarc
shall obtain at its own expense all licenses or permits required to be obtained
from the Government of the United States in order for Digimarc to comply with
its obligations under this Agreement including, without limitation, to deliver
the [**], and grant the foregoing license to [**].

 

3.             SERVICE FEES

 

3.1           [**]
shall pay to Digimarc a fee for the Services as detailed below.  The fee for Services provided:

 

(a)           on or before 31 December [**], is as set out in Attachment 4;

 

(b)           after 31 December [**], will be no greater than the fee then paid
to Digimarc for similar services by Digimarc’s most favoured customer.

 

3.2           Shipments
of [**], [**] and related documentation shall be by air, Cost, Insurance and
Freight (C.I.F.) closest major airport (i.e., Digimarc shall be responsible for
transportation and insurance to this port of entry).  Except as otherwise expressly provided in this
Agreement, [**] shall pay Digimarc all sales, use, goods and services or other
similar taxes levied by any government in the United States or the [**]
principal place of business which Digimarc is obliged to collect and remit to
[**] in connection with any amount paid by [**] to Digimarc under this
Agreement.

 

3.3           Digimarc
is responsible for, and shall indemnify [**] against, and hold [**] harmless
from, the payment of all taxes levied by any government on or in respect of
Digimarc’s income and any amounts required by law to be paid in respect of
social benefits for Digimarc’s employees relating to or arising out of the
performance of the Services. If required by law, [**] shall deduct all such
taxes and amounts from the amounts otherwise payable to Digimarc and remit them
to the appropriate authorities.

 

4.             OPINION OF COUNSEL

 

4.1           Before
introducing [**] shall obtain and forward to Digimarc a written opinion of
counsel substantially in the form attached as Attachment 2 that confirms:

 

(a)           the validity and enforceability of the terms of this Agreement, under
the laws of the jurisdiction where [**] resides; and

 

(b)           the legality of each [**] under the laws of the jurisdiction where [**]
resides.

 

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

 

 

4.2           Digimarc
shall not unreasonably withhold its consent to any qualifications which [**]
counsel may require to be made to such opinion.

 

5.             [**] RESPONSIBILITIES

 

5.1           [**]
shall make every reasonable effort, including obtaining a legally binding
commitment from all [**], to ensure that the [**] do not use the [**] or the
Digimarc IPR, or permit or suffer the [**] or the Digimarc IPR to be used, for
any purpose other than [**].

 

5.2           If
[**] learns, or has reasonable cause to believe, that any [**] has used, or
permitted or suffered to be used, or proposes to use or permit or suffer to be
used, [**] or the Digimarc IPR except as expressly authorised herein, [**]
shall immediately notify Digimarc and the DLA Contract Authority, and [**]
shall use all reasonable efforts, at its own expense,  to prevent any further such use including
exercising whatever legal remedies (including, without limitation, an
application for injunctive relief) are available to [**].  [**] shall, immediately on notice by
Digimarc, assign to Digimarc any right of action which [**] may have to prevent
any further such use. Following such assignment, [**] shall cooperate with
Digimarc to achieve the successful prosecution, or, if elected by Digimarc,
settlement, of any such action.

 

5.3           [**]
shall promptly report to Digimarc every instance which comes to its attention
of:

 

(i)      a failure of the [**] to meet the specification established under the
[**] in the form of the Problem Report attached as Attachment 3; or

 

(ii)     unauthorised access to the [**] in the possession of a [**]; or

 

(iii)    failure of any [**] or [**] provided by Digimarc to [**] in response to
the attempted  [**].

 

5.4           [**]
shall inform Digimarc within thirty (30) days after the end of each calendar
quarter during the Term  of all  improvements 
relating to (i) [**]; (ii) [**] (iii) [**] (iv) any
other part of the [**] has made, or caused or permitted to be made, as a result
of access to and use of the Digimarc Confidential Information. The first such
information shall be provided to Digimarc within thirty (30) days after the
first calendar quarter following said access, and shall cover improvements made
from the date [**] first learned of the Digimarc Confidential Information.  Following the provision of the information
under this clause 5.4, [**] shall provide to Digimarc within a reasonable
period of time following request, the Technical Information for those
improvements requested by Digimarc in writing.

 

5.5           [**]
hereby grants to Digimarc a royalty-free, non-exclusive, sub-licensable,
worldwide license to use the improvements described in clause 5.4 and in any
patents thereon owned or otherwise licenseable by [**].

 

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

 

 

5.6           Such
license shall continue until this Agreement expires or is terminated, or until
[**] has no further rights to Digimarc IPR, whichever occurs last.

 

5.7           For
greater certainty, the obligations set out in clauses 5.4, 5.5 and 5.6 shall
not apply to any such improvement which the [**] can demonstrate would have
been made irrespective of access to the Digimarc Confidential Information.

 

5.8           [**]
(or Digimarc if [**] so designates), shall conduct Verification Tests on representative
[**].  A report detailing the results of
the Tests shall be prepared and promptly provided to [**].

 

5.9           If
[**] designates Digimarc to conduct the tests:

 

(i)      on or before December 31, [**], [**] shall pay Digimarc the fees
set out in  Attachment 4;

 

(ii)     after December 31, [**], 
[**] shall pay Digimarc the fees then paid to Digimarc for similar
services by Digimarc’s most favoured customer.

 

5.10         In
the event that said Tests do not indicate, to [**] satisfaction, that [**]
standards detailed in the Verification Tests, [**] will require the [**] to
immediately take whatever corrective action(s) [**] considers appropriate.

 

5.11         [**]
shall advise Digimarc in writing in advance of any changes which [**] may, at
its sole discretion, make from time to time to the information set forth in
Attachments 5 and 6.

 

6.             CONFIDENTIALITY

 

6.1           Except as otherwise expressly permitted by this
Agreement, a Recipient shall not use, 
reproduce or disclose the Confidential Information of the Discloser for
any  purpose other than as reasonably
necessary to comply with its obligations under this Agreement or to exercise
any rights or licenses granted to it under or pursuant to this Agreement.

 

6.2           The Recipient shall protect the Confidential
Information of the Discloser from disclosure by using the same degree of care,
which shall be no  less than a reasonable
degree of care, as the Recipient uses to protect its own confidential  information.

 

6.3           On written request from the Discloser, the Recipient
shall return, or certify the destruction of, all originals and copies of the
Discloser’s Confidential Information in the Recipient’s possession or control
which the Recipient does not need to retain in order to perform any obligations
imposed, or exercise any rights acquired, by this Agreement.

 

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

 

 

6.4           A Recipient may, on a need to know basis, and only
for the purposes  described in
clause 6.1, give the other party’s Confidential Information to the
Recipient’s employees or  authorized
subcontractors provided that such employee or subcontractor shall have entered
into a non-disclosure agreement in respect of such Confidential Information in
favour of the Discloser on terms materially similar to the provisions of this
clause 6.

 

6.5           The obligations set out in this clause 6 will not
apply to any Confidential Information that:

 

(a)           is or becomes publicly available other than through the fault of the
Recipient;

 

(b)           was known to the Recipient prior to disclosure as shown by
documentation sufficient to establish such knowledge;

 

(c)           was or is lawfully disclosed to the 
Recipient by a third party who did not breach any obligation of
confidence by such disclosure and who made the disclosure without restriction
on further disclosure all of which is shown by documentation sufficient to
establish same; or

 

(d)           is required by law to be disclosed 
provided, however, that the Recipient shall first give written notice to
the Discloser before the disclosure so that the Discloser may seek an
appropriate protective order.

 

Notwithstanding
the foregoing, the fact that Confidential Information, or any part thereof, can
be linked together by a search of publications and other information, followed
by a selection of a series of such items of knowledge from unconnected sources,
and fitting together those items of knowledge so as to duplicate or recreate
any item of Confidential Information, shall not be deemed to cause the
Confidential Information, or any part thereof, to be included within exceptions
(a), (b) or (c), above.

 

6.6           [**] shall not make any disclosure of Digimarc
Confidential Information to [**] which is not licensed by Digimarc, except as
expressly and previously authorized in writing by Digimarc.  Disclosure [**] shall only be made if and to
the extent reasonably necessary for [**] to fulfill its obligations to [**].

 

6.7           The obligations of the parties under this clause 6
will survive the Term or sooner termination of this Agreement and will remain
in full force and effect regardless of the cause of any termination.

 

6.8           Nothing in this Agreement shall be construed to
require [**] to disclose any information which is confidential to a third party
including for greater certainty [**].

 

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

 

 

7.             INTELLECTUAL PROPERTY
INDEMNIFICATION

 

7.1           [**]
shall provide Digimarc with prompt written notice of any claim, demand or
action against [**] based on an allegation that the Digimarc IPR or any part
thereof, infringes any Intellectual Property Right of any person (referred to
below as a “Claim”).

 

7.2           Subject
to the limitations set out in clauses 7.3 to 7.7 inclusive, Digimarc shall, at
its own expense:

 

(a)           negotiate the resolution of any such Claim;

 

(b)           pay all costs associated with the Claim; and

 

(c)           defend any action based on the Claim.

 

7.3           [**]
shall, at Digimarc’s expense, comply with all reasonable requests by Digimarc
for assistance from [**] in connection with the settlement or defence of the
Claim.

 

7.4           Notwithstanding
any other provision of this Agreement to the contrary, but subject to the
limitations in this clause 7, Digimarc shall indemnify [**] and all of  the [**] against and save [**] and all [**]
harmless from all loss, costs, liabilities including an award of damages, and
expenses, including legal fees, arising from each Claim first notified to
Digimarc prior to 31 December [**]. 
The obligation set out in this clause 7 shall not apply in respect of
any settlement made by [**] without the consent of Digimarc.

 

7.5           The
liability of Digimarc under clause 7.4 of this Agreement and under the
equivalent clause of every other licence or consulting agreement entered into
between Digimarc and [**] and [**] pursuant to the provisions of [**] License
will not exceed the Indemnity Limit as defined in clause 7.6 below.

 

7.6           The
Indemnity Limit shall be [**], or such higher amount as notified by Digimarc
from time to time.

 

7.7           For
the purposes of clauses 7.2 through 7.6 inclusive, “Claim” shall mean any
Claim, other than a Claim for patent infringement which Digimarc can
demonstrate occurred without Digimarc acting recklessly or negligently.

 

7.8           The
provisions of this Section 7 shall apply to any prior Agreements between
the parties referenced herein as if fully set forth therein.

 

8.             REPRESENTATIONS AND WARRANTIES OF
DIGIMARC

 

8.1           Digimarc
represents, warrants and undertakes to [**] that from and after the Effective
Date:

 

(a)           the Services provided under this Agreement will be of professional
quality conforming to generally accepted practices for like services and will
be performed at all times in a 

 

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

 

 

timely and cost effective manner and, for greater certainty Digimarc
shall employ the standard of care in performing the Services  that would be expected of an expert [**] of
[**] of the same or similar type as the [**] which comprises the [**];

 

(b)           Digimarc is duly incorporated and organized and is validly subsisting
under the laws of the State of Delaware, U.S.A. or some other state in the
United States with full corporate power and authority to enter into this
Agreement;

 

(c)           to the best of its knowledge, neither this Agreement nor the Services
will contravene, breach, or result in any default under any agreement, permit,
by-law, or law or regulation to which Digimarc is subject or by which it is
bound including, for greater certainty any laws or regulations in effect in the
United States governing export;

 

(d)           this Agreement when executed and delivered by Digimarc shall constitute
a valid and binding agreement with Digimarc enforceable against Digimarc
according to its terms; and

 

(e)           Digimarc will at all material times have the right to grant the
licenses to the Digimarc IPR as required by this Agreement.

 

8.2           Digimarc
represents, warrants and undertakes to [**] that:

 

(a)           incorporated as part of [**];

 

(b)           [**] shall contain no lock, clock, timer, counter, copy protection
feature, replication device or intentional defects (including but not limited
to “viruses” or “worms” as such terms are commonly used in the computer
industry), CPU serial number reference, or other device which might:

 

(i)            lock, disable or erase the [**] or any data which is
loaded on the [**] so as to prevent full use of the [**] by authorized persons;
or

 

(ii)           require action or intervention by Digimarc or any
other person to allow properly trained and authorized persons to use the [**];

 

(c)           the source code for the [**] will support the year 2000 and neither
performance nor functionality will be affected by dates prior to, during and
after the year 2000, and for greater certainty, the [**] will switch to 1 January 2000
on 1 January 2000, and the year 2000 will be recognized as a leap year.

 

9.             REPRESENTATIONS AND WARRANTIES OF
[**]

 

9.1           [**]
represents and warrants to Digimarc that:

 

(a)           [**] has full power and authority to enter into this
Agreement; and

 

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

 

 

(b)           this Agreement when executed and delivered by  [**] shall constitute a valid, binding and
enforceable obligation of  [**].

 

9.2           [**] makes no representations, warranties or
undertakings that [**] has any right to grant the licenses required to be
granted by clause 5.5 and Digimarc shall be solely responsible for determining
that such improvements are suitable for the intended use and for the
consequences of any use of the same whether by Digimarc or others, and [**]
hereby disclaims all liability in connection therewith.

 

10.          TERM AND TERMINATION

 

10.1         This Agreement will take effect on the Effective Date
and will remain in force throughout the Term unless sooner terminated as
provided herein.

 

10.2         Either party may terminate this Agreement if the
other party breaches any of its obligations under this Agreement and fails to
remedy such breach within thirty (30) days after receiving written notice of
such breach from the other party.

 

10.3         Upon termination of this Agreement:

 

(a)           all rights granted to [**] under this Agreement will immediately
terminate.  No interest in any such
rights will thereafter remain with [**], except that [**], but no further [**]
shall be permitted; and

 

(b)           each party shall return, or certify the destruction of, to the
Discloser, all originals and copies of the 
Discloser’s Confidential Information in the party’s possession or
control which the party does not need to retain in order to exercise any rights
acquired by this Agreement.

 

10.4         No termination of this Agreement will in any manner
release, or be construed as releasing, any party from any liability arising out
of or in connection with that party’s breach of or failure to perform any
covenant, duty or obligation contained herein prior to the date of such
termination.

 

10.5         Upon termination of the [**] License by Digimarc for
cause, the rights of the [**] hereunder to use the Digimarc IPR shall be deemed
to be restricted to the [**] as of the date of such termination.

 

11.          DISPUTE RESOLUTION

 

11.1         Any Dispute (as defined in the Arbitration Agreement)
shall be finally settled by arbitration in accordance with the Arbitration
Agreement.

 

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

 

 

11.2         Unless otherwise agreed between the parties or unless
the subject matter of the dispute resolution proceedings is a party’s right to
terminate this Agreement, the Services shall continue during the dispute
resolution proceedings and payments due to Digimarc shall not be withheld on
account of such proceedings unless that particular services or payment is the
subject matter of the proceedings. 
Notwithstanding the foregoing, [**] may in its sole discretion instruct
Digimarc to continue to perform services which are the subject matter of the
proceedings and Digimarc shall act in accordance with those instructions,
subject to payment under clause 3.1.

 

12.          MISCELLANEOUS PROVISIONS

 

12.1         Remedies Cumulative - Except as otherwise expressly set out in this
Agreement:

 

(a)           each and every right, power and remedy of a party will be considered to
be cumulative with and in addition to any other right, power and remedy which
such party may have at law or in equity in the event of breach of any of the
terms of this Agreement;

 

(b)           the exercise or partial exercise of any right, power or remedy will
neither constitute the exclusive election thereof nor the waiver of any other
right, power or remedy available to such party; and

 

(c)           a party terminating this Agreement in accordance with the provisions of
the Termination clause will have no liability or obligation to the other as a
result of or with respect to the termination.

 

12.2         Notices.   All notices
under this Agreement shall be delivered by fax or recognized [**] courier
service.  The notice shall be deemed
effective as of the date of delivery to the address of the party specified
below, as evidenced by a delivery receipt or the addressee’s registry of
incoming correspondence.  Unless otherwise
expressly set out in this Agreement, all notices to a party will be sent to the
party’s authorized representative identified below and all notices from a party
will be sent by the party’s authorized representative identified below.

 

12.3         Any notice to [**] shall be sent to both of, and any
notice from [**] shall be sent by either:

 

	
  Name1

  	
   

  	
  Name2

  
	
  Address1

  	
   

  	
  Address2

  

 

12.4         Any notice to Digimarc shall be sent to both of, and any notice from
Digimarc shall be sent by either:

 

	
  Mr. Robert
  Chamness

  	
   

  	
  Mr. Scott
  Carr

  
	
  Vice
  President and General Counsel

  	
   

  	
  President
  Digimarc

  
	
  Digimarc
  Corporation

  	
   

  	
  [**]

  

 

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

 

 

	
  9405
  SW Gemini Drive

  	
   

  	
  Digimarc
  Corporation

  
	
  Beaverton,
  OR 97008

  	
   

  	
  9405
  SW Gemini Drive

  
	
  Fax:
  (503) 469-4777

  	
   

  	
  Beaverton,
  OR 97008

  

 

12.5         A
copy of every notice sent by either party shall be sent to: [**].

 

12.6         A
party may change its address for notice by notice to the other party in
accordance with the foregoing provisions.

 

12.7         Severability.   If any part of this Agreement
is held by an arbitral tribunal appointed pursuant to the Arbitration Agreement
or other competent authority to be void or unenforceable, the parties agree
that such determination will not result in the nullity or unenforceability of
the remaining parts of this Agreement, which will continue in force to the
fullest extent permitted by law. The parties further agree to replace such void
or unenforceable part of this Agreement with a valid and enforceable provision
that will achieve, to the extent legally permissible, the economic, business
and other purposes of the void or unenforceable part.

 

12.8         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.

 

12.9         Entire Agreement.  This
Agreement is intended by the parties to be the final expression of their
agreement and constitutes and embodies the entire agreement and understanding
between the parties hereto and constitutes a complete and exclusive statement
of the terms and conditions thereof, and will supersede any and all prior
correspondence, conversations, negotiations, agreements or understandings
relating to the same subject matter.

 

12.10       Amendments.    No
change in, modification of or addition to the terms and conditions contained
herein will be valid as between the parties unless set forth in a writing that
is signed by an authorized representative of each of the parties and which
specifically states that it constitutes an amendment to this Agreement.

 

12.11       Waiver.   No waiver of any term, provision, or condition of this Agreement will
be effective unless in a written document signed by the waiving party and no
such waiver in any one or more instances, will be deemed to be, or be construed
as, a further or continuing waiver of that term, provision or condition or any
other term, provision or condition of this Agreement.

 

12.12       Assignment and Successors.    This
Agreement may not be assigned by [**] without Digimarc’s consent, which consent
shall not be unreasonably withheld or delayed. This Agreement and all of its
terms, conditions and covenants are intended to be fully effective 

 

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

 

 

and
binding, to the extent permitted by law, on the successors and permitted
assigns of the parties hereto.

 

12.13       Captions.   Captions are
provided in this Agreement for convenience only and they form no part, and are
not to serve as a basis for interpretation or construction, of this Agreement,
nor as evidence of the intention of the parties hereto.

 

12.14       Disclaimer of Agency.   Nothing
contained in this Agreement is intended or will be construed so as to
constitute the parties to this Agreement as partners or joint venturers or as
agents of each other. Neither party will have any express or implied right or
authority to assume or create any obligations on behalf of or in the name of
any other party or to bind any other party in any contract, agreement or
undertaking with any third party.  No
employee of a party shall be deemed or considered to be an employee of the
other party or of both parties.

 

12.15       Publicity.   The parties agree that from time-to-time it will be beneficial to both
parties to issue [**] and [**] from the [**]. Each party agrees to submit for approval
by the other party any [**] that involves the other party, which approval shall
not unreasonably be withheld.

 

12.16       Effectiveness.  This Agreement shall not be effective until it is signed by both of the
parties.

 

12.17       Ambiguities.   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 shall not
apply in interpreting this Agreement.

 

12.18       Survival.    All clauses of this Agreement which expressly or by implication are
intended to survive the termination of this Agreement will do so and, for
greater certainty and notwithstanding any provision in this Agreement to the
contrary, the provisions of clauses 3.2, 3.3, 5.1, 5.2, 5.5, 5.6, 6, 7, 11, and
12 of this Agreement shall survive termination of this Agreement by either
party for any reason.

 

IN WITNESS
WHEREOF, this Agreement has been
executed and delivered by the parties hereto as of the Effective Date.

 

	
  DIGIMARC
  CORPORATION

  	
   

  	
  <[**]>

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
  By:

  	
   

  
	
  Name:

  	
   

  	
   

  	
  Name:

  	
   

  
	
  Title:

  	
   

  	
   

  	
  Title:

  	
   

  
	
  Date:

  	
   

  	
   

  	
  Date:

  	
   

  

 

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

 

 

ATTACHMENT 1

 

[**]

 

The [**] will cause the
following [**] to take place:

 

(a)           [**]

 

(b)           [**]

 

(c)           [**] by {date TBD}[**]

 

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SECURITIES AND EXCHANGE COMMISSION.

 

 

ATTACHMENT 2

 

DRAFT OPINION OF COUNSEL

 

Digimarc Corporation

9405 SW Gemini Drive

Beaverton, OR 97008

USA

 

Attention:

 

President
and CEO

 

Dear:

 

In
connection with your proposal to grant a license to <[**]> to use the
[**] and for no other purpose, we confirm that:

 

(a)           each provision of this Agreement is valid and enforceable against
<[**]> under the laws of <[**]>; and

 

(b)           none of the [**] described below, at the time of writing, contravenes
any law, regulation, policy, principle, or doctrine in effect in the
jurisdiction of the <principal place of business/head office> of
<[**]>.

 

<[**]>

 

Yours
truly,

 

 

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

 

 

ATTACHMENT 3

 

PROBLEM REPORT

 

Each
problem report will contain all information necessary to reproduce or
demonstrate the occurrence of the problem. 
Problem reports will [**] and will be delivered electronically in a
format to be provided by Digimarc.

 

Problem reports will
contain:

 

·      Date problem was
encountered

·      Detailed
description of the problem, including the frequency with which the problem
occurs

·      Name and [**] the problem

·      Step by step instructions to reproduce the problem

·      All data files required to reproduce the problem

·      [**]

·      Severity of problem

·      Contact information for person to contact for further information
(name, phone number, FAX number, email address)

 

Licensee agrees to work
with Digimarc to provide reasonable additional information and perform  reasonable additional tests, as requested by
Digimarc, to assist Digimarc in resolution of the problem.

 

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

 

 

ATTACHMENT 4

 

PAYMENT FOR SERVICES

 

Digimarc
shall bill [**] for services in one hour increments at the following hourly
rates:

 

	
  Technical/Design
  Consultant

  	
   

  	
  [**]

  
	
  Senior Engineer

  	
   

  	
  [**]

  
	
  R&D/Engineering
  Executive

  	
   

  	
  [**]

  
	
  Project Manager

  	
   

  	
  [**]

  
	
  Administrator/Scheduler

  	
   

  	
  [**]

  

 

Fees
for services will be invoiced on the earlier of 1) the last day of the month or
2) the completion of the Services. 
Invoices are due thirty (30) days from the date of receipt of a correct
invoice.  A late charge of 1.5% per month
will be charged on any late payments. 
All fees are due and payable [**].

 

[**]
will reimburse Digimarc for all out-of-pocket expenses reasonably and
necessarily incurred in providing the Verification Tests and other
services.  Expenses will be itemized and
reported by category.  Out-of-pocket
expenses will not be “marked up” by Digimarc. 
Costs include, but are not limited to, reasonable travel and lodging
expenses, telephone and fax charges, postage and overnight deliveries, and
charges for rental equipment or materials purchased specifically to be used in
providing the Verification Tests and other services.  All invoices for out-of-pocket expenses will
be issued monthly in arrears and are due thirty (30) days from the date of
receipt of a correct invoice.  Supporting
receipts and vouchers will be available for review at Digimarc’s offices.  A late charge of 1.5% per month will be
charged on any late payments. Payments will additionally include Value Added
taxes and other tariffs and fees that may be imposed [**].

 

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

 

 

ATTACHMENT 5

 

IDENTIFICATION OF [**]

 

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

 

 

ATTACHMENT 6

 

[**]

 

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

 

 

SCHEDULE
“L-1”

 

[**]
LICENSE AGREEMENT - [**]

 

This [**] LICENSE AGREEMENT (the
“Agreement”) is made

BETWEEN

 

<name
and address of Licensee> (“Licensee”)

 

- AND
-

 

DIGIMARC
CORPORATION, a corporation
incorporated under the laws of Delaware and having its head office at 9405 SW
Gemini Drive, Beaverton, Oregon. U.S.A. 
97006 (“Digimarc”)

 

“[**]”

 

RECITALS

 

Digimarc has
expertise in, and owns extensive intellectual property, including patents,
patent applications, copyrights and trade secrets related to digital
watermarks, [**], copyright protection, and device control;

 

The [**]
possesses or will possess intellectual property rights related to the
application of such intellectual property to [**]; and

 

Digimarc and
[**] have cooperated in the development of means, using such intellectual
property, [**]; and

 

Digimarc is
licensing its [**] authorized by a duly licensed [**], and

 

Licensee,
having been authorized by a duly licensed [**], desires access to such
technology so that Licensee can include Digimarc’s [**];

 

In
consideration of these premises, the
covenants set out in this Agreement and for other good and valuable
consideration, the receipt and adequacy of which are acknowledged by each of
the parties, the parties agree as follows:

 

** CONFIDENTIAL PORTION OMITTED
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1.             DEFINITIONS  AND
PRINCIPLES OF INTERPRETATION

 

In this Agreement:

 

“Agreement” means these articles of agreement, including the Attachments, and
those documents as specified or referenced in this Agreement as forming part of
the Agreement, all as may be amended from time to time;

 

“Arbitration Agreement” means the Arbitration Agreement entered into between the parties and
others effective 1 January [**], as amended from time to time;

 

“Attachment” means a document specified as being attached to this Agreement;

 

[**]

 

“Business Day” means a day on which both Digimarc and Licensee are open for
business at their respective addresses noted above;

 

“Confidential Information” means information disclosed before or during the Term of this
Agreement in any form which, if disclosed in tangible form, is or was labeled “Confidential”,
“Proprietary” or with a similar legend, or if disclosed orally is or was
information that by its nature would be understood to be confidential to the
Discloser. For greater certainty, the Confidential Information of Digimarc
includes the Digimarc IPR and the [**];

 

[**]

 

“Consulting Services” means the Integration Support and all other services that Digimarc
provides to Licensee regarding [**], and such other matters as Licensee may
request and Digimarc agrees to provide, pursuant to this Agreement;

 

“Digimarc IPR” means Intellectual Property Rights owned by Digimarc, now or during
the Term of this Agreement, to the extent that same specifically relates to or
forms part of [**];

 

“Digital [**]” refers to [**] (including [**]) that are [**] from [**] by [**] of
[**], which [**] of [**] and yet do not significantly [**] from the aesthetics
of the [**] or [**] thereby. Examples include, but are not limited to:

 

1.             generally
imperceptible changes to [**] or placement in [**];

2.             [**]
of a substrate where the [**] substantially uniform to human touch;

3.             slight
localized changes to [**] or [**] of a printed document;

4.             slight
changes to [**]; or

5.             [**]
of substantially [**];

 

“Discloser” means a party that has disclosed or otherwise made available its
Confidential Information to the other party;

 

[**]

 

“Effective Date” means the later of the date on which this Agreement is last signed
by the parties and the date on which Digimarc receives written notice from the
[**] that the Licensee is authorized to [**];

 

** CONFIDENTIAL PORTION OMITTED
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[**]

 

“Field of Use” means the field of [**];

 

“Improvement” means an improvement provided to [**] under clause 2.14 of the [**]
Agreement;

 

“Installation” means installation of the Digimarc [**] in accordance with in the
design work flow of the Licensee.

 

“Integration Support” means the consulting and programming services to be provided by
Digimarc to Licensee to assist Licensee to [**];

 

“Intellectual Property Rights” or “IPR” means all intellectual
property rights existing now and in the future including, without limitation,
trade secrets, copyright, database rights, know-how, topographies, patents and
patent applications;

 

“[**]” means the [**] named above;

 

[**]

 

“Recipient” means the party to which the Confidential Information of the other
party has been disclosed or otherwise made available;

 

“Services” means Installation, the Verification Tests, the Training, and the
Consulting Services, or any of them;

 

“Term” means the period commencing on the Effective Date and ending on the
earlier of 31 December [**] or the date of termination of this
Agreement;

 

“Training” means the training in the use of the [**] described in Attachment
6; and

 

“Verification Test” means a test or tests developed under the [**] Agreement to
determine [**].

