Document:

EXHIBIT 10.2

 

CONFIDENTIAL
PORTIONS OMITTED

 

LIMITED LIABILITY COMPANY
AGREEMENT

 

OF

 

NEWCO 1, LLC

 

DATED JUNE 11, 2009

 

 

TABLE OF CONTENTS

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  I

  	
  DEFINITIONS

  	
  1

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  II   

  	
  BUSINESS
  PURPOSE AND ACTIVITIES

  	
  6

  
	
  2.01.

  	
  Place
  of Business

  	
  6

  
	
  2.02.

  	
  Nature
  of Business

  	
  6

  
	
  2.03.

  	
  Excluded Scope

  	
  7

  
	
  2.04.

  	
  Marketing and
  Sales To Current Customers of Digimarc or Nielsen

  	
  7

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  III   

  	
  FORMATION
  AND TERM

  	
  7

  
	
  3.01.

  	
  Formation

  	
  7

  
	
  3.02.

  	
  Members’
  Interests

  	
  8

  
	
  3.03.

  	
  Name

  	
  8

  
	
  3.04.

  	
  Term

  	
  8

  
	
  3.05.

  	
  Registered
  Agent and Office

  	
  8

  
	
  3.06.

  	
  Title
  to Assets

  	
  8

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  IV  

  	
  MANAGEMENT
  OF THE COMPANY

  	
  8

  
	
  4.01.

  	
  Members’
  Committee

  	
  10

  
	
  4.02.

  	
  Management
  of the Company

  	
  11

  
	
  4.03.

  	
  Prior
  Approval

  	
  12

  
	
  4.04.

  	
  Additional Funding

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  V   

  	
  RIGHTS
  IN IP; ANCILLARY LICENSES AND SERVICES

  	
  12

  
	
  5.01.

  	
  Company
  Rights to Developed Intellectual Property

  	
  12

  
	
  5.02.

  	
  Digimarc
  License and Services

  	
  13

  
	
  5.03.

  	
  Nielsen Licenses
  and Services

  	
  14

  
	
  5.04.

  	
  Ability to Grant
  Licenses

  	
  15

  
	
  5.05.

  	
  Transitional
  Services; Real Estate Arrangements

  	
  15

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  VI   

  	
  FUNDING,
  ALLOCATIONS, DISTRIBUTIONS AND CAPITAL ACCOUNTS

  	
  15

  
	
  6.01.

  	
  Funding;
  Capital Contributions

  	
  15

  
	
  6.02.

  	
  Fiscal
  Year

  	
  16

  
	
  6.03.

  	
  Distributions
  to the Members

  	
  16

  
	
  6.04.

  	
  Certain
  Other Allocation Rights

  	
  17

  
	
  6.05

  	
  Additional Capital
  Contribution

  	
  18

  
	
  6.06

  	
  Member’s Failure To
  Make Capital Contributions

  	
  18

  
	
  6.07.
  

  	
  Accounting
  Procedures

  	
  18

  
	
  6.08
  

  	
  Principle
  Tax Matters

  	
  19

  
	
  6.09
  

  	
  Payment
  and Withholding of Certain Taxes

  	
  20

  
	
  6.10
  

  	
  Organizational
  Expenses

  	
  21

  
	
  6.11

  	
  Classification

  	
  21

  
				

 

i

 

	
  ARTICLE
  VII   

  	
  BUDGETS
  AND BUSINESS PLANS

  	
  21

  
	
  7.01.

  	
  Business
  Plans and Budgets

  	
  21

  
	
  7.02.

  	
  Approval
  by the Members’ Committee

  	
  21

  
	
  7.03.

  	
  Default
  Budget

  	
  21

  
	
  7.04.

  	
  Default
  Business Plan

  	
  22

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  VIII   

  	
  CERTAIN
  REPRESENTATIONS, WARRANTIES, AND COVENANTS

  	
  22

  
	
  8.01.

  	
  Authorization

  	
  22

  
	
  8.02.

  	
  Absence
  of Conflict

  	
  22

  
	
  8.03.

  	
  Certain
  Covenants

  	
  23

  
	
  8.04.

  	
  Restricted
  Transfer of the Company Interest

  	
  23

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  IX   

  	
  DISSOLUTION

  	
  23

  
	
  9.01.

  	
  Dissolution

  	
  23

  
	
  9.02.

  	
  Liquidation

  	
  24

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  X   

  	
  FORCE
  MAJEURE

  	
  24

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  XI   

  	
  LIABILITY
  AND INSURANCE

  	
  25

  
	
  11.01.

  	
  Liability

  	
  25

  
	
  11.02.

  	
  Insurance

  	
  25

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  XII   

  	
  GENERAL
  PROVISIONS

  	
  25

  
	
  12.01.

  	
  No
  Publicity or Advertisement Without Prior Consultation

  	
  25

  
	
  12.02.

  	
  Severability

  	
  25

  
	
  12.03.

  	
  Article and
  Section Headings, Schedules and Exhibits

  	
  25

  
	
  12.04.

  	
  Counterparts

  	
  26

  
	
  12.05.

  	
  Gender
  and Number

  	
  26

  
	
  12.06.

  	
  Expenses

  	
  26

  
	
  12.07.

  	
  Notices

  	
  26

  
	
  12.08.

  	
  No
  Third Party Beneficiaries

  	
  27

  
	
  12.09.

  	
  Governing
  Law; Arbitration

  	
  27

  
	
  12.10.

  	
  Modifications,
  Amendments or Waivers

  	
  27

  
	
  12.11.

  	
  Assignment,
  Successors and Assigns

  	
  27

  
	
  12.12.

  	
  Joint
  Preparation

  	
  28

  
	
  12.13.

  	
  Entire
  Agreement; Termination of Prior Agreement

  	
  28

  
	
  12.14.

  	
  Further
  Assurances

  	
  28

  
	
  12.15.

  	
  Security
  Disclosures and Public Announcements

  	
  28

  
	
  12.16.

  	
  Confidentiality

  	
  28

  
	
  12.17.

  	
  Bankruptcy

  	
  29

  
	
  12.18.

  	
  Survival

  	
  29

  
				

 

ii

 

This LIMITED LIABILITY COMPANY AGREEMENT of Newco 1,
LLC (the “Company”) is made and entered into as of June 11, 2009 by
and between The Nielsen Company (US) LLC, a New York limited liability company,
having offices at 770 Broadway, New York, New York 10003 (“Nielsen”), and
Digimarc Corporation, a Delaware corporation, with offices at 9405 SW Gemini
Drive, Beaverton, Oregon 97008 (“Digimarc”).

 

INTRODUCTION

 

Whereas, Nielsen and Digimarc have entered into an
agreement executed on November 27, 2007 with an effective date of October 1,
2007, (the “Prior Agreement”), said Prior Agreement including terms and
conditions under which Digimarc provided Digimarc Services for Nielsen, and
granted to Nielsen certain licenses under Digimarc patents;

 

Whereas, under the Prior Agreement, Nielsen had certain
rights to terminate the Prior Agreement at the end of the second year or
subsequently during the term thereof, upon the satisfaction of certain
conditions;

 

Whereas, for good and valuable consideration, Nielsen and
Digimarc have agreed to expand and extend their relationship and supersede the
Prior Agreement by entering into this Agreement and contemporaneously entering
into the Patent License Agreement and the Agreement of Newco 2, LLC of even
date herewith.

 

NOW, THEREFORE, for good and valuable consideration as
stated herein, the parties hereby agree as follows.

 

ARTICLE
I  

DEFINITIONS

 

The following terms have the following meanings when
used in this Agreement, unless the context expressly or by necessary
implication otherwise requires:

 

“Agreement” shall mean this Limited Liability
Company Agreement.

 

“Affiliate” of a specified Person shall mean a Person that directly or indirectly
through one or more intermediaries, controls or is controlled by, or is under
common control with, the Person specified. 
For purposes of this definition the term “control” (including the terms “controlling,”
“controlled by” and “under common control with”) means directly or indirectly
owning equity securities (or other ownership interests) representing more than
fifty percent (50%) of the voting power of all the outstanding equity
securities of such specified Person. 
That Person is an Affiliate with the Person specified only for so
long as such “control” of  or being “controlled
by” the Person specified exists.

 

“Approved Budget” shall mean an annual
budget, expressed in terms of net cash flow (including revenue, operating and
capital expenses) approved by the Members’ Committee in accordance with
Sections 7.01 and 7.02 hereof.

 

1

 

“Approved Business Plan” shall mean a two-year business plan approved
by the Members’ Committee in accordance with Sections 7.01 and 7.02 hereof.

 

“Assets” of a Person shall mean
all of that Person’s properties and assets (real, personal or mixed, tangible
or intangible), unless otherwise specified.

 

“Business” shall have the meaning described in Section 2.02 hereof.

 

“Capital Account” shall have the meaning described in Section 6.03 (a) hereof.

 

“Certificate” means the Certificate of
Formation of the Company and any and all amendments thereto and restatements
thereof, as filed with the Secretary of State of the State of Delaware pursuant
to the Delaware Act.

 

“Chairman of the Members Committee” shall
mean Bruce Davis, the then current Chief Executive Officer of Digimarc, or any
other designee of Digimarc, for so long as Digimarc maintains an interest of at
least 25% in the Company.

 

“Code”
shall mean the Internal Revenue
Code of 1986, as amended.

 

“Company” shall mean Newco 1, LLC, the Delaware limited liability company the
Members form by entering into this Agreement.

 

“Company Products”
means any business, product or service developed and marketed by the Company that combines
Digimarc Licensed IP and Nielsen Licensed IP as authorized by this Agreement or otherwise approved by the Members
Committee.