 

1.2           Interpretation - In this
Agreement:

 

1.2.1        unless otherwise specified, all
references to money amounts are to the currency of the United States of
America;

 

1.2.2        the use of words in the singular
or plural, or with a particular gender, shall not limit the scope or exclude
the application of any provision of this Agreement to such person or persons or
circumstances as the context otherwise permits;

 

1.2.3        whenever a provision of this
Agreement requires an approval or consent by a party to this Agreement and
notice of such approval or consent is not delivered within the applicable time,
then, the party shall be conclusively deemed to have withheld the consent or
approval;

 

** CONFIDENTIAL PORTION OMITTED
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1.2.4                        unless otherwise specified, the
number of days within or following which any payment is to be made or act is to
be done shall be interpreted to be continuous and shall be calculated by
excluding the day on which the period commences and including the day which
ends the period and by extending the period to the next Business Day if the
last day of the period is not a Business Day;

 

1.2.5                        unless otherwise specified, the
order of precedence for interpreting this Agreement shall be:

 

(a)                                  this Agreement, excluding
Attachments, and

 

(b)                                 the Attachments;

 

1.2.6                        for greater certainty, a party or
representative to which this Agreement grants the right to make a decision or
determination in the sole discretion of the party or representative is not
required to act reasonably in making the decision or determination and no such
decision or determination may be challenged by the other party under the
Arbitration Agreement or otherwise;

 

1.2.7                        the words “includes” or “including”
will be construed as meaning “included without limitation” and “including
without limitation” as the case may be; and

 

1.2.8                        a clause or Attachment, unless the
context requires otherwise, is a reference to a clause to, an Attachment of, or
a paragraph of an Attachment to, this Agreement, as amended from time to time
in accordance with this Agreement.

 

1.3                                 Applicable Law - This Agreement
shall be construed in accordance with the laws of England to the exclusion of
its rules of conflicts of laws.

 

1.4                                 Attachments - The attachments to
this Agreement, listed below, are an integral part of this Agreement:

 

	
  Attachment

  	
   

  	
  Description

  
	
  Attachment “1”

  	
   

  	
  [**]

  
	
  Attachment
  “2”

  	
   

  	
  Problem
  Report

  
	
  Attachment
  “3”

  	
   

  	
  Payment for
  Services

  
	
  Attachment
  “4”

  	
   

  	
  [**]

  
	
  Attachment
  “5”

  	
   

  	
  [**]

  
	
  Attachment
  “6”

  	
   

  	
  Training

  

 

** CONFIDENTIAL PORTION OMITTED
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2.             GRANT OF RIGHTS

 

2.1           Subject to the terms of this
Agreement, Digimarc hereby grants to Licensee a [**] license in the Field of
Use to use the [**], the Digimarc IPR and the [**] IPR at the [**] to:

 

(a)           [**];

 

(b)           [**];

 

(c)           [**]; and

 

(d)           [**] to [**].

 

2.2           For greater certainty, the
foregoing license applies [**].

 

2.3           Licensee shall not use the [**],
the Digimarc IPR or the [**] IPR at, or transfer the Digimarc IPR or [**] IPR
to, any place other than the [**].

 

2.4           Licensee acknowledges and agrees
that the Digimarc IPR, and any technology developed by Digimarc during the
course of its work with Licensee under this Agreement is the property of
Digimarc and that, except as otherwise expressly set out in this Agreement,
Licensee has no right to sublicense it. Licensee acknowledges that it may [**]
unless and until, and only during such period, that [**] is licensed therefore
by Digimarc.

 

2.5           Licensee acknowledges and agrees
that the [**] IPR is the property of its owner and that Licensee has no right
to sublicense it.

 

2.6           Nothing in this Agreement shall be
construed to grant, by implication or otherwise, any broader rights than those
specifically granted herein.

 

2.7           Digimarc shall obtain at its own
expense all licenses or permits required to be obtained from the Government of
the United States in order for Digimarc to comply with its obligations under
this Agreement including, without limitation, to deliver [**], and grant the
associated licenses to Licensee.

 

2.8           Digimarc shall inform Licensee
within thirty (30) days after the end of each calendar quarter during the Term
of all Improvements relating to [**] which Improvements Digimarc has made, or
caused or permitted to be made, during the course of its work with Licensee
under this Agreement.  Following the
provision of the information under this clause 2.8, Digimarc shall provide to
Licensee within a reasonable period of time following request, the Technical
Information for those Improvements requested by Licensee in writing.

 

2.9           Digimarc hereby grants to Licensee
a [**] license to use the Improvements described in clause 2.8 and in any
patents thereon owned or otherwise licenseable by Digimarc.  Such license shall continue until this
Agreement expires or is terminated or until Licensee has no further rights to
Digimarc IPR, whichever occurs last.

 

** CONFIDENTIAL PORTION OMITTED
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2.10         For greater certainty, the
obligations set out in clauses 2.8 and 2.9 shall not apply to any such
Improvements which Digimarc can demonstrate would have been made irrespective
of Digimarc’s work with Licensee under this Agreement.

 

3.             SERVICES

 

3.1   Digimarc shall ship [**] to the Licensee
within ten (10) Business Days after the Effective Date or after
instructions from the [**] whichever is later. The shipment shall be by air,
Cost, Insurance and Freight (C.I.F.) closest major airport (i.e., Digimarc
shall be responsible for transportation and insurance to this port of entry).

 

3.2   Digimarc shall provide Installation of the
[**] at Licensee’s [**] for the fees described in clause 4.  The Installation will take no more than ten (10) person
days, provided the site is prepared according to a site preparation guide to be
provided to Licensee by Digimarc reasonably prior to Installation.

 

3.3         Digimarc
shall provide the Training to Licensee within ten (10) Business Days after
completion of installation of the [**] or at such other time as the parties may
agree for the fees described in clause 4. 
The [**] training will be designed to be delivered by one trainer in
five days for up to two trainees, provided the trainees [**].

 

3.4           No later than sixty (60) Business
Days after every written request made by Licensee during the Term, Digimarc
shall provide Integration Support to Licensee on a date or dates agreed between
Digimarc and the Licensee for the fees described in clause 4.

 

3.5           Commencing no later than twenty
(20) Business Days after every written request made by Licensee during the
Term, Digimarc shall conduct Verification Tests of [**] on a date or dates
agreed between Digimarc and Licensee for the fees described in clause 4.

 

3.6           Commencing no later than five (5) Business
Days after every written request therefore made by Licensee during the Term,
Digimarc shall schedule Consulting Services, which Services shall commence not
less than thirty (30) Business Days after the written request or at such other
time agreed between Digimarc and Licensee.

 

3.7           Digimarc shall periodically
apprise Licensee of Improvements which Digimarc makes to the [**].  Rights to employ such Improvements shall
automatically be granted to Licensee pursuant to the terms of clause 2 at no additional
charge to Licensee.

 

4.             FEES

 

4.1           Licensee shall pay to Digimarc a
fee for the Services as detailed below. 
The fee for Services provided:

 

(a)           on or before 31 December [**],
is as set out in Attachment 3;

 

** CONFIDENTIAL PORTION OMITTED
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(b)           after 31 December [**], will
be no greater than the fee then paid to Digimarc for similar services by
Digimarc’s most favoured customer.

 

4.2           Except as otherwise expressly provided in this
Agreement, Licensee shall pay Digimarc all sales, use, goods and services or
other similar taxes levied by any government in the United States or [**]
principal place of business which Digimarc is obliged to collect and remit to
[**] in connection with any amount paid by Licensee to Digimarc under this
Agreement.

 

4.3           Digimarc is responsible for, and shall
indemnify Licensee against, and hold Licensee harmless from, the payment of all
taxes levied by any government on or in respect of Digimarc’s income and any amounts
required by law to be paid in respect of social benefits for Digimarc’s
employees relating to or arising out of the performance of the Services. If
required by law, Licensee shall deduct all such taxes and amounts from the
amounts otherwise payable to Digimarc and remit them to the appropriate
authorities.

 

5.             NUMBER NOT USED

 

6.             LICENSEE RESPONSIBILITIES

 

6.1           Licensee shall promptly report to Digimarc
every instance which comes to its attention of:

 

(i)            [**] to meet the specifications
established under the [**] Agreement in the form of the Problem Report attached
as Attachment 2;

 

(ii)           unauthorised access to the [**] in
the possession of Licensee; or

 

(iii)          [**]

 

6.2           Licensee shall inform Digimarc within thirty
(30) days after the end of each calendar quarter during the Term of all
improvements relating to (i) [**]; (ii) [**], (iii) [**] (iv) any
other part of the [**] has made, or caused or permitted to be made, as a result
of knowledge of Digimarc Confidential Information.  The first such information shall be provided
to Digimarc within thirty (30) days after the Effective Date and shall cover
improvements made from the date Licensee first learned of the Digimarc
Confidential Information. Following the provision of the information under this
clause 6.2, Licensee shall provide to Digimarc within a reasonable period of
time following request, the Technical Information for those improvements
requested by Digimarc in writing.

 

6.3           Licensee hereby grants to Digimarc a
royalty-free, non-exclusive, sub-licenseable worldwide license to use the
improvements described in clause 6.2 and in any patents thereon owned or
otherwise licenseable by Licensee.

 

6.4           Such license shall continue until this
Agreement expires or is terminated, or until Licensee has no further rights to
Digimarc IPR, whichever occurs last.

 

** CONFIDENTIAL PORTION OMITTED
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6.5           For greater certainty, the
obligations set out in clauses 6.2, 6.3, and 6.4 shall not apply to any such
improvement which the Licensee can demonstrate would have been made
irrespective of knowledge of the Digimarc Confidential Information.

 

6.6           Licensee shall, as directed by
[**], cooperate fully with [**] and/or Digimarc in all matters concerning testing
of [**] to confirm that they pass the Verification Tests.

 

7.             REPRESENTATIONS AND
WARRANTIES OF DIGIMARC.

 

7.1           General - Digimarc represents,
warrants and undertakes to Licensee that from and after the Effective Date:

 

(a)           the Services provided under this Agreement
will be of professional quality conforming to generally accepted practices for
like services and will be performed at all times in a timely and cost effective
manner and, for greater certainty Digimarc shall employ the standard of care in
performing the Services that would be expected of an [**] of the same or
similar type as the [**] which comprises the [**];

 

(b)           Digimarc is duly incorporated and organized
and is validly subsisting under the laws of the State of Delaware, U.S.A. or
some other state in the United States with full corporate power and authority
to enter into this Agreement;

 

(c)           to the best of its knowledge, neither this
Agreement nor the Services will contravene, breach, or result in any default
under any agreement, permit, by-law, or law or regulation to which Digimarc is
subject or by which it is bound including, for greater certainty any laws or
regulations in effect in the United States governing export;

 

(d)           this Agreement when executed and delivered by
Digimarc shall constitute a valid and binding agreement with Digimarc
enforceable against Digimarc according to its terms; and

 

(e)           Digimarc will at all material times have the
right to grant the licenses to the Digimarc IPR as required by this Agreement.

 

7.2           Digimarc represents, warrants and
undertakes to Licensee that:

 

(a)           [**] provided to Licensee hereunder will, for
a period of one hundred eighty (180) days following the date on [**] of the
[**] first commences, meet the specifications for that version of [**] accepted
by [**];

 

(b)           until the last day of the Term, [**]; and

 

(c)           incorporated as part of its installation and
integration practices and procedures are those measures and security procedures
commercially and reasonably available on the date for 

 

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

 

 

delivery of a component of [**] to search
for, detect and eliminate [**] viruses in [**] that could interfere with the
use of [**] or corrupt, interfere with or damage any data;

 

(d)           the [**] shall contain no lock, clock, timer,
counter, copy protection feature, replication device or intentional defects
(including but not limited to “viruses” or “worms” as such terms are commonly
used in the computer industry), CPU serial number reference, or other device
which might:

 

(i)            lock, disable or erase[**] or any data which
is loaded on [**] so as to prevent full use of [**] by authorized persons; or

 

(ii)           require action or intervention by Digimarc or
any other person to allow properly trained and authorized persons to use [**];

 

(e)           the source code for [**] will support the year
2000 and neither performance nor functionality will be affected by dates prior
to, during and after the year 2000, and , for greater certainty, the [**] will
switch to 1 January 2000 on 1 January 2000, and the year 2000 will be
recognized as a leap year.

 

7.3           If [**] fails to meet the relevant
Specifications then Digimarc shall, within thirty (30) days after receipt of
written notice of the failure from Licensee, on the form attached as Attachment
2, rectify the failure and provide a [**] to Licensee.

 

8.             REPRESENTATIONS AND
WARRANTIES OF LICENSEE

 

8.1           Licensee represents and warrants to Digimarc
that:

 

(a)           Licensee has full power and authority to enter
into this Agreement; and

 

(b)           this Agreement when executed and delivered by
Licensee shall constitute a valid, binding and enforceable obligation of
Licensee.

 

8.2           Licensee makes no representations, warranties
or undertakings that Licensee has any right to grant the licenses required to
be granted by clause 6.3 and Digimarc shall be solely responsible for
determining that such improvements are suitable for the intended use and for
the consequences of any use of the same whether by Digimarc or others, and Licensee
and hereby disclaims all liability in connection therewith.

 

9.             CONFIDENTIALITY

 

9.1           Except as otherwise expressly permitted by
this Agreement, a Recipient shall not use, 
reproduce or disclose the Confidential Information of the Discloser for
any purpose other than as reasonably necessary to comply with its obligations
under this Agreement or to exercise any rights or licenses granted to it under
or pursuant to this Agreement.

 

** CONFIDENTIAL PORTION OMITTED
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9.2           The Recipient shall protect the
Confidential Information of the Discloser from disclosure by using the same
degree of care, which shall be no less than a reasonable degree of care, as the
Recipient uses to protect its own confidential information.

 

9.3           On written request from the
Discloser, the Recipient shall return, or certify the destruction of, all
originals and copies of the Discloser’s Confidential Information in the
Recipient’s possession or control which the Recipient does not need to retain
in order to perform any obligations imposed, or exercise any rights acquired,
by this Agreement.

 

9.4           A Recipient may, on a need to know
basis, and only for the purposes described in clause 9.1, give the other party’s
Confidential Information to the Recipient’s employees or authorized
subcontractors provided that such employee or subcontractor shall have entered
into a non-disclosure agreement in respect of such Confidential Information in
favour of the Discloser on terms materially similar to the provisions of this
clause 9.

 

9.5           The obligations set out in this clause 9 will
not apply to any Confidential Information that:

 

(a)           is or becomes publicly available
other than through the fault of the Recipient;

 

(b)           was known to the Recipient prior
to disclosure as shown by documentation sufficient to establish such knowledge;

 

(c)           was or is lawfully disclosed to
the Recipient by a third party who did not breach any obligation of confidence
by such disclosure and who made the disclosure without restriction on further
disclosure all of which is shown by documentation sufficient to establish same;
or

 

(d)           is required by law to be disclosed
provided, however, that the Recipient shall first give written notice to the
Discloser before the disclosure so that the Discloser may seek an appropriate
protective order.

 

Notwithstanding
the foregoing, the fact that Confidential Information, or any part thereof, can
be linked together by a search of publications and other information, followed
by a selection of a series of such items of knowledge from unconnected sources,
and fitting together those items of knowledge so as to duplicate or recreate
any item of Confidential Information, shall not be deemed to cause the
Confidential Information, or any part thereof, to be included within exceptions
(a), (b) or (c), above.

 

9.6           The obligations of the parties
under this clause 9 will survive the Term or sooner termination of this
Agreement and will remain in full force and effect regardless of the cause of
any termination.

 

9.7           Nothing in this Agreement shall be construed to
require Licensee to disclose any information which is confidential to a third
party including for greater certainty a [**]

 

** CONFIDENTIAL PORTION OMITTED
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10.          INTELLECTUAL PROPERTY INDEMNIFICATION

 

10.1         Licensee shall provide Digimarc
with prompt written notice of any claim, demand or action against Licensee
based on an allegation that the Digimarc IPR or any part thereof, infringes any
Intellectual Property Right of any person (referred to below as a “Claim”).

 

10.2         Subject to the limitations set out in clauses
10.3 to 10.7 inclusive, Digimarc shall, at its own expense:

 

(a)           negotiate the resolution of any
such Claim;

 

(b)           pay all costs associated with the
Claim; and

 

(c)           defend any action based on the
Claim.

 

10.3         Licensee shall, at Digimarc’s
expense, comply with all reasonable requests by Digimarc for assistance from
Licensee in connection with the settlement or defense of the Claim.

 

10.4         Notwithstanding any other provision of this Agreement to the contrary,
but subject to the limitations in this clause 10, Digimarc shall indemnify
Licensee against and save Licensee harmless from all loss, costs, liabilities
including an award of damages, and expenses, including legal fees, arising from
each Claim first notified to Digimarc prior to 31 December [**].  The obligation set out in this clause 10
shall not apply in respect of any settlement made by Licensee without the consent
of Digimarc.

 

10.5         The liability of Digimarc under clause 10.4 of
this Agreement and under the equivalent clause of every other licence or
consulting agreement entered into between Digimarc and [**] and [**] pursuant
to the provisions of the [**] Agreement will not exceed the Indemnity Limit as
defined in clause 10.6 below.

 

10.6         The Indemnity Limit shall be [**], or such
higher amount as notified by Digimarc from time to time.

 

10.7         For the purposes of clauses 10.2 through 10.6 inclusive, “Claim” shall
mean any Claim, other than a Claim for patent infringement which Digimarc can
demonstrate occurred without Digimarc acting recklessly or negligently.

 

11.          TERM AND TERMINATION

 

11.1         This Agreement will take effect on
the Effective Date and will remain in force throughout the Term unless sooner
terminated as provided herein.

 

** CONFIDENTIAL PORTION OMITTED
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11.2                           Either party may terminate this
Agreement if the other party breaches any of its obligations under this
Agreement and fails to remedy such breach within thirty (30) days after
receiving written notice of such breach from the other party.

 

11.3                           Upon termination of this
Agreement:

 

(a)                                  all rights granted to Licensee
under this Agreement will immediately terminate. No interest in any such rights
will thereafter remain with Licensee, except that [**], but no further [**]
Licensee shall be permitted; and

 

(b)                                 each party shall return, or
certify the destruction of, to the Discloser, all originals and copies of the
Discloser’s Confidential Information in the party’s possession or control which
the party does not need to retain in order to exercise any rights acquired by
this Agreement.

 

11.4                           No termination of this Agreement
will in any manner release, or be construed as releasing, any party from any
liability arising out of or in connection with that party’s breach of or
failure to perform any covenant, duty or obligation contained herein prior to
the date of such termination.

 

11.5                           Upon termination of the [**]
Agreement by Digimarc for cause, the rights of Licensee hereunder to use the
Digimarc IPR shall be deemed to be restricted to the [**] as of the date of
such termination.

 

11.6                           Termination of the license between
Digimarc and [**] shall automatically act to terminate this Agreement.

 

12.                               DISPUTE RESOLUTION

 

12.1                           Any Dispute (as defined in the
Arbitration Agreement) shall be finally settled by arbitration in accordance
with the Arbitration Agreement.

 

12.2                           Unless otherwise agreed between
the parties or unless the subject matter of the dispute resolution proceedings
is a party’s right to terminate this Agreement, the Services shall continue
during the dispute resolution proceedings and payments due to Digimarc shall
not be withheld on account of such proceedings unless that particular services
or payment is the subject matter of the proceedings.  Notwithstanding the foregoing, Licensee may
in its sole discretion instruct Digimarc to continue to perform such services
which are the subject matter of the proceedings and Digimarc shall act in
accordance with those instructions, subject to payment under clause 4.1.

 

** CONFIDENTIAL PORTION OMITTED
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13.          MISCELLANEOUS PROVISIONS

 

13.1         Remedies Cumulative - Except as otherwise expressly
set out in this Agreement:

 

(a)           each and every right, power and remedy of a
party will be considered to be cumulative with and in addition to any other
right, power and remedy which such party may have at law or in equity in the
event of breach of any of the terms of this Agreement;

 

(b)           the exercise or partial exercise of any right,
power or remedy will neither constitute the exclusive election thereof nor the
waiver of any other right, power or remedy available to such party; and

 

(c)           a party terminating this Agreement in
accordance with the provisions of the Termination clause will have no liability
or obligation to the other as a result of or with respect to the termination.

 

13.2         All notices under this Agreement
shall be delivered by fax, or recognized [**] courier service.  The notice shall be deemed effective as of
the date of delivery to the address of the party specified below as evidenced
by a delivery receipt or the addressee’s registry of incoming
correspondence.  Unless otherwise
expressly set out in this Agreement, all notices to a party will be sent to the
party’s authorized representative identified below and all notices from a party
will be sent by the party’s authorized representative identified below.

 

13.3         Any notice to Licensee shall be
sent to both of, and any notice from Licensee shall be sent by either:

 

	
  Name 1

  	
   

  	
  Name 2

  
	
  Address 1

  	
   

  	
  Address 2

  

 

13.4         Any notice to Digimarc shall be
sent to both of, and any notice from Digimarc shall be sent by either:

 

	
  Mr. Robert
  Chamness

  	
   

  	
  Mr. Scott
  Carr

  
	
  Vice
  President and General Counsel

  	
   

  	
  President
  [**]

  
	
  Digimarc
  Corporation

  	
   

  	
  Digimarc
  Corporation

  
	
  9405 SW
  Gemini Drive

  	
   

  	
  9405 SW
  Gemini Drive

  
	
  Beaverton,
  OR 97008

  	
   

  	
  Beaverton,
  OR 97008

  
	
  Fax: (503)
  469-4777

  	
   

  	
  Fax: (503) 469-4777

  

 

13.5         A copy of every notice sent by
either party shall be sent to: [**].

 

13.6         A party may change its address for
notice by notice to the other party in accordance with the foregoing
provisions.

 

13.7         Severability. 
  If any part of this Agreement is held by an arbitral tribunal
appointed pursuant to the Arbitration Agreement or other competent authority to
be void or unenforceable, 

 

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

 

 

the parties
agree that such determination will not result in the nullity or
unenforceability of the remaining parts of this Agreement, which will continue
in force to the fullest extent permitted by law.  The parties further agree to replace such void
or unenforceable part of this Agreement with a valid and enforceable provision
that will achieve, to the extent legally permissible, the economic, business
and other purposes of the void or unenforceable part.

 

13.8         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.

 

13.9         Entire Agreement.  
This Agreement is intended by the parties to be the final expression of
their agreement and constitutes and embodies the entire agreement and
understanding between the parties hereto and constitutes a complete and
exclusive statement of the terms and conditions thereof, and will supersede any
and all prior correspondence, conversations, negotiations, agreements or
understandings relating to the same subject matter.

 

13.10       Amendments.  
No change in, modification of or addition to the terms and conditions
contained herein will be valid as between the parties unless set forth in a
writing that is signed by an authorized representative of each of the parties
and which specifically states that it constitutes an amendment to this
Agreement.

 

13.11       Waiver.   
No waiver of any term, provision, or condition of this Agreement, will
be effective unless in a written document signed by the waiving party and no
such waiver in any one or more instances, will be deemed to be, or be construed
as, a further or continuing waiver of that term, provision or condition or any
other term, provision or condition of this Agreement.

 

13.12       Assignment and Successors.  
This Agreement may not be assigned by Licensee without Digimarc’s
consent, which consent shall not be unreasonably withheld or delayed.  This Agreement and all of its terms,
conditions and covenants are intended to be fully effective and binding, to the
extent permitted by law, on the successors and permitted assigns of the parties
hereto.

 

13.13       Captions.  
Captions are provided in this Agreement for convenience only and they
form no part, and are not to serve as a basis for interpretation or
construction, of this Agreement, nor as evidence of the intention of the parties
hereto.

 

13.14       Disclaimer of Agency.   
Nothing contained in this Agreement is intended or will be construed so
as to constitute the parties to this Agreement as partners or joint venturers
or as agents of each other. Neither party will have any express or implied
right or authority to assume or create any obligations on behalf of or in the
name of the other party or to bind any other party in any contract, agreement
or undertaking with any third party.  No
employee of a party shall be deemed or considered to be an employee of the
other party or of both parties.

 

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

 

 

13.15       Publicity.   The parties agree that from time-to-time it
will be beneficial to both parties to issue [**] and [**] from the [**].  Each party agrees to submit for approval by
the other party any [**] that involves the other party, which approval shall
not unreasonably be withheld.

 

13.16       Effectiveness.  
This Agreement shall not be effective until it is signed by both of the
parties.

 

13.17       Ambiguities. 
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 shall not apply in
interpreting this Agreement.

 

13.18       Survival.  
All clauses of this Agreement which expressly or by implication are
intended to survive the termination of this Agreement will do so and, for
greater certainty and notwithstanding any provision in this Agreement to the
contrary, the provisions of clause 2.9, 4.2, 4.3, 6.1, 6.3, 6.4, 7.2(b), 9, 10,
12 and 13 of this Agreement shall survive termination of this Agreement by
either party for any reason.

 

IN WITNESS
WHEREOF, this Agreement has been executed and delivered by the parties hereto
as of the Effective Date.

 

	
  DIGIMARC
  CORPORATION

  	
   

  	
  <Licensee>

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
  By:

  	
   

  
	
  Name:

  	
   

  	
   

  	
  Name:

  	
   

  
	
  Title:

  	
   

  	
   

  	
  Title:

  	
   

  
	
  Date:

  	
   

  	
   

  	
  Date:

  	
   

  

 

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

 

 

ATTACHMENT 1

 

[**]

 

[**] will
cause the following [**] to take place:

 

(a)           [**]

 

(b)           [**]

 

(c)           [**] a date TBD [**]

 

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

 

 

ATTACHMENT 2

 

PROBLEM REPORT

 

Each problem
report will contain all information necessary to reproduce or demonstrate the
occurrence of the problem.  Problem
reports will [**] and will be delivered electronically in a format to be
provided by Digimarc.

 

Problem
reports will contain:

 

·                                          Date problem was encountered

·                                          Detailed description of the problem, including the
frequency with which the problem occurs

·                                          Name and [**] the problem

·                                          Step by step instructions to reproduce the problem

·                                          All data files required to reproduce the problem

·                                          [**]

·                                          Severity of problem

·                                          Contact information for person to contact for further
information (name, phone number, FAX number, email address)

 

Licensee
agrees to work with Digimarc to provide reasonable additional information and
perform reasonable additional tests, as requested by Digimarc, to assist
Digimarc in resolution of the problem.

 

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

 

 

ATTACHMENT 3

 

PAYMENT FOR SERVICES

 

Digimarc shall bill Licensee for Services in one hour increments at the
following hourly rates:

 

	
  Technical/Design
  Consultant

  	
   

  	
  [**]

  	
   

  
	
  Senior
  Engineer

  	
   

  	
  [**]

  	
   

  
	
  R&D/Engineering
  Executive

  	
   

  	
  [**]

  	
   

  
	
  Project
  Manager

  	
   

  	
  [**]

  	
   

  
	
  Administrator/Scheduler

  	
   

  	
  [**]

  	
   

  

 

Fees for Services will be invoiced on the earlier of 1) the last day of
the month or 2) the completion of the Services. 
Invoices are due thirty (30) days from the date of receipt of a correct
invoice.  A late charge of 1.5% per month
will be charged on any late payments. 
All fees are due and payable in [**].

 

Licensee will reimburse Digimarc for all out-of-pocket expenses
reasonably and necessarily incurred in providing the Services.  Expenses will be itemized and reported by
category.  Out-of-pocket expenses will
not be “marked up” by Digimarc.  Costs
include, but are not limited to, reasonable travel and lodging expenses,
telephone and fax charges, postage and overnight deliveries, and charges for
rental equipment or materials purchased specifically to be used in providing
the Service.  All invoices for
out-of-pocket expenses will be issued monthly in arrears and are due thirty
(30) days from the date of receipt of a correct invoice. Supporting receipts
and vouchers will be available for review at Digimarc’s offices.  A late charge of 1.5% per month will be
charged on any late payments.  Payments
will additionally include Value Added taxes and other tariffs and fees that may
be imposed [**].

 

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

 

 

ATTACHMENT 4

 

[**]

 

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

 

 

ATTACHMENT 5

 

IDENTIFICATION OF [**]

 

**  CONFIDENTIAL PORTION OMITTED AND FILED
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ATTACHMENT 6

 

TRAINING

 

	
  1.0

  	
   

  	
  As part of
  the [**], Digimarc shall develop a program of training acceptable to the [**]  Project
  Director (as defined in the [**] Agreement) in the [**].

  
	
   

  	
   

  	
   

  
	
  2.0

  	
   

  	
  Digimarc
  shall deliver the Training as follows:

  
	
   

  	
   

  	
   

  
	
  2.1

  	
   

  	
  Digimarc
  shall provide the Training to up to two (2) people simultaneously. The
  trainees will be experienced in digital design system operation.

  
	
   

  	
   

  	
   

  
	
  2.2

  	
   

  	
  Digimarc
  shall conduct the Training at the [**] or, at the request of Licensee, at
  Digimarc’s [**] or at some other place agreed between Digimarc and Licensee.

  
	
   

  	
   

  	
   

  
	
  2.3

  	
   

  	
  Digimarc
  shall give Licensee reasonable notice concerning the equipment which Digimarc
  will require in order to conduct the Training. Licensee shall provide all
  such equipment at its own expense. If the parties are unable to agree on the
  equipment to be provided either party may refer the matter for decision to
  the DLA Contract Authority (as defined in the [**] Agreement).

  
	
   

  	
   

  	
   

  
	
  2.4

  	
   

  	
  Digimarc
  shall conduct the Training using the [**].

  
	
   

  	
   

  	
   

  
	
  2.5

  	
   

  	
  Digimarc
  shall provide a training manual [**] to every trainee. Any [**] which the
  trainees may require will be provided by Licensee at its own expense.

  
	
   

  	
   

  	
   

  
	
  2.6

  	
   

  	
  Digimarc
  shall provide each trainee with a certificate of training at the completion
  of the Training session.

  
	
   

  	
   

  	
   

  
	
  2.7

  	
   

  	
  Digimarc
  shall conduct the Training [**].

  

 

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

 

 

SCHEDULE “L-2”

 

[**]
AGREEMENT [**]

 

This [**]LICENSE
AGREEMENT (the “Agreement”) is
made

BETWEEN

 

<name
and address of Licensee> (“Licensee”)

 

-
AND -

 

DIGIMARC
CORPORATION, a corporation
incorporated under the laws of Delaware and having its head office at 9405 SW
Gemini Drive, Beaverton, Oregon. U.S.A. 
97006 (“Digimarc”)

 

[**]

RECITALS

 

Digimarc has
expertise in, and owns extensive intellectual property, including patents,
patent applications, copyrights and trade secrets related to digital
watermarks, [**], copyright protection, and device control;

 

[**]possesses
or will possess intellectual property rights related to the application of such
intellectual property [**]; and

 

Digimarc and
[**] have cooperated in the development of means, using such intellectual
property, [**]; and

 

Digimarc is
licensing its [**] authorized by a duly licensed[**]; and

 

Licensee,
having been authorized by a duly licensed [**], desires access to such
technology so that Licensee can include Digimarc’s [**].

 

In
consideration of these premises, the
covenants set out in this Agreement and for other good and valuable
consideration, the receipt and adequacy of which are acknowledged by each of
the parties, the parties agree as follows:

 

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

 

 

1.                                      DEFINITIONS  AND PRINCIPLES OF INTERPRETATION

 

In this Agreement:

 

“Agreement” means these
articles of agreement, including the Attachments, and those documents as
specified or referenced in this Agreement as forming part of the Agreement, all
as may be amended from time to time;

 

“Arbitration Agreement” means
the Arbitration Agreement entered into between the parties and others effective
1 January [**], as amended from time to time;

 

“Attachment” means a document
specified as being attached to this Agreement;

 

[**]

“Business Day” means a day on which both Digimarc and Licensee are open for
business at their respective addresses noted above;

 

“Confidential Information” means information disclosed before or during
the Term of this Agreement in any form which, if disclosed in tangible form, is
or was labeled “Confidential”, “Proprietary” or with a similar legend, or if
disclosed orally is or was information that by its nature would be understood
to be confidential to the Discloser. For greater certainty, the Confidential
Information of Digimarc includes the Digimarc IPR and the [**]

 

[**]

“Consulting Services” means the Integration Support and all other services that Digimarc
provides to Licensee regarding [**], and such other matters as Licensee may
request and Digimarc agrees to provide, pursuant to this Agreement;

 

“Digimarc IPR” means Intellectual Property Rights owned by
Digimarc, now or during the Term of this Agreement, to the extent that same
specifically relates to or forms part of [**];

 

“Digital [**]” refers to [**] (including [**]) that are
[**] from [**] by [**] of [**], which [**] of [**] and yet do not significantly
[**] from the aesthetics of the [**] or [**] thereby. Examples include, but are
not limited to:

 

1.               generally imperceptible changes to
[**] or placement in [**];

2.               [**] of a substrate, where the
[**] substantially uniform to human touch;

3.               slight localized changes to [**]
or [**] of a printed document;

4.               slight changes to [**]; or

5.               [**] of substantially [**].

 

“Discloser” means a party that has disclosed or otherwise made available its Confidential
Information to the other party;

 

[**]

 

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

 

 

“Effective Date” means the later of the date on which this Agreement is last signed by
the parties and the date on which Digimarc receives written notice from the
[**]that the Licensee is authorized to [**]

 

[**]

“Field of Use” means the field of [**];

 

“Improvement” means an improvement provided to [**] under clause 2.14 of the [**] Agreement;

 

“Installation” means
installation of the Digimarc [**]in accordance with in the design work flow of
the Licensee.

 

“Integration Support” means the consulting and programming services to be provided by
Digimarc to Licensee to assist Licensee to [**];

 

“Intellectual Property Rights” or “IPR” means
all intellectual property rights existing now and in the future including,
without limitation, trade secrets, copyright, database rights, know-how,
topographies, patents and patent applications;

 

“[**]” means the [**] named above;

 

[**]

“Recipient” means the party to which the Confidential
Information of the other party has been disclosed or otherwise made available;

 

“Services” means the Installation, Verification Tests,
the Training, and the Consulting Services, or any of them;

 

“Term” means the period commencing on the Effective
Date and ending on the earlier of 31 December [**] or the date of
termination of this Agreement;

 

“Training” means the training in the use of the [**]described
in Attachment 7; and

 

“Verification Test” means a test or tests developed under the [**] Agreement to
determine [**].

 

	
  1.2

  	
  Interpretation
  - In this Agreement:

  
	
   

  	
   

  
	
  1.2.1

  	
  unless
  otherwise specified, all references to money amounts are to the currency of
  the United States of America;

  
	
   

  	
   

  
	
  1.2.2

  	
  the use of
  words in the singular or plural, or with a particular gender, shall not limit
  the scope or exclude the application of any provision of this Agreement to
  such person or persons or circumstances as the context otherwise permits;

  

 

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

 

 

1.2.3                      whenever a provision of this
Agreement requires an approval or consent by a party to this Agreement and
notice of such approval or consent is not delivered within the applicable time,
then, the party shall be conclusively deemed to have withheld the consent or
approval;

 

1.2.4                      unless otherwise specified, the
number of days within or following which any payment is to be made or act is to
be done shall be interpreted to be continuous and shall be calculated by
excluding the day on which the period commences and including the day which
ends the period and by extending the period to the next Business Day if the
last day of the period is not a Business Day;

 

1.2.5                      unless otherwise specified, the
order of precedence for interpreting this Agreement shall be:

 

(a)                                this Agreement, excluding
Attachments, and

 

(b)                               the Attachments;

 

1.2.6                      for greater certainty, a party or
representative to which this Agreement grants the right to make a decision or
determination in the sole discretion of the party or representative is not
required to act reasonably in making the decision or determination and no such
decision or determination may be challenged by the other party under the
Arbitration Agreement or otherwise;

 

1.2.7                      the words “includes” or “including”
will be construed as meaning “included without limitation” and “including
without limitation” as the case may be; and

 

1.2.8                      a clause or Attachment, unless the
context requires otherwise, is a reference to a clause to, an Attachment of, or
a paragraph of an Attachment to, this Agreement, as amended from time to time
in accordance with this Agreement.

 

1.3                               Applicable Law - This Agreement shall
be construed in accordance with the laws of England to the exclusion of its rules of
conflicts of laws.

 

1.4                               Attachments - The attachments to
this Agreement, listed below, are an integral part of this Agreement:

 

	
  Attachment

  	
   

  	
  Description

  
	
  Attachment
  “1”

  	
   

  	
  [**]

  
	
  Attachment
  “2”

  	
   

  	
  Opinion of
  Counsel

  
	
  Attachment
  “3”

  	
   

  	
  Problem
  Report

  
	
  Attachment
  “4”

  	
   

  	
  Payment for
  Services

  
	
  Attachment
  “5”

  	
   

  	
  [**]

  
	
  Attachment
  “6”

  	
   

  	
  [**]

  
	
  Attachment
  “7”

  	
   

  	
  Training

  

 

**  CONFIDENTIAL PORTION OMITTED AND FILED
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  2.

  	
  GRANT OF RIGHTS

  
	
   

  	
   

  
	
  2.1

  	
  Subject to
  the terms of this Agreement, Digimarc hereby grants to Licensee a [**]
  license in the Field of Use to use the [**], the Digimarc IPR and [**]  IPR
  at the [**]to:

  
	
   

  	
   

  
	
  (a)

  	
  [**]

  
	
   

  	
   

  
	
  (b)

  	
  [**]

  
	
   

  	
   

  
	
  (c)

  	
  [**]; and

  
	
   

  	
   

  
	
  (d)

  	
  [**] to
  [**].

  
	
   

  	
   

  
	
  2.2

  	
  For greater
  certainty, the foregoing license applies [**]

  
	
   

  	
   

  
	
  2.3

  	
  Licensee
  shall not use the[**], the Digimarc IPR or the [**]IPR at, or transfer the
  Digimarc IPR or [**]IPR to, any place other than the [**].

  
	
   

  	
   

  
	
  2.4

  	
  Licensee
  acknowledges and agrees that the Digimarc IPR, and any technology developed
  by Digimarc during the course of its work with Licensee under this Agreement
  is the property of Digimarc and that, except as otherwise expressly set out
  in this Agreement, Licensee has no right to sublicense it. Licensee
  acknowledges that it may [**]unless and until, and only during such period,
  that [**]is licensed therefore by Digimarc.

  
	
   

  	
   

  
	
  2.5

  	
  Licensee
  acknowledges and agrees that the [**]IPR is the property of its owner and
  that Licensee has no right to sublicense it.

  
	
   

  	
   

  
	
  2.6

  	
  Nothing in
  this Agreement shall be construed to grant, by implication or otherwise, any
  broader rights than those specifically granted herein.

  
	
   

  	
   

  
	
  2.7

  	
  Digimarc
  shall obtain at its own expense all licenses or permits required to be
  obtained from the Government of the United States in order for Digimarc to
  comply with its obligations under this Agreement including, without
  limitation, to deliver [**], and grant the foregoing licenses to Licensee.

  
	
   

  	
   

  
	
  2.8

  	
  Digimarc
  shall inform Licensee within thirty (30) days after the end of each calendar
  quarter during the Term of all Improvements relating to [**]which
  Improvements Digimarc has made, or caused or permitted to be made, during the
  course of its work with Licensee under this Agreement. Following the
  provision of the information under this clause 2.8, Digimarc shall provide to
  Licensee within a reasonable period of time following request, the Technical
  Information for those Improvements requested by Licensee in writing.

  

 

**  CONFIDENTIAL PORTION OMITTED AND FILED
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  2.9

  	
  Digimarc
  hereby grants to Licensee a [**] license to use the Improvements described in
  clause 2.8 and in any patents thereon owned or otherwise licenseable by
  Digimarc. Such license shall continue until this Agreement expires or is
  terminated or until Licensee has no further rights to Digimarc IPR, whichever
  occurs last.

  
	
   

  	
   

  
	
  2.10

  	
  For greater
  certainty, the obligations set out in clauses 2.8 and 2.9 shall not apply to
  any such Improvements which Digimarc can demonstrate would have been made
  irrespective of Digimarc’s work with Licensee under this Agreement.

  
	
   

  	
   

  
	
  3.

  	
  SERVICES

  
	
   

  	
   

  
	
  3.1

  	
  Digimarc shall ship [**]to
  the Licensee within ten (10) Business Days after the Effective Date or
  after instructions from the [**]whichever is later. The shipment shall be by
  air, Cost, Insurance and Freight (C.I.F.) closest major airport (i.e.,
  Digimarc shall be responsible for transportation and insurance to this port
  of entry).

  
	
   

  	
   

  
	
  3.2

  	
  Digimarc shall provide
  Installation of the [**] at Licensee’s [**]for the fees described in clause
  4. The Installation will take no more than ten (10) person days,
  provided the site is prepared according to a site preparation guide to be
  provided to Licensee by Digimarc reasonably prior to Installation.

  
	
   

  	
   

  
	
  3.3

  	
  Digimarc shall provide the
  Training to Licensee within ten (10) Business Days after completion of
  installation of the [**]or at such other time as the parties may agree for
  the fees described in clause 4. The [**]training will be designed to be
  delivered by one trainer in five days for up to two trainees, provided the
  trainees [**].

  
	
   

  	
   

  
	
  3.4

  	
  No later
  than sixty (60) Business Days after every written request made by Licensee
  during the Term, Digimarc shall provide Integration Support to Licensee on a
  date or dates agreed between Digimarc and Licensee for the fees described in
  clause 4.

  
	
   

  	
   

  
	
  3.5

  	
  Commencing
  no later than twenty (20) Business Days after every written request made by
  Licensee during the Term, Digimarc shall conduct Verification Tests of [**]on
  a date or dates agreed between Digimarc and Licensee for the fees described
  in clause 4.

  
	
   

  	
   

  
	
  3.6

  	
  Commencing
  no later than five (5) Business Days after every written request made by
  Licensee during the Term, Digimarc shall schedule Consulting Services, which
  Services shall commence not less than thirty (30) Business Days after the
  written request or at such other time agreed between Digimarc and Licensee.

  
	
   

  	
   

  
	
  3.7

  	
  Digimarc
  shall periodically apprise Licensee of Improvements which Digimarc makes to
  the[**]. Rights to employ such Improvements shall automatically be granted to
  Licensee pursuant to the terms of clause 2 at no additional charge to
  Licensee.

  

 

**  CONFIDENTIAL PORTION OMITTED AND FILED
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  4.

  	
  FEES

  
	
   

  	
   

  
	
  4.1

  	
  Licensee
  shall pay to Digimarc a fee for the Services as detailed below. The fee for
  Services provided:

  
	
   

  	
   

  
	
  (a)

  	
  on or
  before 31 December [**], is as set out in Attachment 4;

  
	
   

  	
   

  
	
  (b)

  	
  after 31
  December [**], will be no greater than the fee then paid to Digimarc for
  similar services by Digimarc’s most favoured customer.

  
	
   

  	
   

  
	
  4.2

  	
  Except as
  otherwise expressly provided in this Agreement, Licensee shall pay Digimarc
  all sales, use, goods and services or other similar taxes levied by any
  government in the United States or [**] principal place of business which
  Digimarc is obliged to collect and remit to [**] in connection with any
  amount paid by Licensee to Digimarc under this Agreement.

  
	
   

  	
   

  
	
  4.3

  	
  Digimarc is
  responsible for, and shall indemnify Licensee against, and hold Licensee
  harmless from, the payment of all taxes levied by any government on or in
  respect of Digimarc’s income and any amounts required by law to be paid in
  respect of social benefits for Digimarc’s employees relating to or arising
  out of the performance of the Services. If required by law, Licensee shall
  deduct all such taxes and amounts from the amounts otherwise payable to
  Digimarc and remit them to the appropriate authorities.

  
	
   

  	
   

  
	
  5.

  	
  OPINION OF COUNSEL

  
	
   

  	
   

  
	
  5.1

  	
  Before
  producing [**], Licensee shall obtain and forward to Digimarc a written
  opinion of counsel substantially in the form attached as Attachment 2 that
  confirms:

  
	
   

  	
   

  
	
  (a)

  	
  the
  validity and enforceability of the terms of this Agreement under the laws of
  the jurisdiction of Licensee’s principal place of business; and

  
	
   

  	
   

  
	
  (b)

  	
  the
  legality of each of the [**]under the laws of the jurisdiction of Licensee’s
  principal place of business.

  
	
   

  	
   

  
	
  5.2

  	
  Digimarc
  shall not unreasonably withhold its consent to any qualifications which
  Licensee’s counsel may require to be made to such opinion.

  
	
   

  	
   

  
	
  6.

  	
  LICENSEE RESPONSIBILITIES

  
	
   

  	
   

  
	
  6.1

  	
  Licensee
  shall promptly report to Digimarc every instance which comes to its attention
  of:

  
	
   

  	
  (i)

  	
  [**]to meet
  the specifications established under the [**] Agreement in the form of the
  Problem Report attached as Attachment 3;

  
	
   

  	
   

  	
   

  
	
   

  	
  (ii)

  	
  unauthorised
  access to the [**]in the possession of Licensee; or

  
	
   

  	
   

  	
   

  
	
   

  	
  (iii)

  	
  [**]

  

 

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  6.2

  	
  Licensee
  shall inform Digimarc within thirty (30) days after the end of each calendar
  quarter during the Term of all improvements relating to
  (i) [**](ii) [**](iii) [**]and (iv) any other part of the
  [**] has made, or caused or permitted to be made, as a result of knowledge of
  Digimarc Confidential Information. The first such information shall be
  provided to Digimarc within thirty (30) days after the Effective Date and
  shall cover improvements made from the date Licensee first learned of the
  Digimarc Confidential Information. Following the provision of the information
  under this clause 6.2, Licensee shall provide to Digimarc within a reasonable
  period of time following request, the Technical Information for those
  improvements requested by Digimarc in writing.

  
	
   

  	
   

  
	
  6.3

  	
  Licensee
  hereby grants to Digimarc a royalty-free, non-exclusive, sub-licenseable
  worldwide license to use the improvements described in clause 6.2 and in any
  patents thereon owned or otherwise licenseable by Licensee.

  
	
   

  	
   

  
	
  6.4

  	
  Such
  license shall continue until this Agreement expires or is terminated, or
  until Licensee has no further rights to Digimarc IPR, whichever occurs last.

  
	
   

  	
   

  
	
  6.5

  	
  For greater
  certainty, the obligations set out in clauses 6.2, 6.3, and 6.4 shall not
  apply to any such improvement which the Licensee can demonstrate would have
  been made irrespective of knowledge of the Digimarc Confidential Information.

  
	
   

  	
   

  
	
  6.6

  	
  Licensee
  shall, as directed by[**], cooperate fully with [**]and/or Digimarc in all
  matters concerning testing of [**] to confirm that they pass the Verification
  Tests.

  
	
   

  	
   

  
	
  7.

  	
  REPRESENTATIONS AND WARRANTIES OF DIGIMARC.

  
	
   

  	
   

  
	
  7.1

  	
  General -
  Digimarc represents, warrants and undertakes to Licensee that from and after
  the Effective Date:

  
	
   

  	
   

  
	
  (a)

  	
  the
  Services provided under this Agreement will be of professional quality
  conforming to generally accepted practices for like services and will be
  performed at all times in a timely and cost effective manner and, for greater
  certainty Digimarc shall employ the standard of care in performing the
  Services that would be expected of an [**] of the same or similar type as the
  [**]which comprises the [**];

  
	
   

  	
   

  
	
  (b)

  	
  Digimarc is
  duly incorporated and organized and is validly subsisting under the laws of
  the State of Delaware, U.S.A. or some other state in the United States with
  full corporate power and authority to enter into this Agreement;

  
	
   

  	
   

  
	
  (c)

  	
  to the best
  of its knowledge, neither this Agreement nor the Services will contravene,
  breach, or result in any default under any agreement, permit, by-law, or law
  or regulation to which Digimarc is subject or by which it is bound including,
  for greater certainty any laws or regulations in effect in the United States
  governing export;

  

 

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  (d)

  	
  this
  Agreement when executed and delivered by Digimarc shall constitute a valid
  and binding agreement with Digimarc enforceable against Digimarc according to
  its terms; and

  
	
   

  	
   

  
	
  (e)

  	
  Digimarc
  will at all material times have the right to grant the licenses to the
  Digimarc IPR as required by this Agreement.

  
	
   

  	
   

  
	
  7.2

  	
  Digimarc
  represents, warrants and undertakes to Licensee that:

  
	
   

  	
   

  
	
  (a)

  	
  [**]provided
  to Licensee hereunder will, for a period of one hundred eighty (180) days
  following the date on [**] of the [**] first commences, meet the
  specifications for that version of [**] accepted by [**];

  
	
   

  	
   

  
	
  (b)

  	
  until the
  last day of the Term, [**]; and

  
	
   

  	
   

  
	
  (c)

  	
  incorporated
  as part of its installation and integration practices and procedures are
  those measures and security procedures commercially and reasonably available
  on the date for delivery of a component of [**]to search for, detect and eliminate
  [**]viruses in [**]that could interfere with the use of [**]or corrupt,
  interfere with or damage any data;

  
	
   

  	
   

  
	
  (d)

  	
  [**]shall
  contain no lock, clock, timer, counter, copy protection feature, replication
  device or intentional defects (including but not limited to “viruses” or
  “worms” as such terms are commonly used in the computer industry), CPU serial
  number reference, or other device which might:

  
	
   

  	
   

  
	
   

  	
  (i)

  	
  lock,
  disable or erase [**]or any data which is loaded on [**]so as to prevent full
  use of [**]by authorized persons; or

  
	
   

  	
   

  	
   

  
	
   

  	
  (ii)

  	
  require
  action or intervention by Digimarc or any other person to allow properly
  trained and authorized persons to use [**];

  
	
   

  	
   

  
	
  (e)

  	
  the source
  code for [**]will support the year 2000 and neither performance nor functionality
  will be affected by dates prior to, during and after the year 2000, and, for
  greater certainty, the [**]will switch to 1 January 2000 on 1
  January 2000, and the year 2000 will be recognized as a leap year.

  
	
   

  	
   

  
	
  7.3

  	
  If
  [**]fails to meet the relevant Specifications then Digimarc shall, within
  thirty (30) days after receipt of written notice of the failure from
  Licensee, on the form attached as Attachment 3, rectify the failure and
  provide a [**]to Licensee.

  
	
   

  	
   

  
	
  8.

  	
  REPRESENTATIONS AND WARRANTIES OF LICENSEE

  
	
   

  	
   

  
	
  8.1

  	
  Licensee
  represents and warrants to Digimarc that:

  
	
   

  	
   

  
	
  (a)

  	
  Licensee
  has full power and authority to enter into this Agreement; and

  

 

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  (b)

  	
  this
  Agreement when executed and delivered by Licensee shall constitute a valid,
  binding and enforceable obligation of Licensee.

  
	
   

  	
   

  
	
  8.2

  	
  Licensee
  makes no representations, warranties or undertakings that Licensee has any
  right to grant the licenses required to be granted by clause 6.3 and Digimarc
  shall be solely responsible for determining that such improvements are
  suitable for the intended use and for the consequences of any use of the same
  whether by Digimarc or others, and Licensee and hereby disclaims all
  liability in connection therewith.

  
	
   

  	
   

  
	
  9.

  	
  CONFIDENTIALITY

  
	
   

  	
   

  
	
  9.1

  	
  Except as
  otherwise expressly permitted by this Agreement, a Recipient shall not use,
  reproduce or disclose the Confidential Information of the Discloser for any
  purpose other than as reasonably necessary to comply with its obligations
  under this Agreement or to exercise any rights or licenses granted to it
  under or pursuant to this Agreement.

  
	
   

  	
   

  
	
  9.2

  	
  The
  Recipient shall protect the Confidential Information of the Discloser from
  disclosure by using the same degree of care, which shall be no less than a
  reasonable degree of care, as the Recipient uses to protect its own
  confidential information.

  
	
   

  	
   

  
	
  9.3

  	
  On written
  request from the Discloser, the Recipient shall return, or certify the destruction
  of, all originals and copies of the Discloser’s Confidential Information in
  the Recipient’s possession or control which the Recipient does not need to
  retain in order to perform any obligations imposed, or exercise any rights
  acquired, by this Agreement.

  
	
   

  	
   

  
	
  9.4

  	
  A Recipient
  may, on a need to know basis, and only for the purposes described in clause
  9.1, give the other party’s Confidential Information to the Recipient’s
  employees or authorized subcontractors provided that such employee or
  subcontractor shall have entered into a non-disclosure agreement in respect
  of such Confidential Information in favour of the Discloser on terms
  materially similar to the provisions of this clause 9.

  
	
   

  	
   

  
	
  9.5

  	
  The
  obligations set out in this clause 9 will not apply to any Confidential
  Information that:

  
	
   

  	
   

  
	
  (a)

  	
  is or
  becomes publicly available other than through the fault of the Recipient;

  
	
   

  	
   

  
	
  (b)

  	
  was known
  to the Recipient prior to disclosure as shown by documentation sufficient to
  establish such knowledge;

  
	
   

  	
   

  
	
  (c)

  	
  was or is
  lawfully disclosed to the Recipient by a third party who did not breach any
  obligation of confidence by such disclosure and who made the disclosure
  without restriction on further disclosure all of which is shown by
  documentation sufficient to establish same; or

  

 

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  (d)

  	
  is required
  by law to be disclosed provided, however, that the Recipient shall first give
  written notice to the Discloser before the disclosure so that the Discloser
  may seek an appropriate protective order.

  
	
   

  	
   

  
	
   

  	
  Notwithstanding
  the foregoing, the fact that Confidential Information, or any part thereof,
  can be linked together by a search of publications and other information,
  followed by a selection of a series of such items of knowledge from
  unconnected sources, and fitting together those items of knowledge so as to
  duplicate or recreate any item of Confidential Information, shall not be
  deemed to cause the Confidential Information, or any part thereof, to be
  included within exceptions (a), (b) or (c), above.

  
	
   

  	
   

  
	
  9.6

  	
  The
  obligations of the parties under this clause 9 will survive the Term or
  sooner termination of this Agreement and will remain in full force and effect
  regardless of the cause of any termination.

  
	
   

  	
   

  
	
  9.7

  	
  Nothing in this Agreement shall be construed to require Licensee to
  disclose any information which is confidential to a third party including for greater
  certainty a [**].

  
	
   

  	
   

  
	
  10.

  	
  INTELLECTUAL
  PROPERTY INDEMNIFICATION

  
	
   

  	
   

  
	
  10.1

  	
  Licensee shall provide
  Digimarc with prompt written notice of any claim, demand or action against Licensee based on an allegation that the Digimarc IPR
  or any part thereof, infringes any Intellectual Property Right of any person
  (referred to below as a “Claim”).

  
	
   

  	
   

  
	
  10.2

  	
  Subject to the limitations set out in clauses 10.3 to 10.7 inclusive,
  Digimarc shall, at its own expense:

  
	
   

  	
   

  
	
  (a)

  	
  negotiate the resolution of
  any such Claim;

  
	
   

  	
   

  
	
  (b)

  	
  pay all costs associated with
  the Claim; and

  
	
   

  	
   

  
	
  (c)

  	
  defend any action based on the
  Claim.

  
	
   

  	
   

  
	
  10.3

  	
  Licensee shall, at Digimarc’s
  expense, comply with all reasonable requests by Digimarc for assistance from
  Licensee in connection with the settlement or defence of the Claim.

  
	
   

  	
   

  
	
  10.4

  	
  Notwithstanding any other
  provision of this Agreement to the contrary, but subject to the limitations
  in this clause 10, Digimarc shall
  indemnify Licensee against and save Licensee harmless from all loss, costs,
  liabilities including an award of damages, and expenses, including legal
  fees, arising from each Claim first notified to Digimarc prior to 31
  December [**]. The obligation set out in this clause 10 shall not apply
  in respect of any settlement made by Licensee without the consent of
  Digimarc.

  
	
   

  	
   

  
	
  10.5

  	
  The liability of Digimarc
  under clause 10.4 of this Agreement and under the equivalent clause of every
  other licence or consulting agreement entered into between Digimarc and

  

 

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  [**]and [**]pursuant to the
  provisions of the [**] Agreement will not exceed the Indemnity Limit
  as defined in clause 10.6 below.

  
	
   

  	
   

  
	
  10.6

  	
  The Indemnity Limit shall be [**], or such higher amount as
  notified by Digimarc from time to time.

  
	
   

  	
   

  
	
  10.7

  	
  For the purposes of clauses
  10.2 through 10.6 inclusive, “Claim” shall mean any Claim, other than a Claim
  for patent infringement which Digimarc can demonstrate occurred without
  Digimarc acting recklessly or negligently.

  
	
   

  	
   

  	
   

  
	
  11.

  	
  TERM AND TERMINATION

  
	
   

  	
   

  	
   

  
	
  11.1

  	
  This
  Agreement will take effect on the Effective Date and will remain in force
  throughout the Term unless sooner terminated as provided herein.

  
	
   

  	
   

  
	
  11.2

  	
  Either
  party may terminate this Agreement if the other party breaches any of its
  obligations under this Agreement and fails to remedy such breach within
  thirty (30) days after receiving written notice of such breach from the other
  party.

  
	
   

  	
   

  
	
  11.3

  	
  Upon
  termination of this Agreement:

  
	
   

  	
   

  
	
  (a)

  	
  all rights
  granted to Licensee under this Agreement will immediately terminate. No interest
  in any such rights will thereafter remain with Licensee, except that [**],
  but no further [**]Licensee shall be permitted; and

  
	
   

  	
   

  
	
  (b)

  	
  each party
  shall return, or certify the destruction of, to the Discloser, all originals
  and copies of the Discloser’s Confidential Information in the party’s
  possession or control which the party does not need to retain in order to
  exercise any rights acquired by this Agreement.