 

“[**]” means a product that: (a) [**];
(b) [**]; and (c) includes all software, hardware and other networked
components required to achieve (a) and (b).

 

“Default Budget” shall have the meaning described in Section 7.03
hereof.

 

“Delaware Act”
shall mean the Delaware Limited Liability Company Act, 6 Del. C. §18-101, et
seq., as amended from time to time.

 

“Digimarc” shall have the meaning set forth
in the opening paragraph of the Agreement.

 

“Digimarc Licensed IP” shall mean the
Digimarc Licensed Patents and the Digimarc technology as reasonably required
for the commercialization, development and marketing by Company of Company
Products within the scope of the Business.

 

“Digimarc Licensed Patents” shall mean all
patents (including extensions, reissues, re-examinations, substitutions,
renewals or equivalents of any of the foregoing, and moral and economic rights
of inventors in any of the foregoing), other than the Excluded Patents,
throughout the world, including industrial and utility models, industrial
designs, typeface design 

 

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

 

2

 

patents
and registrations, petty patents, patents of importation, patents of addition,
certificates of invention, and any other indicia of invention ownership issued
or granted by any governmental agency or other authority:

 

(a) issued
or issuing on patent applications (including all provisional applications,
priority, continuations, divisionals, continuations-in-part and counterparts
thereof); and

 

(b) under
which patents or the patent applications therefor Digimarc or any of its
Affiliates has as of the Effective Date, or thereafter obtains, the right to a
grant license to the Company within the scope granted herein, without such
grant or the exercise of rights thereunder resulting in the payment of
royalties or other consideration by Digimarc or any of its Affiliates to third
parties (except for payments among Digimarc and its Affiliates and payments to
third parties for inventions made by said third parties while employed by
Digimarc or any of its Affiliates).

 

Digimarc
Licensed Patents shall include (other than the Excluded Patents) all patent
applications throughout the world (including all provisional applications,
priority, continuations, divisionals, continuations-in-part and counterparts
thereof) that satisfy part (b) of this definition, and all patents issuing
therefrom (including extensions, reissues, re-examinations, substitutions,
renewals or equivalents of any of the foregoing), and moral and economic rights
of inventors in any of the foregoing.

 

“Digimarc
Products and Services” means those products and services described in the Form 10-K
filed by Digimarc with the U.S. Securities and Exchange Commission (“SEC”) most
recently prior to the Effective Date.

 

“Effective Date” of this Agreement is July 1,
2009.

 

“Excluded Patents”
shall mean those Digimarc patents listed in Schedule 5.02 attached hereto.

 

“Excluded Scope” shall have the meaning set
forth in Section 2.03 hereof.

 

“Financial Statements” shall mean a balance sheet of the Company and related statements of
operations and cash flows, as of
the end of each month, quarter or year, as the case may be, and for the
corresponding period then ended.

 

“Force Majeure” shall mean any event or condition, not existing as of the Effective
Date, not reasonably foreseeable as of such date and not reasonably within the control of either Member, which
prevents, in whole or in material part, the performance by a Member of its
obligations under this Agreement, other than an obligation on the part of a
Member to make any payment hereunder. 
Without limiting the generality of the foregoing, the following shall
constitute events or conditions of Force Majeure: state or governmental action,
riots, war, acts of terrorism, sabotage, strikes, lock-outs, prolonged shortage
of energy or other supplies, fire, flood, hurricanes, earthquakes, lightning,
and explosion.

 

“GAAP”
shall mean U.S. generally accepted accounting principles.

 

3

 

“Indebtedness” shall mean (a) indebtedness for borrowed money, (b) obligations
(as lessee or guarantor) to pay rent under a lease of real or personal property which is required by GAAP to be
capitalized on a balance sheet of the Company prepared in accordance with the
provisions of this Agreement, (c) purchase money obligations, and (d) any
extension, refinancing or modification of any of the foregoing.

 

“Interest” means
the limited liability company interest of a Member in the Company at any
particular time, including the right of such Member to any and all benefits to
which a Member may be entitled as provided in this Agreement, together with the
obligations of such Member to comply with all the terms and provisions of this
Agreement.

 

“IRS” shall
have the meaning described in Section 6.09(a) hereof.

 

“Judicial Review” shall have the meaning described in Section 6.06(b)(i) hereof.

 

“Law” means any
statute, law, regulation, ordinance, rule, injunction, order, decree, directive
or any similar form of decision of, or determination by, any governmental or
self-regulatory authority.

 

“Management” shall mean the President and other officers of the Company appointed in
accordance with the provisions
of Section 4.02 hereof.

 

“[**]” means Nielsen Products and Services involving
[**].

 

“Members” means Digimarc and Nielsen and any
other Person added as a member of the Company from time to time.

 

“Members’ Committee” shall mean that Committee
which is created according to the provisions of Section 4.01 hereof.

 

“Nielsen Data
License” means Nielsen’s then standard form of
license agreement for any Nielsen Data Services provided to the Company during
the Term, provided that there shall be no payment by the Company to Nielsen in
connection therewith.  The current
version of such license is attached hereto in Schedule 5.03.

 

“Nielsen Data
Services” means Nielsen Syndicated
Research and back-office meta-data [**] pursuant to a Nielsen
Data License.

 

“Nielsen Licensed IP” means the Nielsen
Licensed Patents and the Nielsen technology as reasonably required for the
commercialization, development and marketing by Company of Company Products
within the scope of the Business.

 

“Nielsen
Licensed Patents” shall mean all patents (including extensions, reissues,
re-examinations, substitutions, renewals or equivalents of any of the
foregoing, and moral and economic rights of inventors in any of the foregoing)
throughout the world, including industrial and utility models, industrial
designs, typeface design patents and registrations, petty patents,

 

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

 

4

 

patents
of importation, patents of addition, certificates of invention, and any other
indicia of invention ownership issued or granted by any governmental agency or
other authority:

 

(a)   issued or issuing on patent applications
(including all provisional applications, priority, continuations, divisionals,
continuations-in-part and counterparts thereof); and

 

(b)   under which patents or the applications
therefor Nielsen or any of its Affiliates has as of the Effective Date, or
thereafter obtains, the right to grant a license to the Company within the
scope granted herein, without such grant or the exercise of rights thereunder
resulting in the payment of royalties or other consideration by Nielsen or its
Affiliates to third parties (except for payments among Nielsen and its
Affiliates, and payments to third parties for inventions made by said third
parties while employed by Nielsen or any of its Affiliates).

 

Nielsen Licensed Patents
shall include all patent applications throughout the world (including all
provisional applications, priority, continuations, divisionals, continuations-in-part
and counterparts thereof) that satisfy part (b) of this definition, and
all patents issuing therefrom (including extensions, reissues, re-examinations,
substitutions, renewals or equivalents of any of the foregoing), and moral and
economic rights of inventors in any of the foregoing.

 

“Nielsen Products and Services” means those
products and services [**].

 

“Nielsen
Syndicated Research” means Syndicated published data/reports including
access to and use of Nielsen’s market intelligence information and reports (and
data underlying reports), in any format then-currently available.

 

“Percentage Interest” shall mean a Member’s
Interest in the Company expressed as a percentage of all Interests.  The initial Percentage Interests shall be
forty-nine percent (49%) for Nielsen and fifty-one percent (51%) for Digimarc.

 

“Person” shall mean any natural person, firm,
corporation, limited liability company, partnership, association, trust or
similar organization or governmental body.

 

“President” shall mean the president of the Company appointed in accordance with the provisions of Section 4.02 hereof.

 

“Representative” shall mean an individual appointed by a Member to the Members’ Committee.

 

“Sale”, “Sell”, “Offer for Sale”,
“Other Transfer”, “Otherwise Transfer” and other forms of such
terms with respect to copyrightable materials, such as software products, mean
the granting of licenses to use copyrightable materials.

 

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

 

5

 

“Subsidiary” of a Person shall mean any corporation, partnership or other
entity (“Entity”) in which a party now or hereafter holds, directly or
indirectly, ownership of, or the right to vote on behalf of, more than fifty
percent (50%) of its voting stock or other voting equity interests, for so long
as such ownership or right to vote exists.

 

“Syndicated”
means a report or information that is created for more than one unique client.

 

“Tax Matters Member”
shall have the meaning described in Section 6.06(a) hereof.

 

“Treasury Regulations”
shall mean the income tax regulations, including temporary regulations,
promulgated under the Code, as such regulations may be amended from time to
time (including corresponding provisions of succeeding regulations).

 

ARTICLE
II  

BUSINESS PURPOSE AND ACTIVITIES

 

2.01.                Place of Business

 

The principal place of business of the Company shall
be Beaverton, Oregon.  At any time, the
Members’ Committee may change the location of the Company’s principal place of
business to another location by mutual agreement.

 

2.02.                Nature of Business

 

The
Company business shall be to develop and market Company Products outside the
Excluded Scope in the following areas and any others the parties may agree (the
“Business”):

 

(a) Copyright
Filtering Solutions.  Marketing of
[**] services, solutions, tools, equipment and software to companies seeking to
[**].  In connection with this service,
Nielsen will make available its [**], and provide commercially reasonable [**]
and updates refreshed on a regular basis mutually agreed by Company management
and Nielsen.  Presently
such [**] are manually generated on a daily basis.  If the Company
requires [**] of such [**], and such [**] requires more than incidental
development effort by Nielsen, Nielsen agrees that, at the Company’s option,
Nielsen will either:  provide such [**]
to the Company at Nielsen’s cost; or it will cooperate and support the Company
in [**] such [**] feeds at the Company’s expense and effort.