  
	
   

  	
   

  
	
  11.4

  	
  No
  termination of this Agreement will in any manner release, or be construed as
  releasing, any party from any liability arising out of or in connection with
  that party’s breach of or failure to perform any covenant, duty or obligation
  contained herein prior to the date of such termination.

  
	
   

  	
   

  
	
  11.5

  	
  Upon
  termination of the [**] Agreement by Digimarc for cause,
  the rights of Licensee hereunder to use the Digimarc IPR shall be deemed to
  be restricted to the [**]as of the date of such termination.

  
	
   

  	
   

  
	
  11.6

  	
  Termination
  of the license between Digimarc and [**]shall automatically act to terminate
  this Agreement.

  

 

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12.                               DISPUTE
RESOLUTION

 

12.1                          Any Dispute (as defined in the
Arbitration Agreement) shall be finally settled by arbitration in accordance
with the Arbitration Agreement.

 

12.2                          Unless otherwise agreed between
the parties or unless the subject matter of the dispute resolution proceedings
is a party’s right to terminate this Agreement, the Services shall continue
during the dispute resolution proceedings and payments due to Digimarc shall
not be withheld on account of such proceedings unless that particular services
or payment is the subject matter of the proceedings.  Notwithstanding the foregoing, Licensee may
in its sole discretion instruct Digimarc to continue to perform such services
which are the subject matter of the proceedings and Digimarc shall act in
accordance with those instructions, subject to payment under clause 4.1.

 

13.                               MISCELLANEOUS
PROVISIONS

 

13.1                           Remedies
Cumulative - Except
as otherwise expressly set out in this Agreement:

 

(a)                                 each and every right, power and
remedy of a party will be considered to be cumulative with and in addition to
any other right, power and remedy which such party may have at law or in equity
in the event of breach of any of the terms of this Agreement;

 

(b)                                the exercise or partial exercise
of any right, power or remedy will neither constitute the exclusive election
thereof nor the waiver of any other right, power or remedy available to such
party; and

 

(c)                                 a party terminating this Agreement
in accordance with the provisions of the Termination clause will have no
liability or obligation to the other as a result of or with respect to the
termination.

 

13.2                          All notices under this Agreement
shall be delivered by fax, or recognized [**] courier service.  The notice shall be deemed effective as of
the date of delivery to the address of the party specified below as evidenced
by a delivery receipt or the addressee’s registry of incoming
correspondence.  Unless otherwise
expressly set out in this Agreement, all notices to a party will be sent to the
party’s authorized representative identified below and all notices from a party
will be sent by the party’s authorized representative identified below.

 

13.3                          Any notice to Licensee shall be
sent to both of, and any notice from Licensee shall be sent by either:

 

	
  Name1

  	
   

  	
  Name2

  
	
  Address1

  	
   

  	
  Address2

  

 

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  13.4

  	
  Any notice
  to Digimarc shall be sent to both of, and any notice from Digimarc shall be
  sent by either:

  

 

	
  Mr. Robert
  Chamness

  	
   

  	
  Mr. Scott
  Carr

  
	
  Vice
  President and General Counsel

  	
   

  	
  President

  
	
  Digimarc
  Corporation

  	
   

  	
  Digimarc
  [**]

  
	
  9405 SW
  Gemini Drive

  	
   

  	
  9405 SW
  Gemini Drive

  
	
  Beaverton,
  OR 97008

  	
   

  	
  Beaverton,
  OR 97008

  
	
  Fax: (503)
  469-4777

  	
   

  	
  Fax: (503)
  469-4777

  

 

13.5                          A copy of every notice sent by
either party shall be sent to:  [**]

 

13.6                          A party may change its address for
notice by notice to the other party in accordance with the foregoing
provisions.

 

13.7                          Severability.    If any part of this Agreement is held
by an arbitral tribunal appointed pursuant to the Arbitration Agreement or
other competent authority to be void or unenforceable, the parties agree that
such determination will not result in the nullity or unenforceability of the
remaining parts of this Agreement, which will continue in force to the fullest
extent permitted by law.  The parties
further agree to replace such void or unenforceable part of this Agreement with
a valid and enforceable provision that will achieve, to the extent legally
permissible, the economic, business and other purposes of the void or
unenforceable part.

 

13.8                          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.

 

13.9                          Entire Agreement.  
This Agreement is intended by the parties to be the final expression of
their agreement and constitutes and embodies the entire agreement and
understanding between the parties hereto and constitutes a complete and
exclusive statement of the terms and conditions thereof, and will supersede any
and all prior correspondence, conversations, negotiations, agreements or
understandings relating to the same subject matter.

 

13.10                    Amendments.  
No change in, modification of or addition to the terms and conditions
contained herein will be valid as between the parties unless set forth in a
writing that is signed by an authorized representative of each of the parties
and which specifically states that it constitutes an amendment to this
Agreement.

 

13.11                    Waiver.   
No waiver of any term, provision, or condition of this Agreement, will
be effective unless in a written document signed by the waiving party and no
such waiver in any one or more instances, will be deemed to be, or be construed
as, a further or continuing waiver of that term, provision or condition or any
other term, provision or condition of this Agreement.

 

13.12                    Assignment and
Successors.   This Agreement may not be assigned by
Licensee without Digimarc’s consent, which consent shall not be unreasonably
withheld or delayed.  This 

 

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  Agreement
  and all of its terms, conditions and covenants are intended to be fully
  effective and binding, to the extent permitted by law, on the successors and
  permitted assigns of the parties hereto.

  
	
   

  	
   

  
	
  13.13

  	
  Captions.   Captions are provided in
  this Agreement for convenience only and they form no part, and are not to
  serve as a basis for interpretation or construction, of this Agreement, nor
  as evidence of the intention of the parties hereto.

  
	
   

  	
   

  
	
  13.14

  	
  Disclaimer of Agency.   Nothing
  contained in this Agreement is intended or will be construed so as to
  constitute the parties to this Agreement as partners or joint venturers or as
  agents of each other. Neither party will have any express or implied right or
  authority to assume or create any obligations on behalf of or in the name of
  the other party or to bind any other party in any contract, agreement or
  undertaking with any third party. No employee of a party shall be deemed or
  considered to be an employee of the other party or of both parties.

  
	
   

  	
   

  
	
  13.15

  	
  Publicity.   The
  parties agree that from time-to-time it will be beneficial to both parties to
  issue [**] and [**] from the [**]. Each party agrees to submit for approval
  by the other party any [**] that involves the other party, which approval
  shall not unreasonably be withheld.

  
	
   

  	
   

  
	
  13.16

  	
  Effectiveness. This Agreement shall not be effective until
  it is signed by both of the parties.

  
	
   

  	
   

  
	
  13.17

  	
  Ambiguities.   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 shall not apply in interpreting
  this Agreement.

  
	
   

  	
   

  
	
  13.18

  	
  Survival.   All clauses of this
  Agreement which expressly or by implication are intended to survive the
  termination of this Agreement will do so and, for greater certainty and
  notwithstanding any provision in this Agreement to the contrary, the
  provisions of clause 2.9, 4.2, 4.3, 6.1, 6.3, 6.4, 7.2(b), 9, 10, 12 and 13
  of this Agreement shall survive termination of this Agreement by either party
  for any reason.

  

 

IN WITNESS WHEREOF, this Agreement has been executed and
delivered by the parties hereto as of the Effective Date.

 

	
  DIGIMARC CORPORATION

  	
   

  	
  <Licensee>

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
  By:

  	
   

  
	
  Name:

  	
   

  	
   

  	
  Name:

  	
   

  
	
  Title:

  	
   

  	
   

  	
  Title:

  	
   

  
	
  Date:

  	
   

  	
   

  	
  Date:

  	
   

  

 

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ATTACHMENT 1

 

[**]

 

The [**]will
cause the following [**]to take
place:

 

(a)                                  [**]

 

(b)                                 [**].

 

(c)                                  [**] <<a date TBD>>
[**].

 

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ATTACHMENT 2

 

DRAFT OPINION OF COUNSEL

 

Digimarc
Corporation

9405 SW
Gemini Drive

Beaverton, OR
97062

USA

 

Attention:

President and CEO

 

Dear:

 

In connection with your proposal to grant  a license to <name of Licensee> to
use  the [**]and for no other purpose, we
confirm that:

 

	
  (a)

  	
  each
  provision of this Agreement is valid and enforceable against <name of
  Licensee> under the laws of [**]; and

  
	
   

  	
   

  
	
  (b)

  	
  none of the
  [**]described below, at the time of writing, contravenes any law, regulation,
  policy, principle, or doctrine in effect in the jurisdiction of the
  <principal place of business/head office> of <name of Licensee>.

  

 

[**]

 

Yours truly,

 

**
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EXCHANGE COMMISSION.

 

 

ATTACHMENT 3

 

PROBLEM REPORT

 

Each problem
report will contain all information necessary to reproduce or demonstrate the
occurrence of the problem.  Problem
reports will [**] and will be delivered electronically in a format to be
provided by Digimarc.

 

Problem
reports will contain:

 

·                  Date problem was encountered

·                  Detailed description of the problem, including the frequency with which
the problem occurs

·                  Name and [**] the problem

·                  Step by step instructions to reproduce the problem

·                  All data files required to reproduce the problem

·                  [**]

·                  Severity of problem

·                  Contact information for person to contact for further information
(name, phone number, FAX number, email address)

 

Licensee
agrees to work with Digimarc to provide reasonable additional information and
perform reasonable additional tests, as requested by Digimarc, to assist
Digimarc in resolution of the problem.

 

**
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EXCHANGE COMMISSION.

 

 

ATTACHMENT 
4

 

PAYMENT FOR SERVICES

 

Digimarc shall bill Licensee for Services in one hour increments at the
following hourly rates:

 

	
  Technical/Design
  Consultant

  	
   

  	
  [**]

  
	
  Senior
  Engineer

  	
   

  	
  [**]

  
	
  R&D/Engineering
  Executive

  	
   

  	
  [**]

  
	
  Project
  Manager

  	
   

  	
  [**]

  
	
  Administrator/Scheduler

  	
   

  	
  [**]

  

 

Fees for Services will be invoiced on the earlier of 1) the last day of
the month or 2) the completion of the Services. 
Invoices are due thirty (30) days from the date of receipt of a correct
invoice.  A late charge of 1.5% per month
will be charged on any late payments. 
All fees are due and payable in [**].

 

Licensee will reimburse Digimarc for all out-of-pocket expenses
reasonably and necessarily incurred in providing the Services.  Expenses will be itemized and reported by
category.  Out-of-pocket expenses will
not be “marked up” by Digimarc.  Costs include,
but are not limited to, reasonable travel and lodging expenses, telephone and
fax charges, postage and overnight deliveries, and charges for rental equipment
or materials purchased specifically to be used in providing the Service.  All invoices for out-of-pocket expenses will
be issued monthly in arrears and are due thirty (30) days from the date of
receipt of a correct invoice. Supporting receipts and vouchers will be
available for review at Digimarc’s offices. 
A late charge of 1.5% per month will be charged on any late
payments.  Payments will additionally
include Value Added taxes and other tariffs and fees that may be imposed [**].

 

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

 

 

ATTACHMENT 5

 

[**]

 

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

 

 

ATTACHMENT 6

 

IDENTIFICATION OF [**]

 

**
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EXCHANGE COMMISSION.

 

 

ATTACHMENT 7

 

TRAINING

 

	
  1.0

  	
  As part of
  the[**], Digimarc shall develop a program of training acceptable to the [**] Project Director(as defined in the [**] Agreement) in the [**]

  
	
   

  	
   

  
	
  2.0

  	
  Digimarc
  shall deliver the Training as follows:

  
	
   

  	
   

  
	
  2.1

  	
  Digimarc
  shall provide the Training to up to two (2) people simultaneously. The
  trainees will be experienced in digital design system operation.

  
	
   

  	
   

  
	
  2.2

  	
  Digimarc
  shall conduct the Training at the [**]or, at the request of Licensee , at
  Digimarc’s [**]or at some other place agreed between Digimarc and Licensee.

  
	
   

  	
   

  
	
  2.3

  	
  Digimarc
  shall give Licensee reasonable notice concerning the equipment which Digimarc
  will require in order to conduct the Training. Licensee shall provide all
  such equipment at its own expense. If the parties are unable to agree on the
  equipment to be provided either party may refer the matter for decision to
  the DLA Contract Authority (as defined in the [**]
  Agreement).

  
	
   

  	
   

  
	
  2.4

  	
  Digimarc
  shall conduct the Training using the [**]

  
	
   

  	
   

  
	
  2.5

  	
  Digimarc
  shall provide a training manual [**] to every trainee. Any [**] which the
  trainees may require will be provided by Licensee at its own expense.

  
	
   

  	
   

  
	
  2.6

  	
  Digimarc
  shall provide each trainee with a certificate of training at the completion
  of the Training session.

  
	
   

  	
   

  
	
  2.7

  	
  Digimarc
  shall conduct the Training [**].

  

 

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SCHEDULE
M

 

ESCROW
AGREEMENT

 

DATED:

 

Between:

 

	
  (1)

  	
  DIGIMARC CORPORATION whose head office is
  at One Centerpointe Drive, Suite 500, Lake Oswego, Oregon. U.S.A.
  97035-8615 (“Digimarc”);

  
	
   

  	
   

  
	
  (2)

  	
  [**]

  
	
   

  	
   

  
	
  (3)

  	
  [**]whose registered office is at [**]

  

 

Each of the parties to this Agreement
acknowledges that the considerations for their respective undertakings given
under it are the undertakings given under it by each of the other parties.

 

It is agreed that:

 

1.                                      Definitions

 

In this Agreement the following terms shall
have the following meanings:

 

1.1                                 “Arbitration Agreement” means the Arbitration Agreement entered into between the parties
and others effective 1 January 1999.

 

1.2                                 “Business Day”
means a day on which each of [**], Digimarc, and [**] is open for business at
their respective addresses noted above;

 

1.3                                 “Intellectual Property Rights” means copyright, trade secret, patent, and all other rights of a
similar nature;

 

1.4                                 “Licence Agreement” means the Counterfeit Deterrence System Development and License
Agreement entered into between Digimarc and [**], effective 1 January 1999.

 

1.5                                 “Material”
means the “Escrowed Materials” as that term is defined in the Licence
Agreement; and

 

1.6                                 “Technology” means
the CDS Technology as defined in the Licence Agreement.

 

** CONFIDENTIAL PORTION OMITTED AND FILED
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2.                                      Owner’s Duties and Warranties

 

2.1                                 Digimarc shall:

 

2.1.1                        deliver a copy of the Material to [**] within thirty (30) days of
the date of this Agreement;

 

2.1.2                        make available to [**] at Digimarc’s premises a copy of the Material
in accordance with its obligations under Clause 8.8 of the Licence Agreement;
and

 

2.1. 3                     deliver to [**] a replacement copy of the Material within twenty
(20) Business Days of receipt of a notice served upon it by [**] under the
provisions of Clause 4.1.5.

 

2.2                                 Digimarc  warrants to [**] that Digimarc
has sufficient rights in the Intellectual Property Rights in the Material to
enter into this Agreement, and that it has authority to enter into this
Agreement.

 

3.                                      [**]’ Responsibilities

 

It shall be
the responsibility of [**] to notify [**] of any change to the Technology that
necessitates a replacement deposit of the Material.

 

4.                                      [**]’s Duties

 

4.1                                 [**] shall:

 

4.1.1                        hold the Material in a safe and secure environment;

 

4.1.2                        notify Digimarc and [**] of the receipt of any copy of the Material;

 

4.1.3                        in accordance with the terms of Clause 9 perform the Verification
Process from time to time;

 

4.1.4                        at all times retain a copy of the latest verified deposit of the
Material;

 

4.1.5                        notify Digimarc and [**] if it becomes aware at any time during the
term of this Agreement that the copy of the Material held by it has been lost,
damaged or destroyed; and

 

4.1.6                        upon receipt and verification of a new version of the Material,
return all prior versions of the Material to Digimarc with ten (10) Business
Days.

 

4.2                                 [**] shall not be responsible for procuring the delivery of the
Material in the event of failure by Digimarc to deliver it.

 

5.                                      Payment

 

[**]’s fees
are payable in accordance with Schedule 1.

 

**
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EXCHANGE COMMISSION.

 

 

6.                                      Release Events

 

6.1                                 For the purposes of this Agreement any of the following events shall
be considered to be a “Release Event”:

 

(a)                                  the date on which the license referred to in Clause 8.4 of the
Licence Agreement takes effect in accordance with Clause 8.5 of that Agreement;

 

(b)                                 the date on which the license referred to in Clause 8.6 of the
Licence Agreement takes effect.

 

6.2                                 [**] must notify [**] of the occurrence of a Release Event by delivering
to [**] a statutory or notarized declaration (“the Declaration”) made by an
officer of [**] attesting that such event has occurred and that the Licence
Agreement was still valid and effective up to the occurrence of such event and
exhibiting:

 

6.2.1                        such documentation in support of the Declaration as [**] shall
reasonably require; and

 

6.2.2                        a copy of the Licence Agreement.

 

6.3                                 Upon receipt of a Declaration from [**] claiming a Release Event
under Clause 6.1:

 

6.3.1                        [**] shall send a copy of the Declaration to Digimarc by courier and
fax; and

 

6.3.2                        unless within fourteen (14) days after the date of delivery Digimarc
delivers to [**] a counter-notice signed by a duly authorized officer of
Digimarc stating that no such Release Event has occurred

 

then [**] will release the Material to an
authorized officer of [**] upon receipt of the release fee stated in Schedule
1.

 

6.4                                 Where there is any dispute as to the occurrence of any of the events
set out in Clause 6.1, such dispute will be referred at the request of either
Digimarc or [**] to the Managing Director for the time being of [**] (or the
equivalent officer of any new custodian appointed pursuant to Clause 11.2 or
11.3) for the appointment of an expert who shall give a decision on the matter
within fourteen (14) days of the date of referral or as soon as practicable
thereafter.  The expert’s decision shall
be final and binding as between Digimarc and [**] except in the case of
manifest error.

 

6.5                                 If the expert’s decision is that a Release Event has occurred, [**]
shall immediately release the Material to an authorized officer of [**] upon
receipt of the release fee stated in Schedule 1.

 

**
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EXCHANGE COMMISSION.

 

 

7.                                      Confidentiality

 

7.1                                 The Material shall remain the confidential property of Digimarc and
in the event that [**] provides a copy of the Material to [**], [**] shall be
permitted to use and sublicence the Material only in accordance with the terms
set forth in the License Agreement.

 

7.2                                 [**] agrees to maintain all information and/or documentation coming
into its possession or to its knowledge under this Agreement in strictest
confidence and secrecy.  [**] further
agrees not to make use of such information and/or documentation other than for
the purposes of this Agreement and will not disclose or release it other than
in accordance with the terms of this Agreement.

 

7.3                                 Termination of this Agreement will not relieve [**] or its
employees, or [**] or its employees, from the obligations of confidentiality
contained in this Clause 7.

 

8.                                      Intellectual Property Rights

 

The release of
the Material to [**] will not act as an assignment or license of any
Intellectual Property Rights that Digimarc possesses in the Material except as
specifically provided in the Licence Agreement.

 

9.                                      Verification

 

9.1                                 Subject to the provisions of Clauses 9.2 and 9.3, [**] shall bear no
obligation or responsibility to any person, firm, company or entity whatsoever
to determine the existence, relevance, completeness, accuracy, effectiveness or
any other aspect of the Material.

 

9.2                                 Upon the Material being lodged with [**] from time to time under
Clause 2.1, [**] shall perform tests in accordance with its standard
verification service applying from time to time and shall provide a copy of the
test report to [**] and Digimarc. 
Additionally, at [**]’ request and expense, [**] shall perform the
Verification Process detailed in clause 9.3 below.

 

9.3                                 Verification Process.  [**]
shall inspect, audit and verify any or all of the Material for accuracy,
completeness and sufficiency.  Such
verification process may include, at [**]’s option, assembling and/or compiling
the source code into executable object code. 
Digimarc agrees to make reasonably available, at its standard consulting
rates as in effect from time to time, technical and support personnel
reasonably necessary for [**] to perform verification of the Material, and
further agrees to give [**] reasonable access to Digimarc’s facilities,
including its computer systems, for the purpose of such verification at no
additional charge.  Digimarc hereby
grants [**] permission to release to [**] directory lists and/or tables of
contents of computer media, manuals, and other materials comprising the
Material.  Digimarc and [**] shall be
entitled to have a representative present at all times to observe such
verification by [**].  Any report
prepared by [**] shall be provided to all parties hereto.

 

** CONFIDENTIAL PORTION OMITTED AND FILED
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10.                               [**]’s Liability

 

10.1                           [**] shall not be liable for any loss caused to Digimarc or [**]
either jointly or severally except for loss of or damage to the Material to the
extent that such loss or damage is caused by the negligent acts or omissions of
[**], its employees, agents or sub-contractors and in such event [**]’s total
liability in respect of all claims arising under or by virtue of this Agreement
shall not (except in the case of claims for personal injury or death) exceed
the sum of five hundred thousand pounds (£500,000).

 

10.2                           [**] shall in no circumstances be liable to Digimarc or [**] for
indirect or consequential loss of any nature whatsoever whether for loss of
profit, loss of business or otherwise.

 

10.3                           [**] shall be protected in acting upon any written request, waiver,
consent, receipt or other document furnished to it pursuant to this Agreement,
not only in assuming its due execution and the validity and effectiveness of
its provisions but also as to the truth and acceptability of any information
contained in it, which [**] in good faith believes to be genuine and what it
purports to be.

 

11.                               Termination

 

11.1                           [**] may terminate this Agreement after failure by [**] to comply
with a 30 day written notice from [**] to pay any outstanding fee.

 

11.2                           [**] may terminate this Agreement by giving sixty (60) days written
notice to Digimarc and [**].  In that
event Digimarc and [**] shall appoint a mutually acceptable new custodian on
terms similar to those contained in this Agreement.

 

11.3                           If a new custodian is not appointed within 30 days of delivery of
any notice issued by [**] in accordance with the provisions of Clause 11.2,
Digimarc or [**] shall be entitled to request the President for the time being
of the British Computer Society to appoint a suitable new custodian upon such
terms and conditions as he shall require. 
Such appointment shall be final and binding on all parties.

 

11.4                           If the rights of all parties to use the Technology under or pursuant
to the Licence Agreement have expired or have been lawfully terminated this
Agreement will automatically terminate on the same date.

 

11.5                           [**] may terminate this Agreement at any time by giving written
notice to Digimarc and [**].

 

11.6                           Digimarc may only terminate this Agreement with the written consent
of [**].

 

11.7                           This Agreement shall terminate upon release of the Material to [**]
in accordance with Clause 6.

 

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11.8                           Upon termination under the provisions of Clauses 11.4, 11.5 or 11.6
[**] will deliver the Material to Digimarc. 
If [**] is unable to trace Digimarc, [**] will destroy the Material.
Upon termination under the provisions of Clause 11.2 [**] will deliver the
Material to the new custodian agreed under Clause 11.2 or appointed under
Clause 11.3.

 

11.9                           Upon termination under the provisions of Clause 11.1 the Material
will be available for collection by Digimarc from [**] for thirty (30) days
from the date of termination.  After such
thirty (30) day period [**] will destroy the Material.

 

12.                               General

 

12.1                           This Agreement shall be governed by and construed in accordance with
the laws of England to the exclusion of its rules of conflicts of laws.

 

12.2                           This Agreement represents the whole agreement relating to the escrow
arrangements between the parties for the Material and supersedes all prior
arrangements, negotiations and undertakings.

 

12.3                           Except as otherwise provided, all notices to be given to the parties
under this Agreement shall be served by hand, by internationally-recognized
courier service, or by registered post (return receipt requested), addressed to
the signatories hereto at the addresses given above or, for companies based in
the UK, at the registered office. 
Facsimile may not be used except as a supplement to one of the
foregoing.  Notices shall be deemed to
have been duly given or made when delivered, as evidenced by delivery receipt
or customary courier delivery notification.

 

12.4                           Any “Dispute”, as the term is defined in the Arbitration Agreement,
shall be finally settled by arbitration in accordance with the Arbitration
Agreement.

 

Signed on behalf of

 

[**]

 

 

	
   

  	
   

  	
   

  
	
  Signature

  	
   

  
	
  Name:

  	
   

  
	
  Title:

  	
  (Authorized Signatory)

  
	
  Date

  	
   

  

 

 

	
   

  	
   

  	
   

  
	
  Signature

  	
   

  
	
  Name:

  	
   

  
	
  Title:

  	
  (Authorized Signatory)

  
	
  Date

  	
   

  

 

**
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EXCHANGE COMMISSION.

 

 

DIGIMARC CORPORATION

 

	
   

  	
   

  	
   

  
	
  Signature

  	
   

  
	
  Name:

  	
  Bruce Davis

  	
   

  
	
  Title:

  	
  President & CEO

  	
  (Authorized Signatory)

  
	
  Date:

  	
   

  	
   

  
				

 

[**] ESCROW
INTERNATIONAL LIMITED

 

 

	
   

  	
   

  	
   

  
	
  Signature

  	
   

  
	
  Name:

  	
   

  
	
  Title:

  	
  (Authorized Signatory)

  
	
  Date:

  	
   

  

 

**
CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
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SCHEDULE
1

 

[**]’s Fees (St£)

 

	
  DESCRIPTION

  	
   

  	
  FEE

  	
   

  	
  DIGIMARC

  	
   

  	
  [**]

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1

  	
   

  	
  Initial Fee

  	
   

  	
  £700

  	
   

  	
  NIL

  	
   

  	
  100%

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2

  	
   

  	
  Annual Fee 

  (payable on completion of this Agreement and on each anniversary thereafter)

  	
   

  	
  £385

  	
   

  	
  NIL

  	
   

  	
  100%

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3

  	
   

  	
  Update Fee

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (per update after the first 4 updates per
  annum)

  	
   

  	
  £100

  	
   

  	
  NIL

  	
   

  	
  100%

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4

  	
   

  	
  Storage Fee

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (an additional annual fee may be payable
  for deposits in excess of one cubic foot)

  	
   

  	
  TBA

  	
   

  	
  NIL

  	
   

  	
  100%

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5

  	
   

  	
  Liability Fee

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (£100 per £500,000 of liability exceeding
  £500,000, per annum) 

  	
   

  	
  Not Applicable

  	
   

  	
  NIL

  	
   

  	
  Not

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Applicable

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  6

  	
   

  	
  Release Fee

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (plus [**]’s reasonable expenses)

  	
   

  	
  £500

  	
   

  	
  NIL

  	
   

  	
  100%

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7.

  	
   

  	
  Verification Fee

  	
   

  	
  £700 per day

  	
   

  	
  NIL

  	
   

  	
  100 %

  
	
   

  	
   

  	
  (plus [**]’s reasonable expenses)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

1.                                       All fees are subject to VAT where applicable*

2.                                       All fees are reviewed by [**] from time to time

 

*  only
applicable to countries within the EU.

 

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

 

 

SCHEDULE “N”

 

PROGRESS REPORTS AND PROJECT REVIEWS

 

1.                                      TASK STATUS

 

Within
fifteen (15) Business Days after the end of every calendar month [**]  Digimarc shall deliver reports to the [**]
Project Director in accordance with Sections 8 to 10 herein as agreed in the
current Program Work Plan.

 

2.                                      PROBLEM REPORT

 

Digimarc
shall report to the [**] Project Director on problems that impact technical or
schedule performance. Each problem will be reported in a problem list that
includes the following information:

 

Problem
title

Date
reported

Task or
Service affected

Task or
Service impact

Proposed
corrective action

Current
status

Date
closed

 

Red
Flag reports (see paragraph 7) will be included on the problem list. A problem
will remain on the list until closed or otherwise resolved.

 

3.                                      PROGRESS REVIEWS

 

Digimarc
shall provide materials, information and documentation in support of progress
review meetings with the [**] once every [**] months on average throughout the
period during which Phase [**]  Services
are being performed and will attend progress review meetings as requested by
the [**] Project Director. The objective of each meeting is to review the:
status of each major task and Service; status of deliverable items; [**] progress for each [**]; each parties’ proposed plans concerning
[**] including intended outcome during the Term of this Agreement and during
the period until the next meeting under this Schedule; [**]; a summary of the financial status; contractual
and administrative matters; contract changes and amendments, as necessary;
technical reports or data; [**] and user factors and [**] activities; and other
topics as necessary and relevant.

 

Each
meeting that Digimarc is requested to attend will last no more than 2 days
unless otherwise agreed upon in advance. Attendees will include management,
technical and administrative representatives from Digimarc and [**], including
the parties’ respective Project Directors or suitable designees. To ensure
meeting effectiveness, [**] will be limited to ten (10) 

 

** CONFIDENTIAL PORTION OMITTED AND FILED
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or fewer persons including any
outside [**] or consultants deemed necessary by agreement of the parties’
respective Project Directors to be necessary to ensure an effective meeting.