 

(b) Royalty/Audit
for Online Video or Audio to Rights Organizations, Guilds or Other
Organizations Interested in Reconciliation of Royalties, Residuals or Other
Similar Payments.  [**] services,
[**], for the purpose of [**] primarily available to rights organizations such
as [**].  This service would [**] and
report on [**] to organizations requiring this

 

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

 

6

 

information
to enforce royalty agreements.  In
connection with this service, Nielsen will make available its [**] tools on an “as
is” basis, at no charge to facilitate [**].

 

(c) Other
Company Products.  The Company may
develop or market other products or services that utilize Digimarc Licensed IP
and Nielsen Licensed IP outside the Excluded Scope, as from time to time agreed
by the Members Committee and incorporated in the Company’s annual plan and
budget.

 

(d)  No Obligation to Proceed.  Neither the Company nor Nielsen nor Digimarc
shall be obligated to develop any product referenced in Section 2.02.

 

2.03                                                   Excluded Scope

 

(a) 
The Company shall not use, make, have made, develop, market, offer for sale,
sell, lease, import, license or otherwise transfer:  (i) any Company Product that competes
with Digimarc Products and Services, Nielsen Products and Services, or the
products or services of Newco 2, LLC; or (ii) any Digimarc Licensed IP or
Nielsen License IP on a “stand-alone basis,” i.e., in the form of a “naked”
resale/license that is not materially embodied in a Company Product.

 

(b) 
Notwithstanding the forgoing, the Company shall not be prohibited from
providing [**] to a client in the context of a sales pitch for the Company’s
products or services or from reporting to a client about the [**] on behalf of
that client.

 

2.04.                Marketing and Sales to
Current Customers of Digimarc or Nielsen

 

For the purpose of coordinating mutual customer
relationships, the Company will [**], as the case may
be.  [**].

 

ARTICLE
III  

FORMATION AND TERM

 

3.01.                Formation

 

The Members hereby
form the Company as a limited liability
company  under and pursuant to the
provisions of the Delaware Act, and agree that the rights, duties and
liabilities of the Members shall be as provided in the Delaware Act, except as
otherwise provided in this Agreement. 
Upon the Effective Date of this Agreement, Nielsen and Digimarc shall be
admitted as Members.  The Members hereby
designate Robert P. Chamness to file the Certificate of Formation of the
Company.  The Members may jointly
describe any person as an authorized person, within the meaning of the Delaware
Act, to execute, deliver and file any amendments and/or restatements thereof
with the office of the Secretary of State of the State of Delaware pursuant to
the Delaware Act.

 

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

 

7

 

3.02.                Members’ Interests

 

As of the date of
this Agreement, Digimarc shall own fifty-one percent (51%) of the Company
Interests and Nielsen shall own forty-nine percent (49%) of the Company
Interests.

 

3.03.                Name

 

The name of the
Company is “Newco 1, LLC”, and may be changed by the consent of the Members.  The
business of the Company may be conducted under the name of the Company, or
under any other name designated by the Members’ Committee.  The Company shall be described as a joint
venture of Nielsen and Digimarc.

 

3.04.                Term

 

The Company shall
commence as of the date of the filing of the Certificate.  The term of the Company shall continue for a
period of twenty-five (25) years from the date hereof, unless terminated
earlier in accordance with the provisions of Sections 9.01 hereof.  The existence of the Company as a separate
legal entity shall continue until the cancellation of the Certificate as
provided in the Delaware Act.

 

3.05.                Registered Agent and Office

 

The Company’s
registered agent and office in the State of Delaware shall be The Corporation Trust
Company, 1209 Orange Street, Wilmington, New Castle County, Delaware
01980.  At any time, the Members’
Committee may mutually designate another registered agent or registered office.

 

3.06.                Title to Assets

 

Except as
otherwise provided in this Agreement, all Assets shall be owned by the Company
as an entity, and no Member shall have any ownership interest in such Assets in
the Member’s individual name or right. 
The Company shall hold all Assets in the name of the Company.

 

ARTICLE
IV  

MANAGEMENT OF THE COMPANY

 

4.01.                Members’ Committee

 

(a)   General.  A Members’ Committee shall supervise the
activities of the Company and will, among other things, (i) approve the
expenditure of funds for Company operations, on
a basis consistent with the requirements of the relevant Approved Budget of the
Company under Article VII hereof; (ii) approve the hiring and firing
of the President and other officers of the Company (subject to 4.02 a below); (iii) attempt
to resolve any and all disputes between the Members as to the Company’s
operations; (iv) attempt to resolve any and all disputes between the
Members concerning licensing or marketing rights issues which arise out of

 

8

 

 the Company’s operations; and (v) consider
and act upon all other material matters which impact upon or affect the
operation of the Company.  The
authorization and approval of the Members’ Committee shall be a condition
precedent to the taking of those actions set forth in Section 4.03
hereof.  The Members’ Committee shall
also consider and act upon those other matters which are contemplated by this
Agreement as being subject to its consideration or approval.  The Representatives of the Members’ Committee
shall act as representatives of the Members.

 

(b)   Members’ Committee.  Nielsen and Digimarc shall each appoint an
equal number of Representatives to the Members’ Committee.  Initially, each Member shall appoint two such
Representatives.  The names of each
Member’s designated Representatives on the Effective Date are set forth in
Schedule 4.01 to this Agreement. 
Subsequent appointments of Representatives to the Members’ Committee
will be made by written notice to the other Member and each such appointment
may be changed by reasonable advance written notice to the other
Member(s).  So long as Digimarc continues
to own at least 25% of the Company, the meetings of the Members’ Committee
shall be chaired by one of the Digimarc Representatives.  The Members’ Committee shall appoint one or
more secretaries to keep records of its meetings.  The Chief Financial Officers of Nielsen
Product and Digimarc may also attend the meetings of the Members’ Committee as
observers.

 

(c)   Meetings.  The Members’ Committee shall establish its
own schedule and location of regular meetings, which shall be held at least on
a calendar-quarterly basis.  Special
meetings of the Members’ Committee may be called by any two Representatives,
shall require no less than five (5) business days advance notice to the
other Member, unless waived, and shall be held at a mutually convenient
location; provided that in the absence of an agreement on such location,
the location will rotate between the head offices of each Member.  Any meeting of the Members’ Committee may be
conducted by telephone provided all Representatives wishing to participate are
able to listen and speak to one another while the meeting is being conducted.

 

(d)   One Vote Per Member/Dispute Resolution.  The Representatives of each Member shall each
have the right to one vote and all decisions shall be of the Members’ Committee
shall be by majority vote, except as set forth in Section 4.03 below.  The Chairman of the Members Committee shall
have the power to decide any non Section 4.03 matter for which a majority
vote has not been achieved.  With respect
to such Section 4.03 matters, in the event that at least three
Representatives of the Members’ Committee are unable to resolve an issue within
a reasonable time after it arises, either Member may refer the dispute to
non-binding mediation under the auspices of the American Arbitration
Association of Chicago, Illinois, and if still not resolved within ninety (90)
days after the commencement of such mediation, then either party may resort to
arbitration in accordance with, and subject to, the provisions of Section 12.09
hereof to resolve such dispute.

 

(e)   Decisions.  Valid decisions of the Members’ Committee may
be taken only at a meeting where both Representatives of each Member are
present, in person or by a duly executed proxy (whether in facsimile or other
written form) from the other Representatives of such Member and at least one
Representative of each Member is present in person or by phone.  Except in the case of previously scheduled
regular meetings, The Chairman of the Members Committee shall give the
Representatives at least five (5) business days’ written notice prior to
the meeting, unless waived.  Decisions
may also be made by the Members’ Committee, without a

 

9

 

meeting being held, by facsimile
or other written instrument which is executed by all Representatives of each
Member.

 

(f)   Invitees.  The President and other Company officers and
employees of the Members may attend meetings of the Members’ Committee at the invitation
of any Representative.  Such invitees
shall not be Members of the Members’ Committee, nor shall they be entitled to
vote on matters which come before the Members’ Committee.  The Chairman of the Members’ Committee can
excuse such Invitees from the meeting at any time and for any reason, and
Invitees shall not attend any portions of the meetings of the Members’
Committee designates as “Executive Sessions”.

 

4.02.                Management of the Company

 

(a)   President.  The Company shall have a President who shall
report to the Members’ Committee and shall have, within the guidelines of the
Approved Business Plan and Approved Budget, overall responsibility for
management of the Company, including specific responsibility for staffing,
sales and other similar organizational and product issues.  The President shall not hire or terminate any
officer of the Company without the advance written approval of such action by
the Members’ Committee.  Any decision to
terminate the employment of the President or change the duties or
responsibilities of the President shall require the approval of the Members’
Committee.  Digimarc shall designate the
President, subject to Nielsen’s approval, which shall not be unreasonably
withheld.  The designee shall not have
previously been an employee of either Member.

 

(b)   Other Officers.  The Members’ Committee shall elect and
replace officers for such positions as the Members’ Committee may determine
from time to time, and such officers shall perform such duties and have such
powers as the Members’ Committee may then determine. The officers will manage
the day-to-day operations of the Company in a manner consistent with the
policies, procedures, budgets, plans and programs ordered or approved by the
Members’ Committee consistent with the provisions of this Agreement and the
Delaware Act.  Nielsen shall designate
the CFO of the Company, subject to Digimarc’s approval, which shall not be
unreasonably withheld.  The designee
shall not have previously been an employee of either Member.

 

(c)   Other Employees.  The Company shall be entitled to hire and
provide such other employees compensation and benefits as are, in each case, in
accordance with the Approved Business Plan and the Approved Budget or the
unanimous action of the Members’ Committee.