 

In
between the quarterly meetings described above, the technical representatives
of Digimarc and [**] shall hold technical review meetings at least six (6) times
per year or as otherwise agreed by the parties to review technical, and resource
matters. Each such meeting will last no more than 2 days unless otherwise
agreed upon in advance and will be held at a mutually agreeable date and
location. At least half of the reviews will be held at Digimarc’s facilities. Digimarc
will provide a presentation for the [**] on development and [**] progress at
least once per year if requested by the [**] Project Director.

 

4.                                      AGENDA

 

An
agenda will be prepared by Digimarc and sent to the [**] ten (10) days in
advance of each progress review and technical review meeting for review and
comment or approval.

 

5.                                      MEETING MATERIALS

 

Progress
review and technical review meeting materials will consist of power point
presentations, technical data, marketing white
papers, studies, technical specifications analyses and other reports. Meeting materials will be
delivered to the [**].

 

6                                         REPORT

 

Within
five (5) Business Days after the progress review or technical review
meeting, Digimarc shall prepare and deliver to the [**] a report summarizing
the essential topics discussed including the action items assigned during the
meeting. Meeting materials will be appended to the report.

 

7.                                      RED FLAG REPORT

 

Digimarc
shall prepare and deliver to the [**] Project Director a “Red Flag” report when
a problem requiring the immediate attention of [**] is required.  Red Flag reports may be informative; e.g., a
report about a [**] delinquency that will impact a critical version release
date.  They may also report on problems
whose correction requires immediate consideration or action from [**] or
another organization external to Digimarc. Red Flag reports on development or
[**] problems will contain the following information:

 

·                  A
summary describing the development or [**] problem and background information
that may be necessary to understand the development or [**] problem.

·                  A
description of the impact of the problem on the development project(s) or
[**] plan(s).

·                  The
date by which a resolution is required.

·                  A
description of the recommended next action.

·                  The
action requested of the [**] Project Director.

 

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

 

 

8.             PROJECT REPORTING GENERAL

 

Monthly activities reports will
be provided that include a report for each of the [**] areas: Development,
Maintenance, [**] and Program Wide.

 

a.     DEVELOPMENT
DETAIL

 

1.     Project
Objectives – Statement of the objectives for the project

2.     Major
project risks or unknowns – Project Directors view of the major risks and
unknowns as of the current month

3.     Accomplishments
in the current month – List of major tasks completed and milestones reached in
the current month

4.     Changes to plan
– Changes to the project plan made during the current month

5.     Next month’s
tasks and milestones – List of the major tasks and the milestones that are
expected to be reached in the next month

6.     Current
project Gantt chart – Updated Gantt chart project with all project changes to
date

7.     Utilized
resources – List of staff utilized on the project during the current month

8.     Monthly
labor hours by type of labor – Summary of labor hours by job class for the
current month

9.     Monthly
Utilization – Actual monthly Allowable Costs, forecast to end of scope of work,
and comparison to estimated Allowable Costs projection.

 

b.     MAINTENANCE
DETAIL

 

1.     Project
Objectives – Statement of the objectives for the project

2.     Major
project risks or unknowns – Project Directors view of the major risks and
unknowns as of the current month

3.     Accomplishments
in the current month – List of major tasks completed and milestones reached in
the current month

4.     Changes to
plan – Changes to the project plan made during the current month

5.     Next month’s
tasks and milestones – List of the major tasks and the milestones that are
expected to be reached in the next month

6.     Current
project Gantt chart – Updated Gantt chart project with all project changes to
date

7.     Utilized
resources – List of staff utilized on the project during the current month

8.     Monthly
labor hours by type of labor – Summary of labor hours by job class for the
current month

 

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

 

 

9.     Monthly
Utilization – Actual monthly Allowable Costs, forecast to end of scope of work,
and comparison to estimated Allowable Costs projection.

 

c.     [**]
DETAIL

 

1.     Project
Objectives – Statement of the objectives for the project

2.     Major project
risks or unknowns – Digimarc Project Director’s view of the major risks and
unknowns as of the current month

3.     Accomplishments
in the current month – List of major tasks completed in the current month

4.     Changes to
plan – Changes to the project plan made during the current month

5.     Next month’s
tasks – List of the major tasks that are expected to be accomplished in the
next month

6.     Utilized
resources – List of staff utilized on the project during the current month

7.     Monthly
labor hours by type of labor – Summary of labor hours by job class for the
current month

8.     Monthly
Utilization – Actual monthly Allowable Costs, forecast to end of scope of work,
and comparison to estimated Allowable Costs projection.

 

d.     PROGRAM
WIDE DETAIL

 

1.     Project
Objectives – Statement of the objectives for the project

2.     Accomplishments
in the current month – List of major tasks completed in the current month

3.     Changes to
plan – Changes to the project plan made during the current month

4.     Next month’s
tasks – List of the major tasks that are expected to be accomplished in the
next month

5.     Utilized
resources – List of staff utilized on the project during the current month

6.     Monthly
labor hours by type of labor – Summary of labor hours by job class for the
current month

7.     Monthly Utilization – Actual monthly Allowable
Costs, forecast to end of scope of work, and comparison to estimated Allowable
Costs projection.

 

9.                     PROJECT MANAGEMENT UPDATES

 

1.     Digimarc and
the [**] will conduct weekly project management updates to review progress on
[**] plans and coordinate [**] work to be undertaken over the next period.

 

**
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2.     Digimarc
will be responsible for the issuance of minutes for each project management
update and also maintain a register of changes in process and approved.

3.     Digimarc
will update the [**] activity report once per month.

 

10.                  [**] REPORTS

 

1.     Digimarc
will provide [**] reports on the status of the [**] and related [**] twice per
year – in March and September.  The
[**] will reimburse to Digimarc the cost of providing additional [**] reports
as requested by the [**] Project Director.

2.     Digimarc
will provide reports to the [**] on the specific [**] identified in the [**]
Plans once per quarter if requested by the [**] Project Director.

 

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SCHEDULE
“O”

 

THIS SYSTEM SUPPORT
SERVICES AGREEMENT (the “Agreement”)  is  made

 

BETWEEN

 

<name and address of
licensee> (“Licensee”)

 

- AND -

 

DIGIMARC CORPORATION, a corporation incorporated under the laws of
Oregon and having its head office at One Centerpointe, Suite 500 Drive,
Lake Oswego, Oregon. U.S.A.  97035-8615 (“Digimarc”)

 

Licensee entered into one or
more license agreements with Digimarc for the license of the [**] a counterfeit
deterrence system (the “CDS”);

 

Licensee now wishes to engage
Digimarc to maintain and support [**];

 

In
consideration of these premises, the covenants set out in this Agreement and
for other good and valuable consideration, the receipt and adequacy of which
are acknowledged by each of the parties, the parties agree as follows:

 

1.             DEFINITIONS AND PRINCIPLES OF
INTERPRETATION

 

1.1           Definitions - Whenever used in this Agreement, the
following words and terms shall have the meanings set out below:

 

“Arbitration Agreement” means the Arbitration Agreement entered into
between the parties and others effective 1 January 1999;

 

“Agreement” means these articles of agreement, including
the Attachments, and those documents as specified or referenced in this
Agreement as forming part of the Agreement, all as may be amended from time to
time;

 

“[**]Agreement” means Counterfeit Deterrence System
Development and License Agreement entered into between [**] and Digimarc
effective 1 January 1999;

 

“Business Day” means a day on which both Licensee and
Digimarc are open for business at their respective addresses noted above;

 

“Confidential Information”
means information disclosed during the Term of this Agreement in any form
which, if disclosed in tangible form, is labelled “Confidential”, 

 

**
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EXCHANGE COMMISSION.

 

 

“Proprietary”
or with a similar legend, or if disclosed orally is information that by its
nature would be understood to be confidential to the Discloser;

 

“Core Hours” means 7:00 a.m. to 7:00 p.m. Monday
through Friday, United States Pacific time zone, excluding statutory holidays observed
by Licensee at its Site;

 

“Discloser” means a party
which has disclosed or otherwise made available its Confidential Information to
the other party;

 

“Effective Date” means the date on which this Agreement is last
signed, or the Effective Date of the License Agreement, whichever is later;

 

[**]

“Hot-line” means a single dedicated telephone line
provided by Digimarc to Licensee for the reporting of problems with [**];

 

“License Agreement” means, collectively, all license agreements
entered into between the parties pursuant to which Licensee acquired a license
to use [**];

 

“Person” means any individual or other legal entity,
including without limitation sole proprietorship, partnership, unincorporated
association, unincorporated syndicate, unincorporated organization, trust, body
corporate, or a natural person in the capacity of trustee, executor,
administrator or other legal representative;

 

“Recipient” means a party to
which the Confidential Information of the other party has been disclosed or
otherwise made available;

 

“Services” means the services described in clauses 2 and
3 below, or any of them;

 

“Severity Level One Software Problem” means a Software Problem which causes the [**]
to cease operating or which causes the computer system running [**] to crash;

 

“Severity Level Two Software Problem” means a Software Problem which causes the [**]
to cease operation in accordance with its Specifications or which produces
substantially incorrect data;

 

“Severity Level Three Software Problem” means a Software Problem which is not a
Severity Level Two Problem or a Severity Level One Problem;

 

“Site” means the [**] of Licensee at which a Software
Problem is encountered;

 

“Software Problem” means a circumstance where [**] does not function in accordance with its
Specifications, produces substantially incorrect data, or causes a computer
running [**] to crash, or other problem with [**] and which can be reproduced
by 

 

**
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Digimarc,
at Digimarc’s facility, based on information provided to Digimarc by Licensee
in a Software Problem Report;

 

“Software Problem Report” means a written report in the form attached as
Attachment 1;

 

“Specifications” has the meaning given to it by the [**] Agreement;

 

“System Documentation” means the documentation for [**] provided by Digimarc to Licensee under a
License Agreement;

 

“Training Manual” means the training manual which relates to the
use of [**] provided by Digimarc to Licensee under a License Agreement; and

 

“Work” means the tasks that are required to be
performed by Digimarc in order to comply with its obligations under this
Agreement.

 

1.2           Interpretation - In this Agreement:

 

1.2.1        unless
otherwise specified, all references to money amounts are to the currency of the
United States of America;

 

1.2.2        the use of words in the singular or plural, or
with a particular gender, shall not limit the scope or exclude the application
of any provision of this Agreement to such Person or Persons or circumstances
as the context otherwise permits;

 

1.2.3        whenever a provision of this Agreement requires
an approval or consent by a party to this Agreement and notice of such approval
or consent is not delivered within the applicable time, then the party shall be
conclusively deemed to have withheld the consent or approval;

 

1.2.4        unless otherwise specified, the number of days
within or following which any payment is to be made or act is to be done shall
be interpreted to be continuous and shall be calculated by excluding the day on
which the period commences and including the day which ends the period and by
extending the period to the next Business Day if the last day of the period is
not a Business Day;

 

1.2.5        unless otherwise specified, the order of
precedence for interpreting this Agreement shall be:

 

(a)           this Agreement, excluding the Attachments,

 

(b)           the Attachments;

 

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

 

 

If this Agreement conflicts in substance with a License Agreement
entered into between the parties, the License Agreement shall control;

 

1.2.6        for greater certainty, a party or
representative to which this Agreement grants the right to make a decision or
determination in the sole discretion of the party or representative is not
required to act reasonably in making the decision or determination and no such
decision or determination may be challenged by the other party under the
Arbitration Agreement or otherwise;

 

1.2.7        the words “includes” or “including” will be
construed without limitation to the generality of the preceding words;

 

1.2.8        a clause, Schedule or Attachment unless the
context requires otherwise, is a reference to a clause, a Schedule or
Attachment of, or a paragraph of a Schedule or Attachment of, this Agreement,
as amended from time to time in accordance with this Agreement; and

 

1.2.9        any
due date or time period prescribed by this Agreement may be changed by written
agreement between the parties’ respective representatives identified in clauses
5.1 and 5.2.

 

1.3           Applicable Law  - This Agreement shall be construed in
accordance with the laws of England to the exclusion of its rules of
conflicts of laws.

 

1.4           Attachments - The attachment to this Agreement, listed
below, is an integral part of this Agreement:

 

Attachment 1                        Software Problem Report

 

2.             SCOPE OF THE WORK

 

2.1           Digimarc shall provide the Services described
in this clause 2 as required to ensure that [**] will conform to and operate in
accordance with the Specifications.

 

2.2           Problem Resolution.  Digimarc shall resolve every
Software Problem in [**] reported by Licensee as follows:

 

2.2.1        Digimarc shall provide and maintain in effect
throughout the Term:

 

(a)           a Hot-line which Licensee representative shall
use to report Software Problems, and;

 

(b)           a paging service by which Licensee can
communicate with Digimarc when Licensee is unable to communicate with Digimarc
using the Hot-line.

 

**
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COMMISSION.

 

 

Licensee
will follow-up each such communication with a Software Problem Report.

 

2.2.2        Both Digimarc and Licensee shall log each
Software Problem reported by Licensee.

 

2.2.3        Upon receipt by Digimarc of a report from
Licensee of a Software Problem, Digimarc shall respond as provided below in
accordance with the level of severity of the Software Problem identified by
Licensee.  Digimarc may respond to the
report of a Software Problem by telephone or in writing.

 

2.2.4        Digimarc shall file a “Resolution Report” with
Licensee for each Software Problem reported by Licensee which will include a
description of the cause of the Software Problem and the means by which the
Software Problem was resolved.

 

2.2.5        Digimarc shall use its best efforts to respond
to a Software Problem Report of a Severity Level One Software Problem made
during Core Hours and resolve the identified Software Problem within two (2) Business
Days of receipt of the Software Problem Report. 
The resolution of the Software Problem may include a work-around to the
Software Problem acceptable to Licensee in the form of an amendment to [**] on
an interim basis if a permanent resolution is provided within a further twenty
(20) Business Days. If:

 

(a)           Digimarc fails to provide a permanent
resolution of the Software Problem within twenty (20) Business Days after
Digimarc provides the work-around, or

 

(b)           Digimarc fails to provide a work-around to the
Software Problem within two (2) Business Days after receipt of a report
from Licensee of the Software Problem,

 

Licensee
may, at its option, reduce the monthly charge for the Services by [**]
for each Business Day after the
first Business Day which elapses until Digimarc provides the required temporary
or permanent resolution to that Software Problem.

 

2.2.6        Digimarc shall use commercially reasonable
efforts to respond to a Software Problem Report of a Severity Level Two
Software Problem within ten (10) Business Days of receipt and resolve the
identified Software Problem within a further ten (10) Business Days of
receipt.  If Digimarc fails to resolve
the Software Problem within the twenty (20) Business Day period, Licensee may,
at its option, designate the Software Problem as a Severity Level One Software
Problem.

 

2.2.7        Digimarc will accept reports for Severity Level
Three Software Problems and will consider them for resolution in a future
release.

 

2.2.8        The period for resolution of any Software
Problem identified under Clause 2.2.5 and 2.2.6 shall commence with the receipt
by Digimarc of the information necessary to 

 

**
CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
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reproduce
the reported Software Problem if the resolution of that Problem requires such
reproduction.

 

2.3           Application Support.   Digimarc shall, using the Hotline,
answer questions from Licensee related to the use of [**] and resolve problems
with [**] which do not require
changes to [**].

 

2.4           Documentation Updating.   Digimarc shall update both the
hard copy and the electronic versions of the Training Manuals as required to
reflect changes in [**] which result from the provision by Digimarc of the
Services.

 

2.5           Digimarc shall provide the Services during the
Core Hours.  If Licensee notifies
Digimarc that the provision of the Services during Core Hours will have a
noticeable impact on Licensee’s normal operations, Digimarc shall provide the
Services outside of Core Hours at a time or times and for the charges to be
agreed with Licensee.

 

2.6           Changes to the [**] other than changes to
redress a Software Problem shall be made by Digimarc only at the direction of
the DLA Contracting Authority, pursuant to the terms of the [**] Agreement.

 

2.7           All Services required to be provided as a
result of :

 

(a)           use by
Licensee of [**] other than in accordance with the Training Manual supplied by
Digimarc under a License Agreement; or

 

(b)           failure
of the computer system on which [**] is installed to operate in accordance with
the applicable manufacturer’s specifications;

 

will be for the account of
Licensee.

 

3.             [**] UPDATES

 

3.1           No Licensee shall be compelled to incorporate
[**].

 

3.2           Digimarc shall continue to provide the Services
to Licensee for the two (2) versions of [**] which immediately preceded
the then current version of [**]or for all versions of [**] released within
twenty-four (24) months of the date of issue of the [**], whichever is the greater,
at no additional cost to Licensee.

 

4.             PURCHASE PRICE AND PAYMENT

 

4.1           The fee for the Services is [**] for each year
during the Term. Licensee shall pay the fee in equal monthly installments on or
before the first day of the calendar month.

 

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4.2           Except as otherwise expressly provided in this
Agreement, Licensee shall pay Digimarc all sales, use, goods and services or
other similar taxes levied by any government in the United States or the
country of Licensee’s principal place of business which Digimarc is obliged to
collect and remit to such government(s) in connection with any amount paid
by Licensee to Digimarc under this Agreement.

 

4.3           Digimarc is responsible for, and shall
indemnify Licensee against, and hold Licensee harmless from, the payment of all
taxes levied by any government on or in respect of Digimarc’s income and any
amounts required by law to be paid in respect of social benefits for Digimarc’s
employees relating to or arising out of the services performed under this
Agreement by Digimarc.  If required by
law, Licensee shall deduct all such taxes and amounts from the amounts
otherwise payable to Digimarc and remit them to the appropriate authorities.

 

4.4           Licensee may set off against any amount which
Licensee owes Digimarc under or in connection with this Agreement any amount
which Digimarc owes Licensee under or in connection with this Agreement, and
vice versa.

 

5.             SERVICES COORDINATION

 

5.1           Digimarc shall designate a responsible
individual with adequate authority and competence as a services representative
whose responsibilities, in addition to those expressly set out in this
Agreement, shall be to serve as primary interface with Licensee.

 

5.2           Licensee shall designate a responsible
individual with adequate authority and competence to serve as primary interface
with Digimarc.

 

5.3           Either party’s representative may from time to
time appoint one or more Persons to represent him or her on prior written
notice to the other party’s representative.

 

5.4           Digimarc shall replace within a reasonable time
under the circumstances any of its employees or authorized subcontractors
engaged in fulfilling its obligations under this Agreement, including its
services representative, whose removal is required by Licensee, provided that
Licensee specifies reasonable cause for such removal in writing.

 

5.5           Digimarc represents that all personnel assigned
to do the Work will be employees of Digimarc. Digimarc shall not engage any
subcontractor to do any part of the work without first obtaining the prior
written consent of Licensee, which consent will not unreasonably be withheld.

 

6.             LICENSEE’S RESPONSIBILITIES

 

6.1           Unless otherwise expressly set out in this
Agreement, Licensee shall respond in writing within ten (10) Business Days
to every written request for consent required by this Agreement received from
Digimarc.

 

**
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6.2           If Licensee is delayed in complying with any of
its obligations under clause 6.1 for any reason not attributable to Digimarc, and
such delay is the cause of a delay in the compliance by Digimarc with any of
its obligations under this Agreement, then the time for completion and the
deadlines dependent thereon will be extended automatically by one day for each
day of delay by Licensee or such other period as may be agreed in writing
between the parties’ respective representatives.  If Digimarc reasonably incurs any costs as a
result of the delay, other than a delay due to a force majeure event, such
costs will, at Digimarc’s option, be borne by Licensee.  If the delay is due to a force majeure event,
such costs shall be borne equally by Licensee and Digimarc.  This clause 6.2 sets forth Digimarc’s only
remedy for a delay by Licensee in complying with such obligation.

 

7.             INTELLECTUAL PROPERTY MATTERS

 

7.1           Licensee acknowledges that Digimarc is the
owner of all changes to [**] made
by Digimarc under this Agreement and all such changes shall be considered for
all purposes of a License Agreement as forming part of [**] licensed thereunder.

 

8.             REPRESENTATIONS AND WARRANTIES
OF DIGIMARC

 

8.1           General - Digimarc represents, warrants and undertakes
to Licensee that from and after the Effective Date:

 

(a)           the
Services will be of professional quality conforming to generally accepted
software product development practices and will be performed at all times in a
timely and cost effective manner and, for greater certainty Digimarc shall
employ the standard of care in performing the work that would be expected of an
[**] of the same or similar type as [**] which comprises the CDS Technology;

 

(b)           Digimarc is duly incorporated and
organized and is validly subsisting under the laws of the State of Oregon,
U.S.A. or some other state in the United States with full corporate power and
authority to enter into this Agreement;

 

(c)           to the best of its knowledge,
neither this Agreement nor the Services will contravene, breach, or result in
any default under any agreement, permit, by-law, or law or regulation to which
Digimarc is subject or by which it is bound including, for greater certainty
any laws or regulations in effect in the United States governing export; and

 

(d)           this Agreement when executed and
delivered by Digimarc shall constitute a valid and binding agreement with
Digimarc enforceable against Digimarc according to its terms.

 

9.             REPRESENTATIONS AND WARRANTIES
OF LICENSEE

 

9.1           Licensee represents and warrants to Digimarc
that:

 

(a)           Licensee has full power and authority to enter
into this Agreement; and

 

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CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
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(b)           this Agreement when executed and delivered by
Licensee shall constitute a valid, binding and enforceable obligation of
Licensee.

 

10.          CONFIDENTIALITY

 

10.1         Except as otherwise expressly permitted by this
Agreement, a Recipient shall not use, reproduce or disclose the Confidential
Information of the Discloser for any purpose other than as reasonably necessary
to comply with its obligations under this Agreement or to exercise any rights
or licenses granted to it under or pursuant to this Agreement.

 

10.2         The Recipient shall protect the Confidential
Information of the Discloser from disclosure by using the same degree of care,
which shall be no less than a reasonable degree of care, as the Recipient uses
to protect its own confidential information.

 

10.3         On written request from the Discloser, the
Recipient shall return, or certify the destruction of, all originals and copies
of the Discloser’s Confidential Information in the Recipient’s possession or control
which the Recipient does not need to retain in order to perform any obligations
imposed, or exercise any rights acquired, by this Agreement.

 

10.4         A Recipient may, on a need to know basis, and
only for the purposes described in clause 10.1, give the other party’s
Confidential Information to the Recipient’s employees, authorized
subcontractors or representatives provided that such employee, subcontractor or
representative shall have entered into a non-disclosure agreement in respect of
such Confidential Information in favour of the Discloser on terms materially
similar to the provisions of this clause 10.

 

10.5         The obligations set out in this clause 10 will
not apply to any Confidential Information that:

 

(a)           is or becomes publicly available other than
through the fault of the Recipient;

 

(b)           was
known to the Recipient prior to disclosure as shown by documentation sufficient
to establish such knowledge;

 

(c)           was or
is lawfully disclosed to the Recipient by a third party who did not breach any
obligation of confidence by such disclosure and who made the disclosure without
restriction on further disclosure all of which is shown by documentation
sufficient to establish same; or

 

(d)           is
required by law to be disclosed provided, however, that the Recipient shall
first give written notice to the Discloser before the disclosure so that the
Discloser may seek an appropriate protective order.

 

The fact that Confidential
Information, or any part thereof, can be linked together by a search of
publications and other information, followed by a selection of a series of such
items of 

 

**
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knowledge from unconnected
sources, and fitting together those items of knowledge so as to duplicate or
recreate any item of Confidential Information, shall not be deemed to cause the
Confidential Information, or any part thereof, to be included within exceptions
(a), (b) or (c), above.

 

10.6         Each party hereby consents to any court order sought
by the other party to enjoin non-compliance, or to require compliance, by the
party with any of the party’s obligations under this clause 10.

 

10.7         Nothing in this Agreement shall be construed to
require Licensee or any representative of Licensee to disclose any information
which is confidential to a third party including for greater certainty an [**].

 

11.           DISPUTE RESOLUTION

 

11.1         Any Dispute as the term is defined in the
Arbitration Agreement shall be finally settled by Arbitration in accordance with
the Arbitration Agreement.

 

11.2         Unless otherwise agreed between the parties or
unless the subject matter of the dispute resolution proceedings is a party’s
right to terminate this Agreement, the Services shall continue during the
dispute resolution proceedings and payments due to Digimarc shall not be
withheld on account of such proceedings unless that particular Services or
payment is the subject matter of the proceedings.  In the latter case, Digimarc may suspend
continued provision of the disputed Services until the dispute resolution
proceeding is concluded unless Licensee instructs Digimarc to continue the
provision of the disputed Services, in which case Digimarc shall act in
accordance with such instructions, subject to payment of the fees due for such
Services.

 

12.           TERM

 

12.1         This Agreement shall take effect on the
Effective Date and shall remain in force for one (1) year thereafter (the “Term”)
unless sooner terminated as provided herein. 
[**], Licensee may in its sole discretion renew the Agreement for one (1) or
more successive one (1) year Terms on no less than sixty (60) days notice
prior to the last day of a Term.

 

12.2         Either party may terminate this Agreement if
the other party breaches any of its obligations under this Agreement and fails
to remedy such breach within thirty (30) days after receiving written notice of
such breach from the other party.

 

12.3         Upon termination of this Agreement each party
shall return or certify the destruction of, to the Discloser, all originals and
copies of the Discloser’s Confidential Information in the party’s possession or
control which the party does not need to retain in order to exercise any rights
acquired by this Agreement.

 

12.4         No termination of this Agreement will in any
manner release, or be construed as releasing, any party from any liability
arising out of or in connection with that party’s breach of or 

 

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failure to perform any covenant,
duty or obligation contained herein prior to the date of such termination.

 

13.          FORCE MAJEURE

 

13.1         If the performance by either party of any of
its obligations under this Agreement is prevented or delayed by any
circumstance of force majeure (which shall mean fire, flood, earthquakes, war,
riots, or insurrection) the party shall immediately notify the other party.

 

13.2         The time period within which the party delayed
is obliged to perform its obligations will be delayed during the period such
circumstance exists.  During the period
of delay the party delayed shall use its best efforts to make alternate
arrangements satisfactory to the other party to

 

avoid delay or resume
performance.

 

14.           NOTICES

 

14.1         All notices under this Agreement shall be
delivered by fax, certified mail, return receipt requested, or recognized
international courier service.  The
notice shall be deemed effective as of the date of delivery to the address of
the party specified below as evidenced by a delivery receipt or the addressee’s
registry of incoming correspondence. 
Unless otherwise expressly set out in this Agreement, all notices to a
party will be sent to the party’s authorized representative identified below
and all notices from a party will be sent by the party’s authorized representative
identified below.

 

14.2         Any notice to DIGIMARC shall be sent to both
of, and any notice from Digimarc shall be sent by either:

 

Mr. Bruce
Davis

President and CEO

Digimarc Corporation

One Centerpointe Drive

Suite 500

Lake Oswego, Oregon 97035 USA

FAX: (503) 968-0219

 

Mr. William
Y. Conwell

Klarquist, Sparkman,  Campbell,

Leigh & Whinston

121 SW Salmon Street

Suite 1600

Portland, Oregon 97204USA

FAX: (503) 228-9446

 

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  14.3

  	
  Any notice to Licensee shall
  be sent to both of, and any notice from Licensee shall be sent by:

  
	
   

  	
   

  
	
  TBD

  	
   

  
	
   

  	
   

  
	
  TBD

  	
   

  
	
   

  	
   

  
	
  14.4

  	
  A party may change its address
  for notice by notice to the other party in accordance with the provisions of
  this clause 14.

  
	
   

  	
   

  
	
  14.5

  	
  A copy of every notice sent by
  either party shall be sent to: [**]

  
	
   

  	
   

  
	
  15.

  	
  MISCELLANEOUS PROVISIONS

  
	
   

  	
   

  
	
  15.1

  	
  Remedies
  Cumulative -
  Except as otherwise expressly set out in this Agreement:

  
	
   

  	
   

  
	
  (a)

  	
  each and every right, power
  and remedy of a party will be considered to be cumulative with and in
  addition to any other right, power and remedy which such party may have at
  law or in equity in the event of breach of any of the terms of this
  Agreement;

  
	
   

  	
   

  
	
  (b)

  	
  the exercise or partial
  exercise of any right, power or remedy will neither constitute the exclusive
  election thereof nor the waiver of any other right, power or remedy available
  to such party; and

  
	
   

  	
   

  
	
  (c)

  	
  a party terminating this
  Agreement in accordance with the provisions of the Termination clause will
  have no liability or obligation to the other as a result of or with respect
  to the termination.

  

 

15.2       Severability - If any part of this Agreement is held by an
arbitral tribunal appointed pursuant to the Arbitration Agreement or by any other
competent authority to be void or unenforceable, the parties agree that such
determination will not result in the nullity or unenforceability of the
remaining parts of this Agreement, which will continue in force to the fullest
extent permitted by law.  The parties
further agree to replace such void or unenforceable part of this Agreement with
a valid and enforceable provision that will achieve, to the extent legally
permissible, the economic, business and other purposes of the void or
unenforceable part.

 

15.3       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.

 

15.4       Entire Agreement.  This
Agreement is intended by the parties to be the final expression of their
agreement and constitutes and embodies the entire agreement and understanding
between the parties hereto and constitutes a complete and exclusive statement
of the terms and conditions thereof, and will supersede any and all prior
correspondence, conversations, negotiations, agreements or understandings
between the parties relating to the same subject matter.

 

15.5       Amendments.  No
change in, modification of or addition to the terms and conditions contained
herein will be valid as between the parties unless set forth in a writing that
is signed by 

 

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

 

 

an authorized representative of
each party and which specifically states that it constitutes an amendment to
this Agreement.

 

15.6         Waiver.  No
waiver of any term, provision, or condition of this Agreement will be effective
unless in a written document signed by the waiving party and no such waiver in
any one or more instances will be deemed to be, or be construed as, a further
or continuing waiver of that term, provision or condition or any other term,
provision or condition of this Agreement.

 

15.7         Assignment and Successors.      This Agreement
may not be assigned by Licensee without the prior written consent of the
Digimarc, which consent may be withheld or given, with or without conditions at
Digimarc’s sole discretion.  This
Agreement and all of its terms, conditions, and covenants are intended to be
fully effective and binding, to the extent permitted by law, on the successors
and permitted assigns of the parties hereto.

 

15.8         Captions.     Captions are
provided in this Agreement for convenience only and they form no part, and are
not to serve as a basis for interpretation, of this Agreement, nor as evidence
of the intention of the parties.

 

15.9         Disclaimer of Agency. 
Nothing contained in this Agreement is intended or will be interpreted
so as to constitute the parties to this Agreement as partners or joint
venturers or as agents of each other. Neither party will have any express or
implied right or authority to assume or create any obligations on behalf of or
in the name of any other party or to bind any other party in any contract,
agreement or undertaking with any third party. No employee of a party shall be
deemed or considered to be an employee of the other party or of both parties.

 

15.10       Effectiveness.  This
Agreement shall be effective only after it is signed by both of the parties.

 

15.11       Ambiguities.   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 shall not apply
in interpreting this Agreement.

 

15.12       Survival.  All
clauses of this Agreement which expressly or by implication are intended to
survive the termination of this Agreement will do so and, for greater certainty
and notwithstanding any provision in this Agreement to the contrary, the
provisions of clauses 4.2, 4.3, 4.4, 10, 11, 14 and 15 of this Agreement shall
survive termination of this Agreement by either party for any reason.

 

IN WITNESS
WHEREOF, this
Agreement has been executed and delivered by the parties hereto as of the
Effective Date.

 

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

 

 

	
  TBD

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Signature

  	
   

  
	
  Name:

  	
   

  
	
  Title:

  	
   

  
	
  Date

  	
   

  
	
   

  	
   

  
	
  DIGIMARC CORPORATION

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Signature

  	
   

  
	
  Name:

  	
   

  
	
  Title:

  	
   

  
	
  Date:

  	
   

  

 

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

 

 

ATTACHMENT 1

 

SOFTWARE PROBLEM REPORT

 

Each problem report will contain
all information necessary to reproduce or demonstrate the occurrence of the
problem.  Problem reports will be in
English and will be delivered electronically in a format to be provided by
Digimarc.

 

Problem reports will contain:

 

Date
problem was encountered

Detailed
description of the problem, including the frequency with which the problem
occurs

Name
and version number of the program / system component that exhibits the problem

Step by
step instructions to reproduce the problem

All
data files required to reproduce the problem

[**]

Manufacturer
and Model

CPU
type and speed

Amount
of memory

Operating
System and Version

Disk
Configuration (number of drives, total space per drive, free space per drive)

Display
Adapter Model, Resolution, Number of colors

Peripheral
configuration (where applicable)

[**]

TWAIN
driver and version number

[**]

Severity
of problem

Contact
information for person to contact for further information (name, phone number,
FAX number, email address)

 

Licensee agrees to work with
Digimarc to provide reasonable additional information and perform reasonable
additional tests, as requested by Digimarc, to assist Digimarc in resolution of
the problem.

 

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

 

 

SCHEDULE “P”

 

FEES FOR INTEGRATION SUPPORT AND VERIFICATION
TESTING

 

Digimarc
shall bill [**] for Services in one hour increments at the following hourly
rates:

 

	
  Technical/Design Consultant

  	
   

  	
  $

  	
  [**]

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Senior Engineer

  	
   

  	
  $

  	
  [**]

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  R&D/Engineering Executive

  	
   

  	
  $

  	
  [**]

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Project Manager

  	
   

  	
  $

  	
  [**]

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Administrator/Scheduler

  	
   

  	
  $

  	
  [**]

  	
   

  

 

Fees for Services will be
invoiced on the earlier of 1) the last day of the month or 2) the completion of
the Service.  Invoices are due thirty
(30) days from the date of receipt of a correct invoice.  A late charge of 1.5% per month will be
charged on any late payments.  All fees
are due and payable in US funds.

 

The [**] will reimburse Digimarc
for all out-of-pocket expenses reasonably and necessarily incurred in providing
the Services.  Expenses will be itemized
and reported by category.  Out-of-pocket
expenses will not be “marked up” by Digimarc. 
Costs include, but are not limited to, reasonable travel and lodging
expenses, telephone and fax charges, postage and overnight deliveries, and
charges for rental equipment or materials purchased specifically to be used in
providing the Services.  All invoices for
out-of-pocket expenses will be issued monthly in arrears and are due thirty
(30) days from the date of receipt of a correct invoice. Supporting receipts
and vouchers shall be available for review at Digimarc’s offices. A late charge
of 1.5% per month will be charged on any late payments.  All out-of-pocket expenses will be billed and
payable in US funds. Payments will additionally include Value Added taxes and
other tariffs and fees that may be imposed by any government other than the
United States.

 

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

 

 

SCHEDULE “Q”

 

TRAINING

 

1.0           As part of [**], Digimarc shall develop a program of
training acceptable to the DLA Project Manager in [**].

 

2.0           Digimarc shall deliver the Training as follows:

 

2.1           Digimarc shall provide the Training to up to two (2) people
simultaneously.  The trainees will be
experienced in digital design system operation.

 

2.2           Digimarc shall conduct the Training at the facilities of
[**] or, at the request of the [**], at Digimarc’s facilities or at some other
place agreed between Digimarc and the [**].

 

2.3           Digimarc shall give the [**] reasonable notice concerning
the equipment which Digimarc will require in order to conduct the
Training.  The [**] shall provide all
such equipment at its own expense.  If the
parties are unable to agree on the equipment to be provided either party may
refer the matter for decision to the DLA Contract Authority.

 

2.4           Digimarc shall conduct the Training using the [**].

 

2.5           Digimarc shall provide a training manual in English to
every trainee.  Any translation or
interpretation which the trainees may require will be provided by [**] at its
own expense.

 

2.6           Digimarc shall provide each trainee with a certificate of
training at the completion of the Training session.

 

2.7           Digimarc shall conduct the training in English.

 

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

 

 

SCHEDULE “R”

 

SOFTWARE PROBLEM REPORT

 

Each problem report will contain
all information necessary to reproduce or demonstrate the occurrence of the
problem. Problem reports will be in English and will be delivered
electronically in a format to be provided by Digimarc.

 

Problem reports will contain:

 

·                                          Date problem was encountered

·                                          Detailed description of the problem, including the frequency with
which the problem occurs

·                                          Name and version number of the program / system component that
exhibits the problem

·                                          Step by step instructions to reproduce the problem

·                                          All data files required to reproduce the problem

·                                          PC configuration

·                                          Manufacturer and Model

·                                          CPU type and speed

·                                          Amount of memory

·                                          Operating System and Version

·                                          Disk Configuration (number of drives, total space per drive, free
space per drive)

·                                          Display Adapter Model, Resolution, Number of colors

·                                          Peripheral configuration (where applicable)

·                                          Scanner Manufacturer and Model

·                                          TWAIN driver and version number

·                                          Scanning resolution

·                                          Severity of problem

·                                          Contact information for person to contact for further information
(name, phone number, FAX number, email address)

 

[**] agrees to work with
Digimarc to provide reasonable additional information and perform reasonable
additional tests, as requested by Digimarc, to assist Digimarc in resolution of
the problem.

 

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

 

 

DLA: SCHEDULE “S”

 

PROFORMA INVOICE

MONTH, YEAR

[**] DEVELOPMENT SERVICES

 

	
   

  	
   

  	
   

  	
   

  	
  Project 1

  	
   

  	
  Project 2

  	
   

  	
  Add columns

  as necessary

  	
   

  	
  Sub-total

  	
   

  	
  Program

  Wide

  	
   

  	
  Total

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Engineering Labor

  	
   

  	
  Hourly Rate

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Executive

  	
   

  	
  $

  	
  999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  
	
  Director

  	
   

  	
  $

  	
  999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  
	
  Engineering Manager

  	
   

  	
  $

  	
  999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  
	
  Engineer - SW Development

  	
   

  	
  $

  	
  999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  
	
  Engineer - R&D

  	
   

  	
  $

  	
  999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  
	
  QA Engineer

  	
   

  	
  $

  	
  999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  
	
  Sub-total

  	
   

  	
   

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Business Team Labor

  	
   

  	
  Hourly Rate

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Executive

  	
   

  	
  $

  	
  999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  
	
  Project Director

  	
   

  	
  $

  	
  999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  
	
  Lawyer

  	
   

  	
  $

  	
  999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  
	
  Account Manager

  	
   

  	
  $

  	
  999.99

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Product Manager

  	
   

  	
  $

  	
  999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  
	
  [**] Engineer

  	
   

  	
  $

  	
  999.99

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Technical Writer

  	
   

  	
  $

  	
  999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  
	
  Sub-total

  	
   

  	
   

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Total Labor

  	
   

  	
   

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Expenses

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Consulting

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Name consultant 1

  	
   

  	
   

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  
	
  Name consultant 2

  	
   

  	
   

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  
	
  Add names as necessary

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sub-total: Consulting

  	
   

  	
   

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Equipment

  	
   

  	
   

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  
	
  Equipment - [**]

  	
   

  	
   

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  
	
  Security costs

  	
   

  	
   

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  
	
  Postage and shipping

  	
   

  	
   

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  
	
  Communications

  	
   

  	
   

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  
	
  Internet

  	
   

  	
   

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  
	
  [**] Research

  	
   

  	
   

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  
	
  Travel

  	
   

  	
   

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  
	
  Other authorized expenses
  under Schedule I

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Description 1

  	
   

  	
   

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  
	
  Description 2

  	
   

  	
   

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  
	
  Sub-total

  	
   

  	
   

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Total

  	
   

  	
   

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Total Due

  	
   

  	
   

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

Note:
A 15% charge is included in the Expenses.

 

Wiring
Instructions:

Payable
to Digimarc Corporation, General Account.

 

Note: A change to the wiring instructions on
this invoice is deemed to be a duly authorized change by Digimarc.

 

	
  DLA:
  Schedule “S”

  	
   

  	
  27
  February [**]

  
	
  DLA: SCHEDULE “S”

  	
   

  	
   

  

 

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

 

 

PROFORMA INVOICE

MONTH, YEAR

[**] DEVELOPMENT SERVICES

 

	
   

  	
   

  	
  Project 1

  Hours

  	
   

  	
  Project 2

  Hours

  	
   

  	
  Add columns

  as necessary

  Hours

  	
   

  	
  Sub-total

  Hours

  	
   

  	
  Program Wide

  Hours

  	
   

  	
  Total

  	
   

  
	
  Engineering Labor

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Executive

  	
   

  	
  999,999.99

  	
   

  	
  999,999.99

  	
   

  	
  999,999.99

  	
   

  	
  999,999.99

  	
   

  	
  999,999.99

  	
   

  	
  999,999.99

  	
   

  
	
  Director

  	
   

  	
  999,999.99

  	
   

  	
  999,999.99

  	
   

  	
  999,999.99

  	
   

  	
  999,999.99

  	
   

  	
  999,999.99

  	
   

  	
  999,999.99

  	
   

  
	
  Engineering Manager

  	
   

  	
  999,999.99

  	
   

  	
  999,999.99

  	
   

  	
  999,999.99

  	
   

  	
  999,999.99

  	
   

  	
  999,999.99

  	
   

  	
  999,999.99

  	
   

  
	
  Engineer - SW Development

  	
   

  	
  999,999.99

  	
   

  	
  999,999.99

  	
   

  	
  999,999.99

  	
   

  	
  999,999.99

  	
   

  	
  999,999.99

  	
   

  	
  999,999.99

  	
   

  
	
  Engineer - R&D

  	
   

  	
  999,999.99

  	
   

  	
  999,999.99

  	
   

  	
  999,999.99

  	
   

  	
  999,999.99

  	
   

  	
  999,999.99

  	
   

  	
  999,999.99

  	
   

  
	
  QA Engineer

  	
   

  	
  999,999.99

  	
   

  	
  999,999.99

  	
   

  	
  999,999.99

  	
   

  	
  999,999.99

  	
   

  	
  999,999.99

  	
   

  	
  999,999.99

  	
   

  
	
  Sub-total

  	
   

  	
  999,999.99

  	
   

  	
  999,999.99

  	
   

  	
  999,999.99

  	
   

  	
  999,999.99

  	
   

  	
  999,999.99

  	
   

  	
  999,999.99

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Business Team Labor

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Executive

  	
   

  	
  999,999.99

  	
   

  	
  999,999.99

  	
   

  	
  999,999.99

  	
   

  	
  999,999.99

  	
   

  	
  999,999.99

  	
   

  	
  999,999.99

  	
   

  
	
  Project Director

  	
   

  	
  999,999.99

  	
   

  	
  999,999.99

  	
   

  	
  999,999.99

  	
   

  	
  999,999.99

  	
   

  	
  999,999.99

  	
   

  	
  999,999.99

  	
   

  
	
  Lawyer

  	
   

  	
  999,999.99

  	
   

  	
  999,999.99

  	
   

  	
  999,999.99

  	
   

  	
  999,999.99

  	
   

  	
  999,999.99

  	
   

  	
  999,999.99

  	
   

  
	
  Account Manager

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Product Manager

  	
   

  	
  999,999.99

  	
   

  	
  999,999.99

  	
   

  	
  999,999.99

  	
   

  	
  999,999.99

  	
   

  	
  999,999.99

  	
   

  	
  999,999.99

  	
   

  
	
  [**] Engineer

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Technical Writer

  	
   

  	
  999,999.99

  	
   

  	
  999,999.99

  	
   

  	
  999,999.99

  	
   

  	
  999,999.99

  	
   

  	
  999,999.99

  	
   

  	
  999,999.99

  	
   

  
	
  Sub-total

  	
   

  	
  999,999.99

  	
   

  	
  999,999.99

  	
   

  	
  999,999.99

  	
   

  	
  999,999.99

  	
   

  	
  999,999.99

  	
   

  	
  999,999.99

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Total Labor

  	
   

  	
  999,999.99

  	
   

  	
  999,999.99

  	
   

  	
  999,999.99

  	
   

  	
  999,999.99

  	
   

  	
  999,999.99

  	
   

  	
  999,999.99

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Consulting

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Name consultant 1

  	
   

  	
  999,999.99

  	
   

  	
  999,999.99

  	
   

  	
  999,999.99

  	
   

  	
  999,999.99

  	
   

  	
  999,999.99

  	
   

  	
  999,999.99

  	
   

  
	
  Name consultant 2

  	
   

  	
  999,999.99

  	
   

  	
  999,999.99

  	
   

  	
  999,999.99

  	
   

  	
  999,999.99

  	
   

  	
  999,999.99

  	
   

  	
  999,999.99

  	
   

  
	
  Add names as necessary

  	
   

  	
  999,999.99

  	
   

  	
  999,999.99

  	
   

  	
  999,999.99

  	
   

  	
  999,999.99

  	
   

  	
  999,999.99

  	
   

  	
  999,999.99

  	
   

  
	
  Sub-total: Consulting

  	
   

  	
  999,999.99

  	
   

  	
  999,999.99

  	
   

  	
  999,999.99

  	
   

  	
  999,999.99

  	
   

  	
  999,999.99

  	
   

  	
  999,999.99

  	
   

  

 

	
  DLA:
  Schedule “S”

  	
   

  	
  27
  February [**]

  
	
   

  	
   

  	
   

  
	
  DLA: SCHEDULE “S”

  	
   

  	
   

  

 

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

 

 

PROFORMA INVOICE

MONTH, YEAR

[**] SERVICES

 

	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Summary of

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Summary of

  	
   

  	
  all [**]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  all [**]

  	
   

  	
  including [**]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  including [**]

  Research

  	
   

  	
  Research

  Hours

  	
   

  
	
  Engineering Labor

  	
   

  	
  Hourly Rate

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Executive

  	
   

  	
  $

  	
  999.99

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Director

  	
   

  	
  $

  	
  999.99

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Engineering Manager

  	
   

  	
  $

  	
  999.99

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Engineer - SW Development

  	
   

  	
  $

  	
  999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  999,999.99

  	
   

  
	
  Engineer - R&D

  	
   

  	
  $

  	
  999.99

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  QA Engineer

  	
   

  	
  $

  	
  999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  999,999.99

  	
   

  
	
  Sub-total

  	
   

  	
   

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  999,999.99

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Business Team Labor

  	
   

  	
  Hourly Rate

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Executive

  	
   

  	
  $

  	
  999.99

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Project Director

  	
   

  	
  $

  	
  999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  999,999.99

  	
   

  
	
  Lawyer

  	
   

  	
  $

  	
  999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  999,999.99

  	
   

  
	
  Account Manager

  	
   

  	
  $

  	
  999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  999,999.99

  	
   

  
	
  Product Manager

  	
   

  	
  $

  	
  999.99

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  [**] Engineer

  	
   

  	
  $

  	
  999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  999,999.99

  	
   

  
	
  Technical Writer

  	
   

  	
  $

  	
  999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  999,999.99

  	
   

  
	
  Sub-total

  	
   

  	
   

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  999,999.99

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Total Labor

  	
   

  	
   

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  999,999.99

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Expenses

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Consulting

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Name consultant 1

  	
   

  	
   

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  999,999.99

  	
   

  
	
  Name consultant 2

  	
   

  	
   

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  999,999.99

  	
   

  
	
  Add names as necessary

  	
   

  	
   

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  999,999.99

  	
   

  
	
  Sub-total: Consulting

  	
   

  	
   

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  999,999.99

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Equipment

  	
   

  	
   

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
   

  	
   

  
	
  Equipment - [**]

  	
   

  	
   

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
   

  	
   

  
	
  Security costs

  	
   

  	
   

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
   

  	
   

  
	
  Postage and shipping

  	
   

  	
   

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
   

  	
   

  
	
  Communications

  	
   

  	
   

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
   

  	
   

  
	
  Internet

  	
   

  	
   

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
   

  	
   

  
	
  [**] Research

  	
   

  	
   

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
   

  	
   

  
	
  Travel

  	
   

  	
   

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
   

  	
   

  
	
  Other authorized expenses
  under Schedule I

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Description 1

  	
   

  	
   

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
   

  	
   

  
	
  Description 2

  	
   

  	
   

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
   

  	
   

  
	
  Sub-total

  	
   

  	
   

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Total

  	
   

  	
   

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Total Due

  	
   

  	
   

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
   

  	
   

  

 

	
  DLA:
  Schedule “S”

  	
   

  	
  27
  February [**]

  
	
   

  	
   

  	
   

  
	
  DLA: SCHEDULE “S”

  	
   

  	
   

  
	
   

  	
   

  	
   

  

 

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

 

 

PROFORMA INVOICE

MONTH, YEAR

[**] SERVICES

 

	
   

  	
   

  	
   

  	
   

  	
  [**]

  	
   

  	
  [**]

  	
   

  	
  [**]

  	
   

  	
  [**]

  	
   

  	
  [**]

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Research

  	
   

  	
  [**]

  	
   

  	
  [**]

  	
   

  	
  [**]

  	
   

  	
  Activities

  	
   

  	
  Maintenance

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Engineering Labor

  	
   

  	
  Hourly
  Rate

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Executive

  	
   

  	
  $

  	
  999.99

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Director

  	
   

  	
  $

  	
  999.99

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Engineering Manager

  	
   

  	
  $

  	
  999.99

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Engineer - SW Development

  	
   

  	
  $

  	
  999.99

  	
   

  	
   

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  
	
  Engineer - R&D

  	
   

  	
  $

  	
  999.99

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  QA Engineer

  	
   

  	
  $

  	
  999.99

  	
   

  	
   

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  
	
  Sub-total

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Business Team Labor

  	
   

  	
  Hourly
  Rate

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Executive

  	
   

  	
  $

  	
  999.99

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Project Director

  	
   

  	
  $

  	
  999.99

  	
   

  	
   

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  
	
  Lawyer

  	
   

  	
  $

  	
  999.99

  	
   

  	
   

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  
	
  Account Manager

  	
   

  	
  $

  	
  999.99

  	
   

  	
   

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  
	
  Product Manager

  	
   

  	
  $

  	
  999.99

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  [**] Engineer

  	
   

  	
  $

  	
  999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  
	
  Technical Writer

  	
   

  	
  $

  	
  999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  
	
  Sub-total

  	
   

  	
   

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Total Labor

  	
   

  	
   

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Expenses

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Consulting

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Name consultant 1

  	
   

  	
   

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  
	
  Name consultant 2

  	
   

  	
   

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  
	
  Add names as necessary

  	
   

  	
   

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  
	
  Sub-total: Consulting

  	
   

  	
   

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Equipment

  	
   

  	
   

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  
	
  Equipment - [**]

  	
   

  	
   

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  
	
  Security costs

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Postage and shipping

  	
   

  	
   

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  
	
  Communications

  	
   

  	
   

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  
	
  Internet

  	
   

  	
   

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  [**] Research

  	
   

  	
   

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Travel

  	
   

  	
   

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
   

  	
   

  
	
  Other authorized expenses under Schedule I

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Description 1

  	
   

  	
   

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  
	
  Description 2

  	
   

  	
   

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  
	
  Sub-total

  	
   

  	
   

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Total

  	
   

  	
   

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  	
  $

  	
  999,999.99

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  [**]

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  DLA: Schedule “S”

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  27
  February [**]

  	
   

  	
   

  	
   

  

 

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

 

 

PROFORMA INVOICE

MONTH, YEAR

[**] SERVICES

 

	
   

  	
   

  	
  [**]

  	
   

  	
  [**]

  	
   

  	
  [**]

  	
   

  	
  [**]

  	
   

  	
  [**]

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Research

  	
   

  	
  [**]

  	
   

  	
  [**]

  	
   

  	
  [**]

  	
   

  	
  Activities

  	
   

  	
  Maintenance

  	
   

  
	
   

  	
   

  	
  Hours

  	
   

  	
  Hours

  	
   

  	
  Hours

  	
   

  	
  Hours

  	
   

  	
  Hours

  	
   

  	
  Hours

  	
   

  
	
  Engineering Labor

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Executive

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Director

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Engineering Manager

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Engineer - SW Development

  	
   

  	
   

  	
   

  	
  999,999.99

  	
   

  	
  999,999.99

  	
   

  	
  999,999.99

  	
   

  	
  999,999.99

  	
   

  	
  999,999.99

  	
   

  
	
  Engineer - R&D

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  QA Engineer

  	
   

  	
   

  	
   

  	
  999,999.99

  	
   

  	
  999,999.99

  	
   

  	
  999,999.99

  	
   

  	
  999,999.99

  	
   

  	
  999,999.99

  	
   

  
	
  Sub-total

  	
   

  	
   

  	
   

  	
  999,999.99

  	
   

  	
  999,999.99

  	
   

  	
  999,999.99

  	
   

  	
  999,999.99

  	
   

  	
  999,999.99

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Business Team Labor

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Executive

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Project Director

  	
   

  	
   

  	
   

  	
  999,999.99

  	
   

  	
  999,999.99

  	
   

  	
  999,999.99

  	
   

  	
  999,999.99

  	
   

  	
  999,999.99

  	
   

  
	
  Lawyer

  	
   

  	
   

  	
   

  	
  999,999.99

  	
   

  	
  999,999.99

  	
   

  	
  999,999.99

  	
   

  	
  999,999.99

  	
   

  	
  999,999.99

  	
   

  
	
  Account Manager

  	
   

  	
   

  	
   

  	
  999,999.99

  	
   

  	
  999,999.99

  	
   

  	
  999,999.99

  	
   

  	
  999,999.99

  	
   

  	
  999,999.99

  	
   

  
	
  Product Manager

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  [**] Engineer

  	
   

  	
  999,999.99

  	
   

  	
  999,999.99

  	
   

  	
  999,999.99

  	
   

  	
  999,999.99

  	
   

  	
  999,999.99

  	
   

  	
  999,999.99

  	
   

  
	
  Technical Writer

  	
   

  	
  999,999.99

  	
   

  	
  999,999.99

  	
   

  	
  999,999.99

  	
   

  	
  999,999.99

  	
   

  	
  999,999.99

  	
   

  	
  999,999.99

  	
   

  
	
  Sub-total

  	
   

  	
  999,999.99

  	
   

  	
  999,999.99

  	
   

  	
  999,999.99

  	
   

  	
  999,999.99

  	
   

  	
  999,999.99

  	
   

  	
  999,999.99

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Total Labor

  	
   

  	
  999,999.99

  	
   

  	
  999,999.99

  	
   

  	
  999,999.99

  	
   

  	
  999,999.99

  	
   

  	
  999,999.99

  	
   

  	
  999,999.99

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Expenses

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Consulting

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Name consultant 1

  	
   

  	
  999,999.99

  	
   

  	
  999,999.99

  	
   

  	
  999,999.99

  	
   

  	
  999,999.99

  	
   

  	
  999,999.99

  	
   

  	
  999,999.99

  	
   

  
	
  Name consultant 2

  	
   

  	
  999,999.99

  	
   

  	
  999,999.99

  	
   

  	
  999,999.99

  	
   

  	
  999,999.99

  	
   

  	
  999,999.99

  	
   

  	
  999,999.99

  	
   

  
	
  Add names as necessary

  	
   

  	
  999,999.99

  	
   

  	
  999,999.99

  	
   

  	
  999,999.99

  	
   

  	
  999,999.99

  	
   

  	
  999,999.99

  	
   

  	
  999,999.99

  	
   

  
	
  Sub-total: Consulting

  	
   

  	
  999,999.99

  	
   

  	
  999,999.99

  	
   

  	
  999,999.99

  	
   

  	
  999,999.99

  	
   

  	
  999,999.99

  	
   

  	
  999,999.99

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  [**]

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  DLA: Schedule “S”

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  27 February [**]

  	
   

  	
   

  	
   

  

 

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

 

 

SCHEDULE
“T”

 

AGREED
FORM DEED OF ADHERENCE

 

THIS DEED is made on [                                                                               ]

 

BY [NAME OF SUBSTITUTE] (“Substitute”) of
[INSERT ADDRESS]

 

WHEREAS

 

(A)                              At the request of [**], the Substitute is willing to become a party
to the Counterfeit Deterrence System Development and License Agreement of [                                        ],
1999 (“DLA”) between the [**] and Digimarc Corporation (“Digimarc”) in
substitution for and to the exclusion of the[**]

 

(B)                                The Substitute is permitted so to become a party to the DLA pursuant
to clause 19.8 of the DLA.

 

NOW THIS DEED
WITNESSES that with effect from (and
including) the date of this Deed, the Substitute agrees with Digimarc to become
a party to the DLA in substitution for and to the exclusion of the [**] so that
the Substitute, and not the [**], shall have the benefit of, and be subject to
the obligations of, the [**] under the DLA, whether arising before, on or after
the date of this Deed.

 

Executed as a deed and delivered on the date
written at the start of this Deed by

 

[Substitute]

 

acting by

 

[duly authorized signatory]

 

[second duly authorised signatory (where
necessary)]

 

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

 

 

SCHEDULE
“U”

 

COMFORT
LETTER

 

	
  From:

  	
  [**]

  
	
   

  	
   

  
	
  To:

  	
  Digimarc Corporation

  

 

Dear Sirs:

 

We refer to
the Development and License Agreement (“DLA”) entered into between us on                                               ,
1999.

 

We hereby
exercise our right of substitution under clause 19.8(a) of the DLA in
favour of [Substitute]; and attach a Deed of Adherence in the form of Schedule “T”
to the DLA duly executed by the Substitute.

 

	
   

  	
  We are writing to confirm that
  [Substitute]:

  
	
   

  	
   

  
	
  1.

  	
  Is lawfully organized and existing;

  
	
   

  	
   

  
	
  2.

  	
  Is fully qualified, legally and otherwise,
  to assume the rights and obligations of [**] under the DLA, pursuant to the
  Deed of Adherence; and under the Escrow Agreement; and

  
	
   

  	
   

  
	
  3.