 

(d)   Legal
Compliance.  The Company shall
formulate such policies and procedures as are required for the Company to
comply with all laws, regulations and requirements applicable to the Company or
the Members, including, without limitation, U.S. federal and state securities
laws and the rules and regulations of the SEC and stock exchanges.

 

In the absence of such
specific policies and procedures adopted by the Company, the Members Committee
shall determine which policies and procedures shall apply to the Company’s
governance and operations.

 

10

 

4.03.                                                                        Prior
Approval

 

No act shall be
taken, sum expended, decision made or obligation incurred by or on behalf of
the Company with respect to any matter described below unless such proposed
action shall have been approved by at least three Representatives of the
Members’ Committee:

 

(a)           subject to Section 4.02 above,
hiring or terminating the President or other elected officers and fixing their
compensation;

 

(b)           except for agreements in the ordinary
course of  business, entering into,
materially modifying, renewing, terminating or canceling any license or other
agreement with any Person, other than Digimarc or Nielsen or their respective
Affiliates, relating to the Company’s intellectual property rights or
proprietary data;

 

(c)           appointing independent auditors of
the Company;

 

(d)           commencing or settling any lawsuit or
claim involving the Company (other than a collection action or payment dispute)
involving amounts above $100,000 or non-monetary relief;

 

(e)           adopting or implementing any plan of
dissolution or liquidation, except as provided in Article IX;

 

(f)            merging or consolidating with or
into any Person, or acquiring all or part of another business (whether by
acquisition of stock or assets or otherwise) or entering into a cooperative
arrangement with another party which is the functional equivalent thereof;

 

(g)           selling, encumbering, leasing,
transferring or otherwise disposing of, in whole or in part, any substantial
amount of the Company’s Assets, except in the ordinary course of business of
the Company;

 

(h)           establishing or allowing to exist any
Subsidiary of the Company;

 

(i)            making any investment in, loan to or
guaranty of any obligations of any Person;

 

(j)            any issuance, transfer or other
disposition by the Company of any ownership interest therein or of any right to
acquire any ownership interest therein, except as set forth in Section 4.04;

 

(k)           incurring any indebtedness outside of
the ordinary course of business as provided in the Approved Budget and the
Approved Business Plan and changes thereto, except as set forth in Section 4.04;

 

(l)            admitting a new Member or creating a
new class of Members, except as expressly provided in Section 4.04 of this
Agreement;

 

11

 

(m)          effecting a bankruptcy, dissolution,
liquidation or reorganization of the Company, except as provided in Article IX;

 

(n)           approval of the Approved Budget and
the Approved Business Plan and changes thereto;

 

(o)           make a change in the nature of the
Business, as defined in section 2.02;  or
approval of Other Company Products as set forth in Section 2.02(d), other
than Company Products developed during the period when the Company continues to
be funded by the Members Initial Contributions; and

 

(p)            transactions with
any Member or any Affiliate of any Member.

 

4.04                                                                           Additional
Funding

 

In addition to the provisions set forth in Article VI, below, if
at any time the Annual Budget calls for expenditures that exceed the Company’s
cash on hand, either Member may call a meeting of the Members Committee to
propose and vote upon any of the following methods to fund or otherwise provide
for the Company’s continuing operations:

 

(a) Incurring indebtedness to a third
party or to one or both of the Members. 
The amount of such indebtedness shall be repaid prior to any
distributions pursuant to Section 6.03, unless the Members otherwise
agree;

 

(b) Admitting a new Member.   Any required adjustment to existing Members
Interest shall be shared equally between Nielsen and Digimarc.

 

ARTICLE
V  

RIGHTS TO PATENTS, DATA AND IMPROVEMENTS; ANCILLARY LICENSES

 

5.01                                                                           Company
Rights to Developed Intellectual Property

 

(a)   Company shall own (and shall use commercially
reasonable efforts to ensure that it shall own) all right, title and interest
to all materials and intellectual property first conceived or developed in the
performance of work by or for Company (including that under any services
contract between either Member and the Company) within the field of the Company
Business (and for avoidance of doubt, in all events outside of the Excluded
Scope), whether conceived or first reduced to practice solely by Company or
jointly with one or more of the Members or third parties (“Company IP”),
subject to the license granted to Nielsen and Digimarc under Section 5.01(b).

 

(b)  Company agrees to grant and hereby grants a worldwide,
non-exclusive, royalty free, nontransferable, irrevocable right and license
under all intellectual property owned 

 

12

 

or licensable by the
Company (including Company IP): (i) to Digimarc and its Affiliates to
make, have made, use, offer for sale, sell, import, lease, license and
otherwise transfer any product or service: 
(x) within the field of Digimarc Products and Services outside of
the Company Business:  and (y) upon
the dissolution of the Company under Article IX, within the field of the
Company Business; and (ii) to Nielsen and its Affiliates to make, have
made, use, offer for sale, sell, import, lease, license and otherwise transfer
any product or service: (x) within the field of Nielsen Products and
Services outside of the Company Business (including, for the
avoidance of doubt, [**] for [**]); and (y) upon the dissolution of the Company under Article IX,
within the field of the Company Business; provided, further, that
in the case of developments that are derivatives of underlying Digimarc
Licensed IP or Nielsen Licensed IP licensed to the Company by a party, such
license granted under this Section is subject to each party’s underlying
rights.

 

5.02                                                                           Digimarc
License and Services

 

(a)  IP License.   Subject to the terms and conditions of this
Agreement, Digimarc hereby grants to the Company, as of the Effective Date, a
worldwide, non-exclusive, royalty free, nontransferable, irrevocable license
under any and all Digimarc Licensed IP as reasonably required for use by or for
the Company in the manufacture (by or for), development, marketing, offer for
sale, sale, import, lease, license and other transfer to Company customers of
Company Products within the scope of the Business.

 

(b)  Previously Licensed Exclusive Grants.  Notwithstanding the above, the license
granted in Subsection (a) is subject to previously licensed exclusive
grants by Digimarc in the following fields of use, which are not licensed to
the Company:

 

(i)  domestic or
international: driver licenses, passports, national, federal, state or local
government identity cards and any other national, federal, state or local
government issued credentials;

 

(ii)  embedding
watermarks in [**] in the [**] for the purpose of [**].  For the avoidance of doubt, this does not
include embedding watermarks in [**]; and

 

(iii)  deterring
the unauthorized digital reproduction of banknotes.

 

(c)  No Implied Licenses.  Nothing
contained in this Agreement will be construed as conferring by implication,
estoppel or otherwise, any license or other right under any patent rights or
other industrial or intellectual property rights of Digimarc, except for the
license expressly granted herein.

 

(d)  Services.   As more fully set forth in that certain
Service Agreement entered into simultaneously herewith and attached hereto as
Schedule 5.02 (d), Digimarc shall provide incidental management support at no
cost to the Company and will provide technical and development services within
the scope of the Business to the Company over the following period in the
following minimum amounts:

 

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

 

13

 

	
  Remainder of
  2009:   

  	
  $

  	
  1.13 million

  	
   

  
	
  2010:  

  	
  2.80 million

  	
   

  
	
  2011:  

  	
  2.74 million

  	
   

  
	
   

  	
  $

  	
  6.67 million

  	
   

  
					

 

In the event
that Digimarc is retained to provide technical and developmental services to
Newco 2, LLC during the periods referenced above, the amounts paid by Newco 2,
LLC shall be credited against the minimums due under this Section 5.02
(d).

 

5.03.                                                                        Nielsen
Licenses and Services

 

(a)  Nielsen
Support and Data Services.  Nielsen
shall provide incidental management support at no cost to the Company and
pursuant to the terms and conditions substantially as set forth in the Nielsen
Data License in Schedule 5.03, to the extent the provisions of such form of
license are not in conflict with the terms of this Agreement, it will also
irrevocably provide:

 

(i) Free
access to and use of any Nielsen Data Services as reasonably required for the
development and marketing of Company Products within the scope of the
Business.  The Nielsen Data Services will
be available through the variety of means it is made available to Nielsen’s
clients, including desktop based (downloaded to a PC or sent via CD-ROM as
delivered to current Nielsen clients) or web based (Nielsen operates several
web based report platforms).  Free access
by the Company to Nielsen information assets (including Nielsen Data Services)
will be via all means accessible to any client. 
The free access to specific Nielsen Data Services will be as reasonably
required for the operation of any Company Product within the scope of the
Business, or for evaluation of any such Company Product, as determined by the
reasonable judgment of Company management; and

 

(ii) Free access to and use of Nielsen
Data Services in the formats that they exist in at the time of the delivery to
the extent such Nielsen Data Services are reasonably required for the
development and marketing of Company Products within the scope of the Business.

 

With respect to the foregoing, the Company will be a client of Nielsen,
but will receive Nielsen Data Services at no cost.  Non-syndicated custom formatted guides and
reports shall not be Nielsen Data Services, but may be provided to the Company
upon request, at a reasonable market price, or at such other price and on such
terms as the parties agree.

 

(b)  No Implied Licenses.  Nothing
contained in this Agreement will be construed as conferring by implication,
estoppel or otherwise, any license or other right under any patent rights or
other industrial or intellectual property rights of Nielsen, except for the
license expressly granted herein.

 

(c)  IP
License.  Subject to the terms and
conditions of this Agreement, Nielsen hereby grants to the Company, as of the
Effective Date, a worldwide, non-exclusive, royalty free, nontransferable,
irrevocable license under any and all Nielsen Licensed IP as reasonably
required 

 

14

 

for use by or
for the Company in the manufacture (by or for), development, marketing, offer
for sale, sale, import, lease, license and other transfer to Company customers
of Company Products within the scope of the Business.