  	
  Has access to and the benefit of all the
  facilities previously available to [**] for the exercise of its obligations
  under the DLA and the Escrow Agreement.

  

 

Yours
faithfully,

 

 

[**]

 

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

 

 

DLA SCHEDULE “V”

PHASE [**] STATEMENT OF WORK

 

DESCRIPTION OF PHASE [**] WORK

 

Digimarc
shall perform the following Work during Phase [**]. (The specific
responsibilities to be discharged by [**] during Phase [**] are also described
below.)

 

1.1           [**] Of The Phase [**]

 

Digimarc shall [**] for acceptance by [**] the Phase
[**] according to the following process:

 

1.             By the date set out in the Delivery
Schedule outlined in Attachment 1, Digimarc shall develop a detailed
Specification for [**] described in Schedule A of the [**] as relates to Phase
[**] and the additional requirements for [**], if any, specified below.

 

2.             Digimarc shall deliver the Specifications
to the DLA Project Manager by the dates set out in the Delivery Schedule for
[**] review, comment and acceptance or rejection.

 

3.             Within thirty (30) calendar days
after receiving them under 2, the DLA Project Manager shall notify the Digimarc
Project Manager in writing whether or not [**] approves the Specifications and
if not, why not. Within fifteen (15) calendar days after receiving notice of
rejection, Digimarc shall change the Specifications [**] and redeliver them to
[**] for approval as provided above.

 

4.             Upon notice of approval under 3,
Digimarc shall [**] will meet the approved Specifications and deliver [**]
against specification requirements.

 

5.             Within thirty (30) calendar days
after receiving [**] under 4, the DLA Project Manager shall notify the Digimarc
Project Manager in writing whether or not [**] meets the Specifications with
details of any non-compliance.   Any
problems shall be detailed using, to the extent appropriate, the [**] Problem
Report form attached as Schedule “R.”

 

6.             By the date set out in the Delivery
Schedule, Digimarc shall develop [**] incorporating any changes required [**]
with the Specifications and any other modifications agreed in writing between
the parties’ respective project managers and deliver [**] to [**] and
acceptance.

 

7.             Within thirty (30) calendar days
after receiving [**] under 6, the DLA Project Manager shall notify the Digimarc
Project Manager in writing whether or not [**] meets the Specifications with
details of any non-compliance. Within thirty (30) calendar days after receiving
any notice of rejection, Digimarc shall rectify all [**] for approval as
provided above.

 

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

 

 

1.2           Acceptance Procedures

 

1.2.1        [**]

 

The acceptance procedures for the [**] will
be the following:

 

1.             Digimarc shall deliver or make
available the [**] to the [**] Project Manager in a [**] that Digimarc will
develop based on [**].  The [**] will
allow the [**] to conduct [**] and [**] as set forth in the Specification.

 

2.             Digimarc shall deliver into escrow
and review with the [**] a detailed description of how the [**] was [**] and
the techniques used to [**].

 

1.2.2        [**]

 

The acceptance procedure for any improvements
to the [**] will be the following:

 

1.                                       Digimarc shall deliver the [**] for [**] to the [**] Project Manager
in an example [**] that Digimarc will develop to allow the [**] to [**] and
[**].

 

2.                                       Digimarc shall deliver or make available the [**] for [**] to the
[**] Project Manager in an example [**] that Digimarc will develop based on
[**]. The example [**] will allow the [**] to [**] and [**].

 

3.                                       Digimarc shall deliver the [**] Project Manager in an example [**]
that Digimarc will develop based on [**] or other [**]. The example [**] will
allow the [**].

 

4.                                       Digimarc shall deliver into escrow and review with the [**] a
detailed description of how the [**] was [**] and the techniques used to [**].

 

1.2.3        [**]

 

The acceptance procedure for any improvements
to the [**] will be the following:

 

1.                                       Digimarc shall deliver the [**], [**], and the [**] to the [**]
Project Manager to allow [**]with the Specifications.

 

2.                                       Digimarc shall deliver updated [**] and training materials to the
[**] Project Manager to allow the [**] to review the materials for acceptance.

 

DESCRIPTION OF, AND
REQUIREMENTS FOR, PHASE [**]

 

2.1           [**]

 

**
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EXCHANGE COMMISSION.

 

 

Digimarc shall develop the [**] according to
the following requirements:

 

2.1.1        [**]

 

Digimarc shall develop [**] to [**].  [**] shall meet the following requirements:

 

[**]1.      [**]for [**] shall be capable of being
[**].

 

2.             [**]for [**] shall be capable of
[**] and shall meet all the requirements of the Specification for [**]. In
addition, the [**] shall meet the performance criteria as determined in the
Specification for [**] for [**] and in addition shall meet or exceed the actual
performance of [**] as specified in the [**] Specification.

 

3.             [**] shall be capable of [**]and
shall meet all the requirements of the Specification for [**] for [**]. In
addition, [**] shall meet the performance criteria as determined in the
Specification for [**] and in addition shall meet or exceed the actual performance
of [**] Specification.  Delivery of such
[**] shall be conditional upon Digimarc [**] Digimarc and the [**] to
intellectual property held [**] in order to [**].

 

4.             Digimarc shall publish the [**]
needed for replacement of the [**] with a suitably designed alternative [**].

 

5.             Detailed requirements for [**] will
be specified in a Specification delivered in accordance with the Delivery
Schedule outlined in Attachment 1.

 

2.1.2        [**]

 

At the end of [**] will be [**] in [**]:

 

[**] As such, the [**] must be [**].

 

1.                                       Digimarc shall develop [**].

 

2.                                       Detailed requirements for [**] will be specified in a Specification
delivered in accordance with the Delivery Schedule outlined in Attachment 1.

 

2.1.3        [**]

 

During the course of the year, [**]
activities will result in the need to improve the [**], either to [**] needs or
to respond to [**], such as [**] or in response to [**].   To ensure delivery of [**] in September [**]and
a [**] in December [**], a detailed Specification for the project must be
completed by February 28, [**].

 

**
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EXCHANGE COMMISSION.

 

 

2.2           [**]

 

2.2.1        [**]

 

The [**] Digimarc shall [**]the [**] to add
[**] for the following [**]:

 

·                  [**]

 

·                  [**]

 

1.                                       Digimarc shall make technology changes to the [**] necessary to
operate [**].

 

2.                                       Digimarc shall make changes to the [**] as necessary to operate
[**].

 

3.                                       Upon [**] acceptance, Digimarc shall release the updated version of
the [**] to [**].

 

4.                                       The [**] documentation will be [**] to reflect [**].

 

2.3           [**]

 

2.3.1                        Digimarc shall maintain and operate the[**]and make it available
at[**].

 

2.4           [**]

 

2.4.1        Digimarc
shall [**]the [**] to [**].

 

**
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EXCHANGE COMMISSION.

 

 

SCHEDULE “W”

 

PHASE [**] STATEMENT OF WORK

 

1.                   DESCRIPTION OF PHASE [**] WORK

 

Digimarc shall perform the following Work
during Phase [**]. (The specific responsibilities to be discharged by [**]
during Phase [**] are also described below.)

 

1.1                     [**] of the Phase [**]Deliverables

 

Digimarc shall [**] for acceptance by [**]
the Phase [**] Deliverables according to the following process:

 

1.             By
the date set out in the Delivery Schedule outlined in Attachment 1, Digimarc
shall develop a detailed Specification for each [**].

 

2.             Digimarc
shall deliver the Specifications to the DLA Project Manager by the dates set
out in the Delivery Schedule for [**] review, comment and acceptance or
rejection.

 

3.             Within
thirty (30) calendar days after receiving [**] under 2, the DLA Project Manager
shall notify the Digimarc Project Manager in writing whether or not [**]
approves the Specifications and if not, why not. Within fifteen (15) calendar
days after receiving notice of rejection, Digimarc shall change the
Specifications to [**] and redeliver [**] to [**] for approval as provided
above.

 

4.             Upon
notice of approval under 3, Digimarc shall [**] that will meet the approved
Specifications.

 

5.             By
the date set out in the [**]Schedule, Digimarc shall [**] that will meet the
approved Specifications.

 

6.             Within
thirty (30) calendar days after receiving [**] under 5, the [**] Project
Manager shall notify the Digimarc Project Manager in writing whether or not
[**] meets the Specifications with details of any non-compliance. Any problems
shall be detailed using, to the extent appropriate, the [**] Problem Report
form attached as Schedule R.

 

7.             Within
thirty (30) calendar days after receiving any notice of rejection, Digimarc
shall rectify all non-compliance and redeliver [**] for approval as provided
above.

 

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

 

 

1.2                     Acceptance Deliverables

 

1.2.1        [**]

 

1.             Digimarc
will deliver the [**] for [**] in the [**]to allow the [**] to [**].

 

2.             Digimarc
will deliver or make available the [**] that Digimarc will [**].  The example [**].

 

3.             Digimarc
will deliver the [**] for [**].  The
example [**].

 

1.2.2        [**]

 

1.             Digimarc
will provide the findings of the study to investigate the [**].

 

1.2.3        [**]

 

1.               Digimarc
will provide the findings of the study to investigate the [**].

 

2.              DESCRIPTION OF, AND REQUIREMENTS FOR, PHASE [**]

 

Digimarc will develop the [**] according to
the requirements described below.

 

2.1                     [**] for Applications and [**]

 

Digimarc shall [**] to meet the following
requirements:

 

1.               [**]
shall be capable of [**].

 

2.               [**]
shall substantially [**].

 

3.               Detailed
requirements for [**]

 

2.2                     [**] Study

 

Digimarc shall investigate [**] that meet the
following requirements:

 

1.               [**],
which may include [**].

 

2.               Technology
that could be [**], which may include a [**].

 

3.               Assessment
of the current [**].

 

**
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EXCHANGE COMMISSION.

 

 

4.               Provide
a strategy for how [**].

 

5.               Detailed
requirements for [**] outlined in Attachment 1.

 

6.               Provide
a technical report of the findings in accordance with the [**] outlined in
Attachment 1.

 

2.3                     [**] Study

 

1.               Digimarc
shall investigate [**]:

 

2.               [**].  The requirements [**].

 

3.               The
costs to [**] to make the [**]

 

4.     Detailed requirements for [**]
will be written in a Specification delivered in accordance with the Delivery
Schedule outlined in Attachment 1.

 

5.               Provide
a technical report of the findings in accordance with the Delivery Schedule
outlined in Attachment 1.

 

2.4                     [**]

 

2.4.1.                     Digimarc shall maintain and operate the [**] and [**]

 

2.5                     [**]

 

2.5.1        Digimarc
shall [**] the [**] to [**] and [**], including administration of the [**].

 

**
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EXCHANGE COMMISSION.

 

 

ATTACHMENT 1: DELIVERY SCHEDULES

 

[**]

 

	
  Num.

  	
   

  	
  Deliverable

  	
   

  	
  Owner

  	
   

  	
  SOW Sec,

  Par. Ref.

  	
   

  	
  Depends

  On

  	
   

  	
  Completion

  Date

  	
   

  
	
  D-1

  	
   

  	
  [**] Draft Specification delivered

  	
   

  	
  [**]

  	
   

  	
  —

  	
   

  	
  —

  	
   

  	
  [**]

  	
   

  
	
  D-2

  	
   

  	
  [**]

  	
   

  	
  [**]

  	
   

  	
  —

  	
   

  	
  —

  	
   

  	
  [**]

  	
   

  
	
  D-3

  	
   

  	
  [**] specification signoff

  	
   

  	
  [**]

  	
   

  	
  1.1.4

  	
   

  	
  [**]

  	
   

  	
  [**]

  	
   

  
	
  D-4

  	
   

  	
  First Progress Update PowerPoint Summary

  	
   

  	
  [**]

  	
   

  	
  —

  	
   

  	
  [**]

  	
   

  	
  [**]

  	
   

  
	
  D-5

  	
   

  	
  Changes to the [**]

  	
   

  	
  [**]

  	
   

  	
  —

  	
   

  	
  [**]

  	
   

  	
  [**]

  	
   

  
	
  D-6

  	
   

  	
  Second Progress Update and Development Status Technical Report

  	
   

  	
  [**]

  	
   

  	
  —

  	
   

  	
  [**]

  	
   

  	
  [**]

  	
   

  
	
  D-7

  	
   

  	
  Third Progress Update / [**]

  	
   

  	
  [**]

  	
   

  	
  —

  	
   

  	
  [**]

  	
   

  	
  [**]

  	
   

  
	
  D-8

  	
   

  	
  Delivery of [**]

  	
   

  	
  [**]

  	
   

  	
  1.1.5

  	
   

  	
  [**]

  	
   

  	
  [**]

  	
   

  
	
  D-9

  	
   

  	
  [**] acceptance of [**]

  	
   

  	
  [**]

  	
   

  	
  1.1.6

  	
   

  	
  [**]

  	
   

  	
  [**]

  	
   

  

 

[**] Study

 

	
  Num.

  	
   

  	
  Deliverable

  	
   

  	
  Owner

  	
   

  	
  Sec/Par.

  Ref.

  	
   

  	
  Depends

  On

  	
   

  	
  Completion

  Date

  	
   

  
	
  DSE-1

  	
   

  	
  Send out Study Plan

  	
   

  	
  [**]

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  [**]

  	
   

  
	
  DSE-2

  	
   

  	
  [**] feedback

  	
   

  	
  [**]

  	
   

  	
   

  	
   

  	
  [**]

  	
   

  	
  [**]

  	
   

  
	
  DSE-3

  	
   

  	
  Signoff of Study Plan

  	
   

  	
  [**]

  	
   

  	
  1.1.4

  	
   

  	
  [**]

  	
   

  	
  [**]

  	
   

  
	
  DSE-4

  	
   

  	
  First Project Update

  	
   

  	
  [**]

  	
   

  	
   

  	
   

  	
  [**]

  	
   

  	
  [**]

  	
   

  
	
  DSE-5

  	
   

  	
  Second Project Update

  	
   

  	
  [**]

  	
   

  	
   

  	
   

  	
  [**]

  	
   

  	
  [**]

  	
   

  
	
  DSE-6

  	
   

  	
  Deliver Final Report

  	
   

  	
  [**]

  	
   

  	
  1.1.5

  	
   

  	
  [**]

  	
   

  	
  [**]

  	
   

  
	
  DSE-8

  	
   

  	
  Final Report Acceptance

  	
   

  	
  [**]

  	
   

  	
  1.1.6

  	
   

  	
  [**]

  	
   

  	
  [**]

  	
   

  

 

[**] Study

 

	
  Num.

  	
   

  	
  Deliverable

  	
   

  	
  Owner

  	
   

  	
  Sec/Par.

  Ref.

  	
   

  	
  Depends

  On

  	
   

  	
  Completion

  Date

  	
   

  
	
  CLP-1

  	
   

  	
  Send out Study Plan

  	
   

  	
  [**]

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  [**]

  	
   

  
	
  CLP-2

  	
   

  	
  [**] feedback

  	
   

  	
  [**]

  	
   

  	
   

  	
   

  	
  [**]

  	
   

  	
  [**]

  	
   

  
	
  CLP-3

  	
   

  	
  Signoff of Study Plan

  	
   

  	
  [**]

  	
   

  	
  1.1.4

  	
   

  	
  [**]

  	
   

  	
  [**]

  	
   

  
	
  CLP-4

  	
   

  	
  Notification of [**] Participation

  	
   

  	
  [**]

  	
   

  	
   

  	
   

  	
  [**]

  	
   

  	
  [**]

  	
   

  

 

**
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EXCHANGE COMMISSION.

 

 

	
  Num.

  	
   

  	
  Deliverable

  	
   

  	
  Owner

  	
   

  	
  Sec/Par.

  Ref.

  	
   

  	
  Depends

  On

  	
   

  	
  Completion

  Date

  	
   

  
	
  CLP-5

  	
   

  	
  First Project Update

  	
   

  	
  [**]

  	
   

  	
   

  	
   

  	
  [**]

  	
   

  	
  [**]

  	
   

  
	
  CLP-6

  	
   

  	
  Deliver Final Report

  	
   

  	
  [**]

  	
   

  	
  1.1.5

  	
   

  	
  [**]

  	
   

  	
  [**]

  	
   

  
	
  CLP-7

  	
   

  	
  Final Report Acceptance

  	
   

  	
  [**]

  	
   

  	
  1.1.6

  	
   

  	
  [**]

  	
   

  	
  [**]

  	
   

  

 

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EXCHANGE COMMISSION.

 

 

SCHEDULE
X:

 

[**]EXPENDITURES

 

Unless authorized in this Agreement, the [**]
Agreement or otherwise agreed in writing by [**],

 

the [**]Expenditure under this Agreement and
the [**] Agreement shall not be greater than an amount equal to [**]; and

 

the [**]Expenditure under this Agreement and
the [**] Agreement shall not be greater than an amount equal to [**].

 

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Schedule “Y”

 

[**]

[**] PLAN

 

PROVIDED TO

 

[**]

 

 

[date]

 

 

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  SITUATION ANALYSIS

  	
   

  	
  2

  	 

	 
	
   

  	
   

  	
   

  
	 
	
  DEPENDENCIES

  	
   

  	
  2

  
	 
	
   

  	
   

  	
   

  
	 
	
  WORK TO BE PERFORMED AS OF JANUARY
  [**]

  	
   

  	
  3

  
	 
	
   

  	
   

  	
   

  
	 
	
  TASK: 1.

  	
  [**]

  	
  3

  
	 
	
  TASK: 2.

  	
  [**] COMPLETION

  	
  4

  
	 
	
  TASK: 3.

  	
  [**] COMPLETION

  	
  5

  
	 
	
  TASK: 4.

  	
  [**] COMMITMENT TO [**]

  	
  5

  
	 
	
  TASK: 5.

  	
  [**] IN PLACE

  	
  6

  
	 
	
  TASK: 6.

  	
  [**]

  	
  7

  
	 
	
  TASK: 7.

  	
  [**]

  	
  8

  
	 
	
  TASK: 8.

  	
  [**]

  	
  8

  
	 
	
  TASK: 9.

  	
  [**]

  	
  9

  
	 
	
  TASK: 10.

  	
  [**]

  	
  10

  
								

 

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Situation Analysis

[One paragraph overview of [**] & current status]

 

[**]:

[Input all relevant
[**] details associated with the situation analysis]

·

 

Technical
Context

[Input all relevant
technical details associated with the situation analysis]

·

 

Primary  Contacts

[Input all major contact names and titles [**]]

 

Name – title

Name – title

Name – title

Name – title

 

Current barriers [**]

[Input all [**] or
technical [**] barriers]

·

 

Current roles of [**] and Digimarc with
relation to [**]:

[**]

[**] Tasks

[**] agrees to complete tasks upon which any
part of the Services is dependent. The dependencies include all tasks
identified in this plan as a [**] Task and approval and acceptance by [**].

 

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Work to Be Performed in [input year]

[Input the major
task names & durations]

 

	
   

  	
   

  	
  Jan

  	
   

  	
  Feb

  	
   

  	
  Mar

  	
   

  	
  Apr

  	
   

  	
  May

  	
   

  	
  Jun

  	
   

  	
  Jul

  	
   

  	
  Aug

  	
   

  	
  Sep

  	
   

  	
  Oct

  	
   

  	
  Nov

  	
   

  	
  Dec

  	
   

  
	
  Task Number & Name

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Task Number & Name

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Task Number & Name

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Task Number & Name

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Task Number & Name

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

Tasks will not necessary follow the order
provided below.

 

	
  Task: 1

  	
  [**]

  
	
   

  	
   

  	
   

  
	
  1.1

  	
   

  	
  Completion

  
	
  ·

  	
   

  	
  [**]

  
	
   

  	
   

  	
   

  
	
  1.2

  	
   

  	
  Work

  
	
  ·

  	
   

  	
  [List tasks to be completed to achieve the objective]

  
	
   

  	
   

  	
   

  
	
  1.3

  	
   

  	
  Assumptions

  
	
  ·

  	
   

  	
  [List any assumptions made that could affect the work needed to
  complete the task]

  
	
   

  	
   

  	
   

  
	
  1.4

  	
   

  	
  [**] Tasks

  
	
  ·

  	
   

  	
  [List deliverables needed from [**] to complete the task]

  
	
   

  	
   

  	
   

  
	
  1.5

  	
   

  	
  Dependencies

  
	
  ·

  	
   

  	
  [List dependencies that could affect work needed to achieve the
  objective or Digimarc’s ability to achieve the objective]

  
	
   

  	
   

  	
   

  
	
  1.6

  	
   

  	
  Available Budget

  
	
   

  	
   

  	
  [List information about the approved budget for this task or a
  reference to the approved budget for this task]

  
				

 

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

 

 

	
  Task: 2

  	
  [**] Completion

  
	
   

  	
   

  
	
  2.1

  	
   

  	
  Completion

  
	
  ·

  	
   

  	
  [**]

  
	
  ·

  	
   

  	
  [**]

  
	
   

  	
   

  	
   

  
	
  2.2

  	
   

  	
  Work

  
	
  ·

  	
   

  	
  [List tasks to be completed to achieve the objective]

  
	
   

  	
   

  	
   

  
	
  2.3

  	
   

  	
  Assumptions

  
	
  ·

  	
   

  	
  [List any assumptions made that could affect the work needed to
  complete the task]

  
	
   

  	
   

  	
   

  
	
  2.4

  	
   

  	
  [**] Tasks

  
	
  ·

  	
   

  	
  [List deliverables needed from [**] to complete the task]

  
	
   

  	
   

  	
   

  
	
  2.5

  	
   

  	
  Dependencies

  
	
  ·

  	
   

  	
  [List dependencies that could affect work needed to achieve the
  objective or Digimarc’s ability to achieve the objective]

  
	
   

  	
   

  	
   

  
	
  2.6

  	
   

  	
  Available Budget

  
	
   

  	
   

  	
  [List information about the approved budget for this task or a
  reference to the approved budget for this task]

  
	
   

  	
   

  	
   

  
	
  Task:
  3

  	
   

  	
  [**]
  Completion

  
	
   

  	
   

  	
   

  
	
  3.1

  	
   

  	
  Completion

  
	
  ·

  	
   

  	
  [**]

  
	
  ·

  	
   

  	
  [**]

  
	
  ·

  	
   

  	
  [**]

  
	
  ·

  	
   

  	
  Digimarc
  conveys these results to the appropriate [**] representatives

  
	
   

  	
   

  	
   

  
	
  3.2

  	
   

  	
  Work

  
	
  ·

  	
   

  	
  [List tasks to be completed to achieve the objective]

  
	
   

  	
   

  	
   

  
	
  3.3

  	
   

  	
  Assumptions

  
	
  ·

  	
   

  	
  [List any assumptions made that could affect the work needed to
  complete the task]

  
	
   

  	
   

  	
   

  
	
  3.4

  	
   

  	
  [**] Tasks

  
	
  ·

  	
   

  	
  [List deliverables needed from [**] to complete the task]

  
	
   

  	
   

  	
   

  
	
  3.5

  	
   

  	
  Dependencies

  
	
  ·

  	
   

  	
  [List dependencies that could affect work needed to achieve the
  objective or Digimarc’s ability to achieve the objective]

  
	
   

  	
   

  	
   

  
	
  3.6

  	
   

  	
  Available Budget

  
	
   

  	
   

  	
  [List information about the approved budget for this task or a
  reference to the approved budget for this task]

  
								

 

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

 

 

	
  Task:
  4

  	
   

  	
  [**]
  commitment to [**]

  
	
   

  	
   

  	
   

  
	
  [**]

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  4.1

  	
   

  	
  Completion

  
	
  ·

  	
   

  	
  [**]

  
	
   

  	
   

  	
   

  
	
  4.2

  	
   

  	
  Work

  
	
  ·

  	
   

  	
  [List tasks to be completed to achieve the objective]

  
	
   

  	
   

  	
   

  
	
  4.3

  	
   

  	
  Assumptions

  
	
  ·

  	
   

  	
  [List any assumptions made that could affect the work needed to
  complete the task]

  
	
   

  	
   

  	
   

  
	
  4.4

  	
   

  	
  [**] Tasks

  
	
  ·

  	
   

  	
  [List deliverables needed from [**] to complete the task]

  
	
   

  	
   

  	
   

  
	
  4.5

  	
   

  	
  Dependencies

  
	
  ·

  	
   

  	
  [List dependencies that could affect work needed to achieve the
  objective or Digimarc’s ability to achieve the objective]

  
	
   

  	
   

  	
   

  
	
  4.6

  	
   

  	
  Available Budget

  
	
   

  	
   

  	
  [List information about the approved budget for this task or a
  reference to the approved budget for this task]

  
	
   

  	
   

  	
   

  
	
  Task:
  5

  	
   

  	
  [**]
  in Place

  
	
   

  	
   

  	
   

  
	
  5.1

  	
   

  	
  Completion

  
	
  ·

  	
   

  	
  [**]

  
	
   

  	
   

  	
   

  
	
  5.2

  	
   

  	
  Work

  
	
  ·

  	
   

  	
  [List tasks to be completed to achieve the objective]

  
	
   

  	
   

  	
   

  
	
  5.3

  	
   

  	
  Assumptions

  
	
  ·

  	
   

  	
  [List any assumptions made that could affect the work needed to
  complete the task]

  
	
   

  	
   

  	
   

  
	
  5.4

  	
   

  	
  [**] Tasks

  
	
  ·

  	
   

  	
  [List deliverables needed from [**] to complete the task]

  
	
   

  	
   

  	
   

  
	
  5.5

  	
   

  	
  Dependencies

  
	
  ·

  	
   

  	
  [List dependencies that could affect work needed to achieve the
  objective or Digimarc’s ability to achieve the objective]

  
	
   

  	
   

  	
   

  
	
  5.6

  	
   

  	
  Available Budget

  
	
   

  	
   

  	
  [List information about the approved budget for this task or a
  reference to the approved budget for this task]

  
						

 

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

 

 

	
  Task:
  6

  	
   

  	
  [**]

  
	
   

  	
   

  	
   

  
	
  6.1

  	
   

  	
  Completion

  
	
  ·

  	
   

  	
  [**]

  
	
   

  	
   

  	
   

  
	
  6.2

  	
   

  	
  Work

  
	
  ·

  	
   

  	
  [List tasks to be completed to achieve the objective]

  
	
   

  	
   

  	
   

  
	
  6.3

  	
   

  	
  Assumptions

  
	
  ·

  	
   

  	
  [List any assumptions made that could affect the work needed to
  complete the task]

  
	
   

  	
   

  	
   

  
	
  6.4

  	
   

  	
  [**] Tasks

  
	
  ·

  	
   

  	
  [List deliverables needed from [**] to complete the task]

  
	
   

  	
   

  	
   

  
	
  6.5

  	
   

  	
  Dependencies

  
	
  ·

  	
   

  	
  [List dependencies that could affect work needed to achieve the
  objective or Digimarc’s ability to achieve the objective]

  
	
   

  	
   

  	
   

  
	
  6.6

  	
   

  	
  Available Budget

  
	
   

  	
   

  	
  [List information about the approved budget for this task or a
  reference to the approved budget for this task]

  
	
   

  	
   

  	
   

  
	
  Task:
  7

  	
   

  	
  [**]

  
	
   

  	
   

  	
   

  
	
  7.1

  	
   

  	
  Completion

  
	
   

  	
   

  	
   

  
	
  ·

  	
   

  	
  [**]

  
	
   

  	
   

  	
   

  
	
  7.2

  	
   

  	
  Work

  
	
  ·

  	
   

  	
  [List tasks to be completed to achieve the objective]

  
	
   

  	
   

  	
   

  
	
  7.3

  	
   

  	
  Assumptions

  
	
  ·

  	
   

  	
  [List any assumptions made that could affect the work needed to
  complete the task]

  
	
   

  	
   

  	
   

  
	
  7.4

  	
   

  	
  [**] Tasks

  
	
  ·

  	
   

  	
  [List deliverables needed from [**] to complete the task]

  
	
   

  	
   

  	
   

  
	
  7.5

  	
   

  	
  Dependencies

  
	
  ·

  	
   

  	
  [List dependencies that could affect work needed to achieve the
  objective or Digimarc’s ability to achieve the objective]

  
	
   

  	
   

  	
   

  
	
  7.6

  	
   

  	
  Available Budget

  
	
   

  	
   

  	
  [List information about the approved budget for this task or a
  reference to the approved budget for this task]

  
						

 

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

 

 

	
  Task:
  8

  	
   

  	
  [**]

  
	
   

  	
   

  	
   

  
	
  8.1

  	
   

  	
  Completion

  
	
   

  	
   

  	
   

  
	
  ·

  	
   

  	
  [**]

  
	
   

  	
   

  	
   

  
	
  8.2

  	
   

  	
  Work

  
	
  ·

  	
   

  	
  [List tasks to be completed to achieve the objective]

  
	
   

  	
   

  	
   

  
	
  8.3

  	
   

  	
  Assumptions

  
	
  ·

  	
   

  	
  [List any assumptions made that could affect the work needed to
  complete the task]

  
	
   

  	
   

  	
   

  
	
  8.4

  	
   

  	
  [**] Tasks

  
	
  ·

  	
   

  	
  [List deliverables needed from [**] to complete the task]

  
	
   

  	
   

  	
   

  
	
  8.5

  	
   

  	
  Dependencies

  
	
  ·

  	
   

  	
  [List dependencies that could affect work needed to achieve the
  objective or Digimarc’s ability to achieve the objective]

  
	
   

  	
   

  	
   

  
	
  8.6

  	
   

  	
  Available Budget

  
	
   

  	
   

  	
  [List information about the approved budget for this task or a
  reference to the approved budget for this task]

  
	
   

  	
   

  	
   

  
	
  Task:
  9

  	
   

  	
  [**]

  
	
   

  	
   

  	
   

  
	
  9.1

  	
   

  	
  Completion

  
	
   

  	
   

  	
   

  
	
  ·

  	
   

  	
  [**]

  
	
   

  	
   

  	
   

  
	
  9.2

  	
   

  	
  Work

  
	
  ·

  	
   

  	
  [List tasks to be completed to achieve the objective]

  
	
   

  	
   

  	
   

  
	
  9.3

  	
   

  	
  Assumptions

  
	
  ·

  	
   

  	
  [List any assumptions made that could affect the work needed to
  complete the task]

  
	
   

  	
   

  	
   

  
	
  9.4

  	
   

  	
  [**] Tasks

  
	
  ·

  	
   

  	
  [List deliverables needed from [**] to complete the task]

  
	
   

  	
   

  	
   

  
	
  9.5

  	
   

  	
  Dependencies

  
	
  ·

  	
   

  	
  [List dependencies that could affect work needed to achieve the
  objective or Digimarc’s ability to achieve the objective]

  
	
   

  	
   

  	
   

  
	
  9.6

  	
   

  	
  Available Budget

  
	
   

  	
   

  	
  [List information about the approved budget for this task or a
  reference to the approved budget for this task]

  
	
   

  	
   

  	
   

  
	
  Task:
  10

  	
   

  	
  [**]

  
	
   

  	
   

  	
   

  
	
  10.1

  	
   

  	
  Completion

  
	
   

  	
   

  	
   

  
	
  ·

  	
   

  	
  [**]

  
							

 

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

 

 

	
  10.2

  	
   

  	
  Work

  
	
  ·

  	
   

  	
  [List tasks to be completed to achieve the objective]

  
	
   

  	
   

  	
   

  
	
  10.3

  	
   

  	
  Assumptions

  
	
  ·

  	
   

  	
  [List any assumptions made that could affect the work needed to
  complete the task]

  
	
   

  	
   

  	
   

  
	
  10.4

  	
   

  	
  [**] Tasks

  
	
  ·

  	
   

  	
  [List deliverables needed from [**] to complete the task]

  
	
   

  	
   

  	
   

  
	
  10.5

  	
   

  	
  Dependencies

  
	
  ·

  	
   

  	
  [List dependencies that could affect work needed to achieve the
  objective or Digimarc’s ability to achieve the objective]

  
	
   

  	
   

  	
   

  
	
  10.6

  	
   

  	
  Available Budget

  
	
   

  	
   

  	
  [List information about the approved budget for this task or a
  reference to the approved budget for this task]

  

 

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

 

 

SCHEDULE “Z”

 

[**] TEAM

 

Engineer [**] Development: A total of [**] FTE of [**] Engineering time is
allocated.  In addition to meeting
Digimarc’s requirements as a professional [**] developer, the [**] engineers
assigned to the [**] Team must, as a collective group, have skill and
experience in the following:

·      [**]

 

QA Engineer:       A total of [**] FTE of Quality
Assurance Engineering time is allocated. In addition to meeting Digimarc’s
requirements as a professional [**] development QA Engineer, the QA Engineers
assigned to the [**] Team must, as a collective group, have skill and
experience in the following:

·      [**]

 

Account Manager:       A total of [**] FTE of Account
Management time is allocated. In addition to meeting Digimarc’s requirements
for an Account Manager, the account managers assigned to the [**] team must
have skills in the following:

·      [**]

 

Attorney:       A
total of [**] FTE of Attorney (Lawyer) time is allocated. Legal staff assigned
to the [**] must have experience [**].