 

5.04                                                                           Ability
to Grant Licenses

 

For purposes
of certainty, nothing in this Agreement shall limit either Member from granting
exclusive licenses outside identified areas of the Company Business and initial
business plan as set forth in Section 2.02.  All later business
opportunities for the Company are subject to discussion and mutual agreement,
including whether exclusivity is commercially reasonable or appropriate.

 

5.05                                                                           Transitional
Services; Real Estate

 

Any transitional,
ongoing, administrative or other services and real estate arrangements of the
Company shall be provided in accordance with the Approved Business Plan and
the Approved Budget.

 

ARTICLE
VI  

FUNDING, ALLOCATIONS, DISTRIBUTIONS AND CAPITAL ACCOUNTS

 

6.01.                                                                        Funding;
Capital Contributions

 

(a)   The Initial Capital
Contribution of each Member shall be an aggregate of $3,900,000 in quarterly
installments as follows:

 

	
  Date

  	
   

  	
  Amount

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  July 1, 2009

  	
   

  	
  $

  	
  350,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  October 1, 2009

  	
   

  	
  $

  	
  350,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  January 1, 2010

  	
   

  	
  $

  	
  400,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  April 1, 2010

  	
   

  	
  $

  	
  400,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  July 1, 2010

  	
   

  	
  $

  	
  400,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  October 1, 2010

  	
   

  	
  $

  	
  400,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  January 1, 2011

  	
   

  	
  $

  	
  400,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  April 1, 2011

  	
   

  	
  $

  	
  400,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  July 1, 2011

  	
   

  	
  $

  	
  400,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  October 1, 2011

  	
   

  	
  $

  	
  400,000

  	
   

  

 

15

 

6.02.                                                                        Fiscal
Year

 

The fiscal year of
the Company shall be the calendar year.

 

6.03.                                                                        Distributions
to the Members

 

The Company shall distribute to the Members any of the Company’s cash
which, in the judgment of the Members’ Committee, exceeds the minimum cash
requirements of the business for a reasonable period of time.  Such excess cash distributions shall be
allocated between the Members in accordance with their Percentage Interests.

 

(a)   Capital Accounts.  The Company shall maintain a capital account
for each Member in accordance with Treas. Regs. § 1.704-1(b)(2)(iv) and
administrative guidance issued with respect thereto (each such account as so
maintained, a “Capital Account”).  The
provisions of this Agreement relating to Capital Accounts are intended to
comply with such provisions and related provisions issued with respect to
section 704 of the Code and shall be interpreted consistently therewith.  The Company shall have the authority to make
such adjustments to the Members’ Capital Accounts as may be required to cause
the allocations made by the Company to comply with such provisions.

 

(b)   Adjustments to Capital
Accounts.  At least once each taxable
year of the Company for United States tax purposes (as determined under Code
section 706, a “Fiscal Year”), after adjusting each Member’s Capital Account
for all contributions and distributions with respect to such Fiscal Year, the
Company shall allocate all profits and losses and items thereof in the
following order of priority: (A) First, (1) allocations of
nonrecourse deductions shall be allocated among the Members pro rata in proportion to their Percentage
Interests under Treas. Regs. § 1.704-2, including, without limitation,
Treas. Regs. §§ 1.704-2(e) and 1.704-2(j)(1), (2) allocations of
partner nonrecourse deductions attributable to a particular partner nonrecourse
liability shall be allocated to the Member who has the economic risk of loss
for that liability to the extent required under Treas. Regs. §§ 1.704-2(i) and
1.704-2(j)(1), (3) allocations of income and gain shall be made to Members
whose share of partnership minimum gain is reduced to the extent required under
Treas. Regs. §§ 1.704-2(f) and 1.704-1(j)(2), (4) allocations of
income and gain shall be made to Members whose share of partner nonrecourse
debt minimum gain is reduced to the extent required under Treas. Regs.
§§ 1.704-2(i)(4) and 1.704-1(j)(2), and (5) a Member who
unexpectedly receives an adjustment, allocation, or distribution described in
Treas. Regs. § 1.704-1(b)(2)(ii)(d)(4), (5), or (6) shall
be allocated items of income and gain (consisting of a pro rata portion of each
item of partnership income, including gross income, and gain for such year) in
an amount and manner sufficient to eliminate such deficit balance as quickly as
possible; and (B) all remaining profits and losses and items thereof shall
be allocated to the Members’ Capital Accounts in a manner such that, after such
allocations have been made, the balance of each Member’s Capital Account (which
may be a positive, negative, or zero balance) shall equal (1) the amount
that would be distributed to such Member, determined as if the Company were to
sell all of its assets for the section 704(b) Book Value (as defined
below) thereof and distribute the proceeds thereof (net of any sales
commissions and other similar transaction fees and payments required to be made
to creditors) pursuant to the relevant legal documents setting forth such
distributions, minus (2) the
sum of (a) such Member’s share of the “partnership minimum gain” (as
determined under Treas. Regs. §§ 1.704-2(d) and (g)) and 

 

16

 

“partner nonrecourse debt minimum gain” (as determined under Treas. Regs.
§ 1.704-2(i)), and (b) the amount, if any, that such Member is obligated
(or is deemed for United States tax purposes to be obligated) to contribute, in
its capacity as a Member, to the capital of the Company as of the last day of
such Fiscal Year.  Notwithstanding the
preceding provisions of this paragraph, all allocations of gain or loss
recognized for Capital Accounting purposes in connection with property
contributed by a Member to the Company that, on liquidation of the Company
would be distributed to that Member, shall be specially allocated to that
Member.

 

(c)   Code Section 704(c)(1)(A).  Except as provided in the
following provisions of this Section 3, each item of taxable income, gain,
loss, deduction, or credit shall be allocated in the same manner as its
correlative item of “book” items allocated pursuant to Section 2.  In accordance with Code Section 704(c)(1)(A) (and
the principles thereof) and Treas. Regs. § 1.704-3, income, gain, loss and
deduction with respect to any property contributed to the capital of the
Company, or after Company property has been revalued under Treas. Regs. §
1.704-1(b)(2)(iv)(f), shall, solely for United
States federal, state and local tax purposes, be allocated among the Members so
as to take into account any variation between the adjusted basis of such
Company property to the Company for United States federal income tax purposes
and its value as so determined at the time of the contribution or revaluation
of Company property.  This Paragraph
shall be construed to authorize the Company to utilize only the “traditional
method”  described in Treas. Regs. §
1.704-3(b) unless all Members agree otherwise.  Any elections or other decisions relating to
such allocations shall be made by the Company. 
Allocations pursuant to this Paragraph are solely for United States tax
purposes and shall not affect, or in any way be taken into account in
computing, any Member’s Capital Account or share of profit, loss, or other
items, pursuant to any provision of this Agreement or otherwise affect the
Members’ rights (including, without limitation, rights to distributions) and
obligations with respect to the Company.

 

(d)   Certain Definitions. For purposes of this Agreement: (A) the
term “section 704(b) Book Value” means, with respect to any Company
property, the Company’s adjusted basis for United States tax purposes, adjusted
from time to time to reflect the adjustments required or permitted by Treas.
Regs. §§ 1.704-1(b)(2)(iv)(d) through (g), provided that on the date of the
contribution of an asset to the Company, the section 704(b) Book Value of
any asset contributed to the Company shall be equal to the fair market value
(as reasonably determined by the Parties) of such asset on the date of such
contribution, (B) the term “Treas. Regs.” means Treasury Regulations
issued under the Code, and (C) the term “profits and losses” shall mean
the items of profit and loss of the Company (including separately stated items)
as computed under Treas. Regs. § 1.704-1(b)(2)(iv).

 

6.04.                                                                        Certain
Other Allocation Rules

 

(a)   For purposes of
determining the Profits, Losses, or any other items allocable to any period,
Profits, Losses, and any such other items shall be determined on a daily,
monthly or other basis, as determined by Members’ Committee using any
permissible method under Section 706 of the Code and the Treasury
Regulations thereunder.

 

(b)   Except as otherwise
provided in this Agreement, all items of Company income, gain, loss, deduction,
and credit, for any fiscal year or other period, and any other 

 

17

 

allocations not
otherwise provided for shall be divided among the Members in the same
proportions as they share Profits or Losses, as the case may be, for such year
or other period.

 

(c)   All items of income,
gain, loss, deduction and credits recognized by the Company for federal income
tax purposes and allocated to the Members in accordance with the provisions
hereof and all basis allocations to the Members shall be determined without
regard to any election under section 754 of the Code that may be made by the
Company; provided, however, such allocations, once made, shall be
adjusted as necessary or appropriate to take into account the adjustments
permitted by sections 734 and 743 of the Code.

 

6.05                                                                           Additional
Capital Contributions

 

If and when the Company has used all of the Initial Capital
Contribution, the Members Committee may determine that the Company requires
additional capital to expand the Business. 
The Members Committee shall notify the Members of the required amount
and each Member may, but shall not be required to, make a capital contribution
in an amount equal to their Percent Interest portion of such required capital.

 

6.06                                                                           Member’s
Failure To Make Capital Contributions

 

In case either Member (the “Non-Contributing Member”) elects not to
make such a capital contribution, then the other Member (the “Other Member”)
may elect to exercise one or more of the provisions set forth below.

 

(a)           The Other Member may
withdraw its additional capital contribution in an amount comparable to that
which the Noncontributing Member failed to make.

 

(b)           The Other Member may
advance for its own Capital Account (in addition to its pro-rata share of the
additional capital contribution), the additional capital contribution requested
from the Noncontributing Member. 
Thereafter allocations of excess cash distributions, net profits, and
net losses, as well as distributions of the Assets and properties of the
Company upon termination of this Agreement shall be made to each Member
accordance with revised Percentage Interests determined in accordance with
aggregate capital contributions made to the Company ignoring any prior return
of Initial Capital Contributions or Additional Capital Contributions.

 

6.07                                                                           Accounting
Procedures

 

(a) Accounting Principles. 
The books of account of the Company shall be kept and maintained at the
principal place of business of the Company, or at such other place or places as
shall be determined by the Members’ Committee. 
The books of account and the Financial Statements of the Company shall
be prepared in accordance with GAAP, consistently applied, which shall be
utilized in the preparation of the books of account and Financial Statements of
the Company.

 

(b) Financial Statements. 
The Company shall cause Financial Statements to be prepared and
furnished to each of the Members, as soon as is practicable after the end of
each 

 

18

 

month, quarter and year, as the case may be, but in no event later than
twelve (12) working days after the end of each month or quarter or twenty-five
(25) working days after the end of a year. 
The Financial Statements shall be prepared in accordance with Section 6.05
(a) hereof, and shall be accompanied by:

 

(i)   a certificate signed by the president of the
Company and the principal financial employee of the company to the effect that
the unaudited consolidated financial statements reflect all adjustments
necessary to present fairly the financial position, results of operations and
cash flows, in the case of Financial Statements relating to any month, or to
any of the first three fiscal quarters of each year, or to any full fiscal year
for which audited Financial Statements are not requested by either Member pursuant
to clause (ii) below; and

 

(ii)    an independent auditor’s report prepared by
a firm of independent certified public accountants approved by the Members’
Committee, in the case of Financial Statements relating to a full fiscal year,
if so requested by either Member.  The
date that such certification shall be due will be prior to any SEC regulatory
filing dates for Digimarc and shall be completed simultaneously with the audit
of Digimarc to take advantage of any efficiencies and synergies in preparing
for and completing such audits.

 

The president
of the Company and the principal financial employee of the Company responsible
for providing accounting services to the Company shall also provide each Member
and the Members’ Committee with such other reports relating to the operations
of the Company as it may from time to time request. Any audit under
subparagraph (i) or (ii) hereof shall be at the Company’s expense.

 

6.08                                                                           Principle
Tax Matters

 

(a)The Members Committee shall designate  the “tax matters partner” of the Company for
United States
federal income tax purposes (the “Tax Matters Member”).  Pursuant to Section 6223(c) of the
Code, upon receipt of notice from the Internal Revenue Service (the “IRS”)
of the beginning of an administrative proceeding with respect to the Company,
the Tax Matters Member shall furnish the IRS with the name, address and profit
interest of each of the Members provided, however, that such
information is provided to the Tax Matters Member by the Members.

 

(b) The Tax Matters Member shall, with the prior approval of the
Members’ Committee, be permitted to:

 

(i) enter
into any settlement with the IRS with respect to any administrative or judicial
proceedings for the adjustment of the Company items required to be taken into
account by a Member for income tax purposes (such administrative proceedings
being referred to as a “Tax Audit” and such judicial proceedings being
referred to as “Judicial Review”);

 

(ii) in the event that a notice of a final administrative
adjustment at the Company level of any item required to be taken into account
by a Member for tax purposes (a “Final Adjustment”) is mailed to the Tax
Matters Member, seek Judicial Review of such Final Adjustment, including the
filing of a petition for readjustment with the Tax Court or the United States
Claims Court, or the filing of a complaint for refund with the District Court
of the United States for the district in which the Company’s principal place of
business is located;

 

19

 

(iii)   file a request for an administrative
adjustment with the IRS at any time and, if any part of such request is not
allowed by the IRS, to file an appropriate pleading (petition or complaint) for
Judicial Review with respect to such request;

 

(iv)   enter into an agreement with the IRS to
extend the period for assessing any tax which is attributable to any item
required to be taken into account by a Member for tax purposes, or an item
affected by such item; and

 

(v)    take any other action on behalf of the Members
in connection with any Tax Audit or Judicial Review proceeding.

 

The Tax Matters Member shall consult with the
other Member (that is not the Tax Matters Member) and receive the other Member’s
written approval before taking any action pursuant to this Section 6.06(b) and
show the other Member the relevant paperwork that such Member requests
associated with such action.  In the case of a disagreement
between the Tax Matters Member and the other Member, an accounting firm to be selected by the Members’ Committee will
resolve such disputes.

 

The Tax Matters Member shall receive no
compensation for its services. All third party costs and expenses incurred by
the Tax Matters Member in performing its duties as such (including legal and
accounting fees and any out-of-pocket expenses) shall be borne by the Company.
Nothing herein shall be construed to restrict the Company from engaging an
accounting firm or other experts or consultants to assist the Tax Matters
Member in discharging its duties hereunder, so long as the compensation paid by
the Company for such services is reasonable.

 

(c) Unless the Members shall determine that other methods of
allocations are required by the Code or applicable Treasury Regulations, each
item of income, gain, loss and credit of the Company shall be allocated between
the Members in accordance with their Percentage Interests for the fiscal year
(or portion thereof) to which the item relates.

 

6.09                                                                           Payment
and Withholding of Certain Taxes

 

(a)  The Company may withhold taxes from distributions to any
Member, or otherwise pay taxes on a Member’s allocable share of Company items
of income and gain, to the extent permitted by Section 6.12(b) below.  For purposes of this Agreement, any amount of
taxes so paid or withheld with respect to any Member shall be deemed to be a
distribution to such Member and shall reduce the applicable amount otherwise
distributable to such Member and, as necessary, the next distributions to be
made to that Member, pursuant to this Agreement.

 

(b)  Notwithstanding anything to the contrary herein, to the
extent that the Company is required, pursuant to any applicable law, (i) to
pay tax (including estimated tax) on a Member’s allocable share of Company
items of income or gain, whether or not distributed, or (ii) to withhold
and pay over to the tax authorities any portion of a distribution otherwise
distributable to a Member, the Company may withhold and pay over such tax or
such withheld amount to the tax authorities, and such amount shall be treated
as a distribution to such Member at the time it is paid to the tax authorities.

 

20

 

6.10                                                                           Organizational
Expenses

 

The Company shall
elect to deduct expenses, if any, incurred by it in organizing the Company
ratably over a 180-month  period as
provided in Section 709 of the Code and the regulations promulgated
thereunder.

 

6.11                                                                           Classification

 

The Company will
file information returns in a manner consistent with treatment of the Company
as a partnership for United States federal income tax purposes and will not
elect to be treated as a corporation for United States federal income tax
purposes.

 

ARTICLE
VII  

BUDGETS AND BUSINESS PLANS

 

7.01.                                                                        Business Plans
and Budgets

 

(a)   Prior to the 15th of November of
each year, commencing in November, 2009, the President, on behalf of the
Company, shall submit to the Members’ Committee for its review and comment a
preliminary two-year combined business plan commencing with the following year,
which is proposed for the Company. Within ten (10) business days thereof,
the Members’ Committee shall provide its response to the President and a final
business plan shall be submitted by December 1st and approved by the
Members’ Committee by January 1st of the following year.

 

(b)   On or before the 15th of November of
each year, commencing in November 2009, the Company shall submit to the
Members’ Committee for its review and comment a preliminary budget which is
proposed for the Company for the following two (2) years.  Within ten (10) business days thereof,
the Members’ Committee shall provide its response to the President and a final
budget for the following two (2) years shall be submitted by December 15th,
and approved by the Members’ Committee by January 1st of the following
year.

 

7.02.                                                                        Approval by the
Members’ Committee

 

If approved by the
Members’ Committee in accordance with the terms of Section 7.01 hereof,
the proposed two-year business plan shall become the Approved Business Plan for
the applicable three-year (or shorter) period, and the proposed budget for the
following two (2) years shall become the Approved Budget for the
applicable two (2) year (or shorter) period under Section 7.01(b) hereof.

 

7.03.                                                                        Default Budget

 

In the event that
the Members’ Committee fails to approve a budget for any two (2) year
period pursuant to Sections 7.01 and 7.02 hereof, then the Approved Budget for
the next ensuing year shall be the budget for the second year of the two (2) year
period as was contemplated within the then effective Approved Budget (for the
avoidance of doubt, 2010 being the second year of the initial Approved Budget)
and if the two (2) year period covered by the 

 

21

 

most
recent Approved Budget expires and no further budget is approved by the Members’
Committee, there shall be a Default Budget (as defined below) for the next
ensuing year.  The default budget (a “Default
Budget”) shall be equal to the annualized operating expenditures of
the Company for the most recent three months.

 

7.04.                                                                        Default
Business Plan

 

In the event a
two-year business plan which is submitted to the Members’ Committee shall not be
adopted pursuant to Sections 7.01 and 7.02 hereof, the Approved Business Plan
which is then in effect shall continue to be the Approved Business Plan of the
Company, except that the projected budget contained therein for any relevant
year shall be deemed to have been superseded by the Approved Budget or Default
Budget, as applicable, for such year.  If
the most recent Approved Business Plan expires and no further business plan is
approved by the Members’ Committee, then the Company shall continue operating
on a basis consistent with the last year of the most recent Approved Business
Plan.