 

[**] Engineer:       A total of [**] FTE of [**]
Engineering time is allocated. In addition to meeting Digimarc’s requirements
as a [**] Engineer, the [**] Engineer assigned to the [**] Team must have
experience providing [**] research for the [**].

 

Technical Writer:       A
total of [**] FTE of Technical Writer time is allocated. In addition to meeting
Digimarc’s requirements as a professional Technical Writer, the Technical
writers assigned to the [**] Team must have experience in the development of
technical documentation targeted at [**].

 

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

 

 

SCHEDULE
“AA”

 

KEY
[**] PERSONNEL

 

Following are the names and
positions of Key [**] Personnel required as per clause 4.6 of this Agreement:

 

- Digimarc Project Director -
[**]

- Business Team - [**]

- [**] Development - [**]

- R&D Engineering - [**]

- QA Engineering – [**]

 

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

 

 

SCHEDULE “BB”

 

[**] PROBLEM REPORT

 

Each
[**] Problem Report will contain all information necessary to reproduce or
demonstrate the occurrence of the problem. 
[**] Problem Reports will be [**] and will be delivered electronically
in a format to be provided by Digimarc.

 

[**] Problem Reports will
contain:

 

	
   

  	
   

  	
  Name of [**]

  
	
   

  	
   

  	
  [**]

  
	
   

  	
   

  	
  Date problem was encountered

  
	
   

  	
   

  	
  Detailed description of the problem,
  including the frequency with which the problem occurs

  
	
   

  	
   

  	
  Severity of problem

  
	
   

  	
   

  	
  Impact on [**] schedules and other [**]
  activities

  
	
   

  	
   

  	
  Cost and budget impact

  
	
   

  	
   

  	
  Recommended solution and estimated cost of
  implementation

  
	
   

  	
   

  	
  Contact information for person to contact
  for further information (name, phone number, FAX number, email address)

  

 

If the problem
involves [**]:

 

	
   

  	
   

  	
  Name [**] that exhibits the problem

  
	
   

  	
   

  	
  Step by step instructions to reproduce the
  problem

  
	
   

  	
   

  	
  All [**] required to reproduce the problem

  
	
   

  	
   

  	
  [**]

  
	
   

  	
   

  	
  [**]

  
	
   

  	
   

  	
  [**] type and speed

  
	
   

  	
   

  	
  Amount of [**]

  
	
   

  	
   

  	
  [**]

  
	
   

  	
   

  	
  [**]

  
	
   

  	
   

  	
  [**]

  
	
   

  	
   

  	
  [**]

  
	
   

  	
   

  	
  [**]

  
	
   

  	
   

  	
  [**]

  
	
   

  	
   

  	
  [**]

  

 

[**] agrees to work with
Digimarc to provide reasonable additional information [**], as requested by
Digimarc, to assist Digimarc in resolution of the problem.

 

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

 

 

SCHEDULE
“CC”

 

[**]
PROJECT INDICATORS

 

The project
indicators established shall be used as a communications and planning tool that
will allow the [**] and Digimarc to assess the overall health of the project,
and to help identify potential problems. 
The agreed upon project indicators may change, new ones may be added or
some deleted.  Such changes shall be
agreed to by the parties.  Both parties
shall work co-operatively to interpret the results of the project indicators.
The project indicators shall not be used to assess penalties.

 

The parties
shall establish at each June’s planning meeting which project indicators will
be measured that year.  A report shall be
prepared by the end of March the following year and shall be discussed at
the strategic planning meeting held approximately two months prior to the June meeting.  The parties shall agree on what, if any,
corrective measures need to be taken.

 

	
   

  	
   

  	
  Among the project indicators which may be
  measured are the following:

  
	
   

  	
   

  	
   

  
	
  1.

  	
   

  	
  [**]
  Survey – [**] and Digmarc shall develop a joint survey to assess the level of
  [**] satisfaction with the [**] project and the [**] Services;

  
	
   

  	
   

  	
   

  
	
  2.

  	
   

  	
  [**]
  Survey – [**] and Digmarc shall develop a joint survey to assess the level of
  [**] satisfaction with the [**] project and the [**] provided by Digimarc;

  
	
   

  	
   

  	
   

  
	
  3.

  	
   

  	
  Budget
  performance – the parties shall track Allowable Costs and Expenses under the
  Agreement to the established budgets;

  
	
   

  	
   

  	
   

  
	
  4.

  	
   

  	
  Help
  Desk Calls – Digimarc shall monitor and report on the calls from [**] to
  Digimarc’s help desk; and

  
	
   

  	
   

  	
   

  
	
  5.

  	
   

  	
  Number
  of [**] and Number of [**] – Digimarc shall report on the number and [**]
  containing the [**] and the number of [**]

  

 

Each party
shall share equally any [**] costs associated with developing, implementing and
carrying out the project indicators. 
Services performed in developing and reporting on project indicators
that is performed as part of normal operational reporting shall be an Allowable
Cost.  The parties shall determine in
advance if work in addition to normal operational reporting shall be required
and whether the costs of such work will be an Allowable Cost.

 

** CONFIDENTIAL
PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.EXHIBIT 10.5

 

DMRC CORPORATION

 

INDEMNIFICATION
AGREEMENT

 

THIS AGREEMENT is entered into, effective as of                                     ,
        , by and between DMRC
Corporation, a Delaware corporation (the “Company”), and                                       
(“Indemnitee”).

 

WHEREAS, it is essential to the Company to retain and
attract as directors and officers the most capable persons available;

 

WHEREAS, Indemnitee is a director and/or officer of
the Company; and

 

WHEREAS, in recognition of Indemnitee’s need for
substantial protection against personal liability in order to enhance
Indemnitee’s continued and effective service to the Company, and in order to
induce Indemnitee to provide services to the Company as a director and/or
officer, the Company wishes to provide in this Agreement for the
indemnification of and the advancing of expenses to Indemnitee to the fullest
extent (whether partial or complete) permitted by Delaware law and as set forth
in this Agreement, and, to the extent insurance is maintained, for the coverage
of Indemnitee under the Company’s directors’ and officers’ liability insurance
policies.

 

NOW, THEREFORE, in consideration of the above premises
and of Indemnitee’s continuing to serve the Company directly or, at its request,
with another enterprise, and intending to be legally bound hereby, the parties
agree as follows:

 

1.              Certain
Definitions.

 

(a)   Board:  the Board of
Directors of the Company.

 

(b)   Change In Control: 
shall be deemed to have occurred if (i) any “person” (as such term
is used in Sections 13(d) and 14(d) of the Securities Exchange Act of
1934, as amended (the “Act”)), other than a trustee or other fiduciary holding
securities under an employee benefit plan of the Company or a corporation owned
directly or indirectly by the stockholders of the Company in substantially the
same proportions as their ownership of stock of the Company (collectively “Excluded
Persons”), is or becomes the “Beneficial Owner” (as defined in Rule 13d-3
under the Act), directly or indirectly, of securities of the Company
representing 30% or more of the total voting power represented by the Company’s
then outstanding Voting Securities, or (ii) during any period of two
consecutive years, individuals who at the beginning of such period constitute
the Board and any new director whose election by the Board or nomination for
election by the Company’s stockholders was approved by a vote of at least
two-thirds (2/3) of the directors then still in office who either were
directors at the beginning of the period or whose election or nomination for
election was previously so approved, cease for any reason to constitute a
majority of the Board, or (iii) the stockholders of the Company approve a
merger or consolidation of the Company with any other corporation, other than a
merger or consolidation that would result in the Voting Securities of the
Company outstanding immediately prior thereto continuing to represent (either
by

 

 

remaining outstanding or by being converted into Voting Securities of
the surviving entity) at least 50% of the total voting power represented by the
Voting Securities of the Company or such surviving entity outstanding
immediately after such merger or consolidation, or (iv) the stockholders
of the Company approve a plan of complete liquidation of the Company or an
agreement for the sale or disposition by the Company (in one transaction or a
series of transactions) of all or substantially all of the Company’s assets.

 

(c)   Expenses:  any
expense, liability, or loss, including attorneys’ fees, judgments, fines, ERISA
excise taxes and penalties, amounts paid or to be paid in settlement, any
interest, assessments, or other charges imposed thereon, and any federal,
state, local, or foreign taxes imposed as a result of the actual or deemed
receipt of any payments under this Agreement, paid or incurred in connection
with investigating, defending, being a witness in, or participating in
(including on appeal), or preparing for any of the foregoing in, any Proceeding
relating to any Indemnifiable Event.

 

(d)   Indemnifiable  Event:  any event or occurrence that takes place
either prior to or after the effective date of this Agreement, related to the
fact that Indemnitee is or was a director or an officer of the Company, or
while a director or officer is or was serving at the request of the Company as
a director, officer, employee, trustee, agent, or fiduciary of another foreign
or domestic corporation, partnership, joint venture, employee benefit plan,
trust, or other enterprise, or was a director, officer, employee, or agent of a
foreign or domestic corporation that was a predecessor corporation of the
Company or of another enterprise at the request of such predecessor
corporation, or related to anything done or not done by Indemnitee in any such
capacity.

 

(e)   Independent Counsel: 
the person or body appointed in connection with Section 3.

 

(f)    Potential Change In Control: 
shall be deemed to have occurred if (i) the Company enters into an
agreement or arrangement, the consummation of which would result in the
occurrence of a Change in Control, (ii) any person (including the Company)
publicly announces an intention to take or to consider taking actions that, if
consummated, would constitute a Change in Control, (iii) any person (other
than an Excluded Person) who is or becomes the Beneficial Owner, directly or
indirectly, of securities of the Company representing 10% or more of the
combined voting power of the Company’s then outstanding Voting Securities,
increases his beneficial ownership of such securities by 5% or more over the
percentage so owned by such person on the date hereof, or (iv) the Board
adopts a resolution to the effect that, for purposes of this Agreement, a
Potential Change in Control has occurred.

 

(g)   Proceeding:  (i) any
threatened, pending, or completed action, suit, or proceeding, whether civil,
criminal, administrative, investigative, or other, or (ii) any inquiry,
hearing, or investigation, whether conducted by the Company or any other party,
that Indemnitee in good faith believes might lead to the institution of any
such action, or proceeding.

 

(h)   Reviewing Party:  the
person or body appointed in accordance with Section 3.

 

2

 

(i)    Voting Securities: any securities of the Company that vote
generally in the election of directors.

 

2.              Agreement To
Indemnify.

 

(a)   General
Agreement.  In the event Indemnitee
was, is, or become a party to or witness or other participant in, or is
threatened to be made a party to or witness or other participant in, a
Proceeding by reason of (or arising in part out of) an Indemnifiable Event, the
Company shall indemnify Indemnitee from and against any and all Expenses to the
fullest extent permitted by law, as the same exists or may hereafter be amended
or interpreted (but in the case of any such amendment or interpretation, only
to the extent that such amendment or interpretation permits the Company to
provide broader indemnification rights than were permitted prior thereto).

 

(b)   Initiation
Of Proceeding.  Notwithstanding
anything in this Agreement to the contrary, Indemnitee shall not be entitled to
indemnification pursuant to this Agreement in connection with any Proceeding
initiated by Indemnitee against the Company or any director or officer of the Company
unless (i) the Company has joined in or the Board has consented to the
initiation of such Proceeding, (ii) the Proceeding is one to enforce
indemnification rights under Section 5, or (iii) the Proceeding is
instituted after a Change in Control and Independent Counsel has approved its
initiation.

 

(c)   Expense
Advances.  If so requested by
Indemnitee, the Company shall advance (within ten business days of such
request) any and all Expenses to Indemnitee (an “Expense
Advance”); provided that such request shall be accompanied by
reasonable evidence of the expenses incurred by Indemnitee and that, if and to
the extent that the Reviewing Party determines that Indemnitee would not be
permitted to be so indemnified under applicable law, the Company shall be entitled
to be reimbursed by Indemnitee (who hereby agrees to reimburse the Company) for
all such amounts theretofore paid.  If
Indemnitee has commenced legal proceedings in a court of competent jurisdiction
to secure a determination that Indemnitee should be indemnified under
applicable law, as provided in Section 4, any determination made by the
Reviewing Party that Indemnitee would not be permitted to be indemnified under
applicable law shall not be binding and Indemnitee shall not be required to
reimburse the Company for any Expense Advance until a final judicial
determination is made with respect thereto (as to which all rights of appeal
therefrom have been exhausted or have lapsed).

 

(d)   Mandatory
Indemnification.  Notwithstanding any
other provision of this Agreement (other than Section 2(f) below), to
the extent that Indemnitee has been successful on the merits in defense of any
Proceeding relating in whole or in part to an Indemnifiable Event or in defense
of any issue or matter therein, Indemnitee shall be indemnified against all
Expenses incurred in connection therewith.

 

(e)   Partial
Indemnification.  If Indemnitee is
entitled under any provision of this Agreement to indemnification by the
Company for some or a portion of Expenses, but not, however, for the total
amount thereof, the Company shall nevertheless indemnify Indemnitee for the
portion thereof to which Indemnitee is entitled.

 

3

 

(f)    Prohibited
Indemnification.  No indemnification
pursuant to this Agreement shall be paid by the Company on account of any
Proceeding in which judgment is rendered against Indemnitee for an accounting
of profits made from the purchase or sale by Indemnitee of securities of the
Company pursuant to the provisions of Section 16(b) of the Act or
similar provisions of any federal, state or local laws.

 

3.              Reviewing Party.

 

Prior
to any Change in Control, the Reviewing Party shall be any appropriate person
or body consisting of a member or members of the Board or any other person or
body appointed by the Board who is not a party to the particular Proceeding
with respect to which Indemnitee is seeking indemnification; after a Change in
Control, the Reviewing Party shall be the Independent Counsel referred to
below.  With respect to all matters
arising after a Change in Control (other than a Change in Control approved by a
majority of the directors on the Board who were directors immediately prior to
such Change in Control) concerning the rights of Indemnitee to indemnity payments
and Expense Advances under this Agreement or any other agreement or under
applicable law or the Company’s Certificate of Incorporation or bylaws now or
hereafter in effect relating to indemnification for Indemnifiable Events, the
Company shall seek legal advice only from Independent Counsel selected by
Indemnitee and approved by the Company and who has not otherwise performed
services for the Company or the Indemnitee (other than in connection with
indemnification matters) within the last five years.  The Independent Counsel shall not include any
person who, under the applicable standards of professional conduct then
prevailing would have a conflict of interest in representing either the Company
or Indemnitee in an action to determine Indemnitee’s rights under this
Agreement.  Such counsel, among other
things, shall render its written opinion to the Company and Indemnitee as to
whether and to what extent the Indemnitee should be permitted to be indemnified
under applicable law.  The Company agrees
to pay the reasonable fees of the Independent Counsel and to indemnify fully
such counsel against any and all expenses (including attorney’s fees), claims,
liabilities, loss, and damages arising out of or relating to this Agreement or
the engagement of Independent Counsel pursuant hereto.

 

4.              Indemnification
Process And Appeal.

 

(a)   Suit To
Enforce Rights.  Regardless of any
action by the Reviewing Party, if Indemnitee has not received full
indemnification within 60 days after making a request in accordance with Section 2(c),
Indemnitee shall have the right to enforce its indemnification rights under
this Agreement by commencing litigation, in any appropriate court having
subject matter jurisdiction thereof and in which venue is proper, seeking an
initial determination by the court or challenging any determination by the
Reviewing Party or any aspect thereof, provided, however, that such 60-day
period shall be extended for reasonable time, not to exceed another 60 days, if
the Reviewing Party in good faith requires additional time for the obtaining or
evaluating of documentation and information relating thereto.  The Company hereby consents to service of
process and to appear in any such proceeding. 
Any determination by the Reviewing Party not challenged by the Indemnitee
shall be binding on the Company and Indemnitee. 
The 

 

4

 

remedy provided for in this Section 4 shall be in addition to any
other remedies available to Indemnitee in law or equity.

 

(b)   Defense
To Indemnification, Burden Of Proof, And Presumptions.  It shall be a defense to any action brought
by Indemnitee against the Company to enforce this Agreement (other than an
action brought to enforce a claim for Expenses incurred in defending a
Proceeding in advance of its final disposition where the required undertaking
has been tendered to the Company) that it is not permissible under applicable
law for the Company to indemnify Indemnitee for the amount claimed.  In connection with any such action or any
determination by the Reviewing Party or otherwise as to whether Indemnitee is
entitled to be indemnified hereunder, the burden of proving such a defense or
determination shall be on the Company. 
Neither the failure of the Reviewing Party or the Company (including its
Board, independent legal counsel, or its stockholders) to have made a
determination prior to the commencement of such action by Indemnitee that
indemnification of the claimant is proper under the circumstances because
Indemnitee has met the standard of conduct set forth in applicable law, nor an
actual determination by the Reviewing Party or Company (including its Board,
independent legal counsel, or its stockholders) that the Indemnitee had not met
such applicable standard of conduct, shall be a defense to the action or create
a presumption that the Indemnitee has not met the applicable standard of
conduct.  For purposes of this Agreement,
the termination of any claim, action, suit, or proceeding, by judgment, order,
settlement (whether with or without court approval), conviction, or upon a plea
of nolo contendere, or its equivalent shall not create a presumption that
Indemnitee did not meet any particular standard of conduct or have any
particular belief or that a court has determined that indemnification is not
permitted by applicable law.

 

5.              Indemnification
For Expenses Incurred In Enforcing Rights.

 

The
Company shall indemnify Indemnitee against any and all Expenses and, if
requested by Indemnitee, shall (within ten business days of such request),
advance such Expenses to Indemnitee, that are incurred by Indemnitee in
connection with any claim asserted against or covered action brought by
Indemnitee for (i) indemnification of Expenses or Expense Advances by the
Company under this Agreement or any other agreement or under applicable law or
the Company’s Certificate of Incorporation or bylaws now or hereafter in effect
relating to indemnification for Indemnifiable Events, and or (ii) recovery
under directors’ and officers’ liability insurance policies maintained by the
Company, regardless of whether Indemnitee ultimately is determined to be
entitled to such indemnification, Expense Advances, or insurance recovery, as
the case may be.

 

6.              Notification And
Defense Of Proceeding.

 

(a)   Notice.  Promptly after receipt by Indemnitee of
notice of the commencement of any Proceeding, Indemnitee shall, if a claim in
respect thereof is to be made against the Company under this Agreement, notify
the Company of the commencement thereof, but the omission so to notify the
Company will not relieve the Company from any liability that it may have to
Indemnitee, except as provided in Section 6(c).

 

5

 

(b)   Defense.  With respect to any Proceeding as to which
Indemnitee notifies the Company of the commencement thereof, the Company shall
be entitled to participate in the Proceeding at its own expense and except as
otherwise provided below, to the extent the Company so wishes, it may assume
the defense thereof with counsel reasonably satisfactory to Indemnitee.  After notice from the Company to Indemnitee
of its election to assume the defense of any Proceeding, the Company shall not
be liable to Indemnitee under this Agreement or otherwise for any Expenses
subsequently incurred by Indemnitee in connection with the defense of such
Proceeding other than reasonable costs of investigation or as otherwise
provided below.  Indemnitee shall have
the right to employ his or her own legal counsel in such Proceeding, but all
Expenses related thereto incurred after notice from the Company of its
assumption of the defense shall be at Indemnitee’s expense unless:  (i) the employment of legal counsel by
Indemnitee has been authorized by the Company, (ii) Indemnitee has
reasonably determined that there may be a conflict of interest between
Indemnitee and the Company in the defense of the Proceeding, (iii) after a
Change in Control, the employment of counsel by Indemnitee has been approved by
the Independent Counsel, or (iv) the Company shall not in fact have
employed counsel to assume the defense of such Proceeding, in each of which
case all Expenses of the Proceeding shall be borne by the Company.  The Company shall not be entitled to assume
the defense of any Proceeding brought by or on behalf of the Company or as to
which Indemnitee shall have made the determination provided for in (ii) above.

 

(c)   Settlement
Of Claims.  The Company shall not be
liable to indemnify Indemnitee under this Agreement or otherwise for any
amounts paid in settlement of any Proceeding effected without the Company’s
written consent, provided, however, that if a Change in Control has occurred,
the Company shall be liable for indemnification of Indemnitee for amounts paid
in settlement if the Independent Counsel has approved the settlement.  The Company shall not settle any Proceeding
in any manner that would impose any penalty or limitation on Indemnitee without
Indemnitee’s written consent.  The
Company shall not be liable to indemnify the Indemnitee under this Agreement
with regard to any judicial award if the Company was not given a reasonable and
timely opportunity, at its expense, to participate in the defense of such
action; the Company’s liability hereunder shall not be excused if participation
in the Proceeding by the Company was barred by this Agreement.

 

7.              Non-Exclusivity.

 

The
rights of Indemnitee hereunder shall be in addition to any other rights
Indemnitee may have under the Company’s Certificate of Incorporation, bylaws,
applicable law, or otherwise.  To the
extent that a change in applicable law (whether by statute or judicial
decision) permits greater indemnification by agreement than would be afforded
currently under the Company’s Certificate of Incorporation, bylaws, applicable
law, or this Agreement, it is the intent of the parties that Indemnitee enjoy
by this Agreement the greater benefits so afforded by such change.

 

8.              Liability
Insurance.

 

To the
extent the Company maintains an insurance policy or policies providing
directors’ and officers’ liability insurance, Indemnitee shall be covered by
such policy or 

 

6

 

policies, in accordance with its or their terms, to
the maximum extent of the coverage available for any Company director or
officer.

 

9.              Amendment Of This
Agreement.

 

No
supplement, modification, or amendment of this Agreement shall be binding
unless executed in writing by both of the parties hereto.  No waiver of any of the provisions of this
Agreement shall operate as a waiver of any other provisions hereof (whether or
not similar), nor shall such waiver constitute a continuing waiver.  Except as specifically provided herein, no
failure to exercise or any delay in exercising any right or remedy hereunder
shall constitute a waiver thereof.

 

10.       Subrogation.

 

In the
event of payment under this Agreement, the Company shall be subrogated to the
extent of such payment to all of the rights of recovery of Indemnitee, who
shall execute all papers required and shall do everything that may be necessary
to secure such rights, including the execution of such documents necessary to
enable the Company effectively to bring suit to enforce such rights.

 

11.       No Duplication Of
Payments.

 

The
Company shall not be liable under this Agreement to make any payment in
connection with any claim made against Indemnitee to the extent Indemnitee has
otherwise received payment (under any insurance policy, bylaw, or otherwise) of
the amounts otherwise indemnifiable hereunder.

 

12.       Binding Effect.

 

This
Agreement shall be binding upon and inure to the benefit of and be enforceable
by the parties hereto and their respective successors (including any direct or
indirect successor by purchase, merger, consolidation, or otherwise to all or
substantially all of the business and/or assets of the Company), assigns,
spouses, heirs, and personal and legal representatives.  The indemnification provided under this
Agreement shall continue as to Indemnitee for any action taken or not taken
while serving in an indemnified capacity pertaining to an Indemnifiable Event
even though he or she may have ceased to serve in such capacity at the time of
any Proceeding.

 

13.       Severability.

 

If any
provision (or portion thereof) of this Agreement shall be held by a court of
competent jurisdiction to be invalid, void, or otherwise unenforceable, the
remaining provisions shall remain enforceable to the fullest extent permitted
by law.  Furthermore, to the fullest
extent possible, the provisions of this Agreement (including, without
limitation, each portion of this Agreement containing any provision held to be
invalid, void, or otherwise unenforceable, that is not itself invalid, void, or
unenforceable) shall be construed so as to give effect to the intent manifested
by the provision held invalid, void, or unenforceable.

 

7

 

14.       Governing Law.

 

This
Agreement shall be governed by and construed and enforced in accordance with
the laws of the State of Delaware applicable to contracts made and to be
performed in such State without giving effect to the principles of conflicts of
laws.

 

15.       Notices.

 

All
notices, demands, and other communications required or permitted hereunder
shall be made in writing and shall be deemed to have been duly given if
delivered by hand, against receipt, or mailed, postage prepaid, certified or
registered mail, return receipt requested, and addressed to the Company at:

 

Digimarc Corporation

9405 S.W. Gemini Drive

Beaverton, OR  97008

 

Notice
of change of address shall be effective only when given in accordance with this
Section.  All notices complying with this
Section shall be deemed to have been received on the date of delivery or
on the third business day after mailing.

 

16.       Counterparts.

 

This
Agreement may be executed in one or more counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same
instrument.

 

IN
WITNESS WHEREOF, the parties hereto have duly executed and delivered this
Indemnification Agreement as of the day specified above.

 

	
   

  	
  DMRC CORPORATION

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  INDEMNITEE

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  
	
   

  	
  Print Name:

  	
   

  
					

 

8

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