 

ARTICLE
VIII  

CERTAIN REPRESENTATIONS, WARRANTIES, AND COVENANTS

 

8.01.                                                                        Authorization

 

Each Member
represents and warrants to the other Member that it has taken all action
necessary for the authorization, execution, delivery and performance by it of
this Agreement, and that when this Agreement is executed, it will constitute
its valid and binding obligation in accordance with its terms.  Each Member represents and warrants it has
all necessary corporate and other power with respect to the foregoing.

 

8.02.                                                                        Absence of
Conflict

 

Each Member
represents and warrants to the other Member that neither the execution,
delivery or performance of this Agreement, or any patent or other License
Agreements executed contemporaneously herewith, or any other Related Agreements
being executed and delivered simultaneously herewith to which it is a party,
nor the consummation of the transactions herein or therein contemplated, nor
the fulfillment of or compliance with the terms and conditions hereof or
thereof, will (nor with the giving of notice or lapse of time would) (a) conflict
with its Certificate of Incorporation, Bylaws or other instrument pursuant to
which it is organized, as amended or restated and as currently in effect or (b) result
in a breach of or constitute a default under or conflict with any material
contract, agreement or instrument to which it is a party or by which it or any
of its Assets are bound (including, without limitation, any agreements with any
banks or other lenders to which either Member or any of its Affiliates are a
party or subject), or (c) violate any law, rule or regulation
applicable to it or any of its Assets. 
Any third party, governmental or administrative consents or approvals
which are required in connection with the foregoing have been obtained and are
in full force and effect.

 

22

 

8.03.                                                                        Certain
Covenant

 

Each
Member covenants and agrees to use commercially reasonable efforts to cause the
Company to abide by the provisions of Section 2.03 and 4.03 hereof.

 

8.04.                                                                        Restricted
Transfer of the Company Interest

 

A Member may not,
without the prior written consent of the other Member, sell, assign, encumber
or otherwise transfer (directly or indirectly, through one or more
transactions, and whether voluntary, involuntary, by operation of law or
otherwise) its Interest in the Company or any part thereof to any Person.
Notwithstanding the previous sentence, either Member may transfer its Interest:
(i) by operation of law, pursuant to a merger, consolidation,
reorganization, statutory conversion, amalgamation or similar corporate
transaction; or (ii) in connection with a sale or other transfer of all or
substantially all of its assets or business; or (iii) upon receiving the
written consent of the other Member, which consent shall not be unreasonably
withheld, to an Affiliate which is wholly owned by, or which wholly owns, such
Member.  It shall be a condition precedent
to any transfer that the transferee agrees in writing to be bound by the terms
of this Agreement.  Any transfer that is
not made in strict compliance with the terms of this Section 8.04 shall be
null and void.

 

ARTICLE
IX  

DISSOLUTION

 

9.01.                                                                        Dissolution

 

(a)   Dissolution by Mutual Agreement.  The Members may dissolve the Company at any
time by execution of a written agreement signed by a duly authorized officer of
each Member stating that the Members wish to terminate this Agreement and
setting forth terms for the disposition or allocation of the assets,
liabilities and rights and obligations of the Company.

 

(b)   Dissolution By Either Member.  Either Member shall have the right to
initiate proceedings to dissolve the Company if:

 

(i)  the other party fails to make
the Initial Capital Contribution; or

 

(ii) 
the Company fails to have sufficient cash to meet its financial obligations as
they become due in the ordinary course; provided, that the Member initiating
such proceedings must be in compliance with its obligation to make its Initial
Capital Contribution and any other Capital Contribution agreed to by the
Members; or

 

(iii)  the Company is in material breach of the
provisions of 2.03 or 4.03 hereof, and has not cured the material breach in a
reasonable time after receipt of notice by the Member initiating such
proceedings; or

 

(iv)  by the end of 2013, the Company is no longer
solvent or is not generating at least [**] dollars of annualized revenues from
unrelated entities.

 

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

 

23

 

9.02.                                                                        Liquidation

 

(a)           Upon the dissolution of the Company,
the Members’ Committee shall seek to resolve all issues of ownership, separation
and distribution of Company assets, to make settlement and payment of all
Company obligations, and to wind up and liquidate the affairs of the Company in
an orderly and businesslike manner.  If
the Members’ Committee cannot reach such an agreement, they shall appoint a
Person to act as liquidator to wind up the Company.  The liquidator shall have full power and
authority to sell, assign, and encumber any or all of the Company’s assets and
to wind up and liquidate the affairs of the Company in an orderly and
businesslike manner.  All proceeds from
liquidation and any remaining funds or assets of the Company shall be
distributed in the following order of priority: 
(i) to the payment of debts and liabilities of the Company
(including, to the extent permitted by the Act, debts of the Company that are
owed to a Member) and the expenses of liquidation; (ii) to the setting up
of such reserves (including, cash escrow accounts) as the liquidator may
reasonably deem necessary for any contingent liabilities of the Company; and (iii) 
by distribution of cash or property (at the election of each Member), to the
Members in accordance with their Percentage Interests.

 

(b)           If a Member elects to take its
distribution in cash, and sufficient cash 
is not available to make the full cash distribution to each Member, the
liquidator shall sell at fair market value Company property as necessary to
make such distribution in cash.  The
other Members may purchase the property sold at its fair market value.

 

(c)           The distribution of cash or property
to the Members in accordance with the provisions of this Section 9.02
shall constitute a complete return to the Members of their respective Capital
Contributions and a complete distribution to the Members of their respective
Interests and all Company property.  In
the event that any Member’s Capital Account balance is a negative amount after
all allocations to such account in accordance with Article VI and
distributions in accordance with Section 9.02(a), such Member shall have
no obligation to contribute any amount to the Company as a result of such
negative Capital Account; provided, however, that this provision shall not
override any obligation of a Member to make a Capital Contribution under Section 6.01.

 

(d)           Any distributions to the Members
pursuant to this Section 9.02 shall be made in accordance with the time
requirements set forth in Treasury Regulation section 1.704-1(b)(2)(ii)(b)(2).

 

ARTICLE
X  

FORCE MAJEURE

 

A Member whose performance hereunder is prevented by
an event or condition of Force Majeure, upon providing written notice to the
other Member of such event or condition, shall be excused from performance to
the extent such event or condition prevents its performance, provided
that the Member so affected shall use reasonable efforts to avoid or remove the
cause of nonperformance and shall continue performance hereunder immediately
upon the removal of such causes.

 

24

 

ARTICLE
XI  

LIABILITY AND INSURANCE

 

11.01.                                                                  Liability

 

To the fullest
extent permitted by law, the debts, obligations and liabilities of the Company,
whether arising in contract, tort or otherwise, shall be solely the debts,
obligations and liabilities of the Company, and no Member shall be obligated
personally for any such debt, obligation or liability of the Company solely by
reason of being a Member.

 

11.02.                                                                  Insurance

 

The Company shall
purchase and maintain directors’ and officers’ errors and omissions insurance,
to the extent and in such amounts as the Members’ Committee shall, in its
discretion, deem reasonable.

 

ARTICLE
XII  

GENERAL PROVISIONS

 

12.01.                                                                  No Publicity or
Advertisement Without Prior Consultation

 

Except after
consultation with the other parties to this Agreement, none of the Members or
the Company shall, and each of the parties shall use its reasonable efforts to
assure that none of its officers, directors, employees, agents or advisors
shall, publicize, advertise, announce or describe to any governmental entity or
other third person the terms of this Agreement, the parties hereto or the
transactions contemplated hereby, except as it believes in good faith to be
required by applicable law, regulation, or stock market rules or as
permitted pursuant to this Agreement.

 

12.02.                                                                  Severability

 

Any portion or
provision of this Agreement which is invalid, illegal or unenforceable in any
jurisdiction shall, as to that jurisdiction, be ineffective to the extent of
such invalidity, illegality or unenforceability, without affecting in any way
the remaining portions or provisions hereof in such jurisdiction or, to the
extent permitted by law, rendering that or any other portion or provision
hereof invalid, illegal or unenforceable in any other jurisdiction.

 

12.03.                                                                  Article and
Section Headings, Schedules and Exhibits

 

The Article and
Section headings included in this Agreement are for the convenience of the
parties only and shall not affect the construction or interpretation of this
Agreement.  Schedules and Exhibits
referred to in this Agreement are an integral part of this Agreement.

 

25

 

12.04.                                                                  Counterparts

 

This Agreement and
any documents executed pursuant hereto may be executed in any number of
counterparts, each one of which shall be an original and all of which shall
constitute one and the same document.

 

12.05.                                                                  Gender and
Number

 

In this Agreement
(unless the context requires otherwise), the masculine, feminine and neuter
genders and the singular and the plural include one another.

 

12.06.                                                                  Expenses

 

Unless otherwise
provided in this Agreement, the parties shall each bear their own fees and
expenses incurred in connection with this Agreement and the transactions
contemplated hereby (including without limitation all fees and expenses of
counsel).

 

12.07.                                                                  Notices

 

All notices given
pursuant to this Agreement shall be in writing and be personally delivered or
mailed with postage prepaid, by registered or certified mail, return receipt
requested to the address set forth below or such other address as a party may
from time to time specify in writing to the other party.  If so mailed and also sent by telegram or
facsimile machine, the notice will conclusively be deemed to have been received
on the business day next occurring 48 hours after the latest to occur of such
mailing and telegraphic or facsimile communication; otherwise, no notice shall
be deemed given until it actually arrives at the address in question.  The addressees to which notices are initially
to be sent are as follows:

 

(a)   If to Digimarc:

 

Digimarc Corporation

9405 SW Gemini Drive

Beaverton, Oregon 97008 

Attention: Bruce Davis, CEO

with a copy to Robert Chamness, Chief Legal Officer and Secretary

Facsimile No.:  (503) 469-4771

 

(b)   If to Nielsen:

 

The Nielsen Company (US) LLC

770 Broadway

New York, NY 10003

Attention: Itzhak Fisher, Global Product Leadership

with a copy to the Chief Legal
Officer

Facsimile No.: (646) 654-8318

 

26

 

12.08.                                                                  No Third Party
Beneficiaries

 

No employee of the
Company (or his/her spouse or beneficiary), or any other Person not a party to
this Agreement, shall be entitled to assert any claim hereunder.  This Agreement shall be binding upon and
inure to the benefit only of the parties hereto and their respective
successors.  Notwithstanding any other
provisions to the contrary except with respect to such successors, it is not
intended and shall not be construed for the benefit of any third party or any
Person not a signatory hereto.  In no
event shall this Agreement constitute a third party beneficiary contract.

 

12.09.                                                                  Governing Law;
Arbitration

 

This Agreement is
governed by, and is to be construed and interpreted in accordance with, the law
of the State of Delaware, without giving effect to the conflict of law
principles thereof.  Any controversy or
claim arising out of or relating to this Agreement, or the breach thereof,
shall be settled by arbitration in Beaverton, Oregon, in accordance with the
Commercial Arbitration Rules of the American Arbitration Association.  Unless otherwise agreed in writing by the
parties, the arbitration panel shall have no authority to amend or contravene
this Agreement, to expand or otherwise modify the scope of the Business of the
Company or to make any award or finding contrary to the provisions of an
applicable Approved Budget or Approved Business Plan.  The prevailing party in the arbitration shall
be entitled to recoup its reasonable attorneys fees from the other party as
part of any judgment entered. Judgment on the award may be entered in any court
having jurisdiction thereof.

 

12.10.                                                                  Modifications,
Amendments or Waivers

 

Except as
otherwise provided herein, provisions of this Agreement may be modified,
amended or waived only by a written document specifically identifying this
Agreement and signed by a duly authorized executive officer of each Member.

 

12.11.                                                                  Assignment,
Successors and Assigns

 

Except as set forth in Section 8.04 hereof,
without the other Member’s prior written consent, this Agreement and the rights
and obligations hereunder shall not be assignable by any Member.  This Agreement and the rights and obligations
hereunder shall be binding upon, and inure to the benefit of, the respective
successors and permitted assigns of the parties hereto.  Notwithstanding anything to the contrary in
this Agreement, in the event that either party assigns this Agreement and the
rights and obligations hereunder to an unrelated third party, such that the
assigning party ceases to function or exist as a separate business entity, the
rights and license granted to the Company under either Member’s Licensed
Patents in this Agreement shall include only those patents and patent
applications that were part of the definition of that Member’s Licensed Patents
prior to the date of such assignment and having an effective filing date prior
to the date of such assignment (including reissues, reexaminations,
continuations, divisionals, continuations-in-part, extensions,  substitutions, renewals, foreign counterparts
and equivalents thereof) and patents issuing therefrom and patents claiming
priority to such patents or patent applications having an effective filing date
prior to the date of such assignment. 
For the avoidance of doubt, no patents of any entity that acquires either
Party after the Effective Date are within the definition of Digimarc Licensed
Patents or Nielsen Licensed Patents.

 

27

 

12.12.                                                                  Joint
Preparation

 

This Agreement has
been jointly prepared by the Members and the provisions of this Agreement shall
not be construed more strictly against any Member as a result of its
participation in such preparation.

 

12.13.                                                                  Entire
Agreement; Termination of Prior Agreement

 

This Agreement
(including the Schedules and Exhibits hereto) constitutes the entire agreement
of the Members with respect to the subject matter hereof and supersede all
prior written or oral and all contemporaneous oral agreements, understandings
and negotiations between the Members with respect to the subject matter hereof.

 

12.14.                                                                  Further Assurances

 

Each Member shall fully and faithfully carry out all its respective
agreements and covenants expressly set forth in this Agreement.  Each of the Members agrees to execute,
acknowledge and deliver such additional documents and take such further actions,
as may reasonably be required from time to time to carry out each of the
provisions, and the intent, of this Agreement, and every agreement or document
relating hereto, or entered into in connection herewith.

 

12.15.                                                                  Securities
Disclosures and Public Announcements

 

Disclosure of this
Agreement, the financial impact of this Agreement and related transactions on
the parties, and the terms and conditions of this Agreement (both in summary
form and through exhibit filings) may be required under SEC regulations, stock
market rules, or any other laws.  Members
may rely in good faith on advice of counsel when determining whether such
disclosure is required.  Except as
recited above and in Section 12.01, no Member will make public announcements nor issue press releases
relating to this Agreement without the prior written consent of the other
Member(s), which consent will not be unreasonably withheld.

 

12.16.                                                                  Confidentiality

 

Subject to Section 12.15, each party agrees
that it will treat any provisions of this Agreement not required to be
publically disclosed as confidential and will handle confidential information
of the other party in a manner consistent with the policies and practices of
that party for handling its own confidential information and in no case with
less than a reasonable standard of care. 
Notwithstanding the foregoing, either party may provide a copy of this
Agreement to a third party considering in good faith a bona fide transaction as
contemplated in Sections 8.04 or 12.11, provided that such third party agrees
in writing to be bound to a confidentiality agreement customary to such
transactions and prohibiting use of its knowledge of this Agreement or its
provisions for any competitive purpose. 
If the entire Agreement is terminated, the obligations set out in this Section will
extend for a period of five (5) years from this termination date.

 

28

 

12.17.                                                                  Bankruptcy

 

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

 

12.18.                                                                  Survival

 

Any
rights and obligations which by their nature (or explicit statement) survive
and continue after any expiration or termination of this Agreement will survive
and continue and will bind the parties and their successors and assigns, until
such obligations are fulfilled.  For
avoidance of doubt, upon expiration or termination of this Agreement, the
provisions of Sections 2.03, 2.04, 3.06, 5.01, 5.02, 5.03, 5.04, 8.04, 9.01,
12.07, 12.08, 12.09, 12.11, 12.16, and 12.17 will survive and remain in effect
until fulfilled.

 

End of text; the signature page follows

 

29

 

IN WITNESS WHEREOF, the members hereto have caused
this Agreement to be executed by their duly authorized representatives,
effective as of the Effective Date.

 

	
   

  	
  DIGIMARC
  CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Bruce Davis

  
	
   

  	
   

  	
  Name:
  Bruce Davis

  
	
   

  	
   

  	
  Its:
  Chief Executive Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  THE
  NIELSEN COMPANY (US) LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Itzhak Fisher

  
	
   

  	
   

  	
  Name:
  Itzhak Fisher

  
	
   

  	
   

  	
  Its: Global Product Leadership

  

 

 

Schedule 4.01

 

Members’ Committee

 

Digimarc
Representatives:

 

1.
Bruce Davis

 

2.
Robert Chamness

 

Nielsen
Representatives:

 

1.
Itzhak Fisher

 

2.  Bruce Haymes

 

 

Schedule 5.02

 

Excluded Patents

 

	
  Patent No./Serial No.

  	
   

  	
  Title

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  USPN [**]

  	
   

  	
  [**]

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  USPN [**] (a continuation of USPN [**])

  	
   

  	
  [**]

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  USPN [**]

  	
   

  	
  [**]

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  USPN
  [**]

  	
   

  	
  [**]

  	
   

  

 

and any reissues, continuations,
continuations-in-part, divisionals, extensions, re-examinations, substitutions,
renewals and foreign counterparts and equivalents of those patents.

 

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

 

 

Schedule 5.02 (d)

 

Services Agreement

 

 

Schedule 5.02 (d)

 

DEVELOPMENT SERVICES AGREEMENT

 

This
is a Development Services Agreement (the “Agreement”) between Digimarc
Corporation, a Delaware corporation, having a place of business at 9405 SW
Gemini Drive, Beaverton, Oregon 97008, and its subsidiaries (“Digimarc”), and
[Newco 1, LLC], a Delaware limited liability company, having a place of
business at 9405 SW Gemini Drive, Beaverton, 97008 (“Newco 1”).

 

For
good and valuable consideration as stated herein, the parties hereby agree as
follows:

 

This
Agreement is entered into contemporaneously with, and appended as a schedule
to, the Limited Liability Company Agreement of [Newco 1, LLC].

 

The
effective date of this Agreement is July 1, 2009 (“Effective Date”).

 

Definitions
of terms defined in the Limited Liability Company Agreement of [Newco 1, LLC]
are not repeated here.

 

1.               IP
Ownership and License Grants.

 

1.1.          Technology and Patents Developed
Pursuant to Development Services Agreement. 
Ownership and licensing of intellectual property shall be consistent
with section 5.01 of the Limited Liability Company Agreement of [Newco 1, LLC]
with respect to the Digimarc Services provided for herein.

 

2.               Digimarc
Services.

 

2.1.          Authorized
Services.  Digimarc will perform
services for Newco 1 relating to the development of Newco 1 products and
services (the “Digimarc Services”), including research, development,
engineering, quality assurance, market research and development, strategic
planning, strategy development, business development, project management,
reporting, and such other services or activities as will be determined from
time to time by the management of Newco 1 and the Members’ Committee of Newco
1.  Digimarc will perform the Digimarc
Services in good faith and with a reasonable standard of quality, but in no
event with a standard of quality less than that Digimarc employs for services
Digimarc performs for itself.  The Digimarc Services shall not
include any time or labor spent by Digimarc in its own strategic planning or
the management of its own organization, outside of the management of the
specific activities to be conducted as part of such Services.

 

2.2.          Annual Work Plan.  The particular Digimarc Services to be
performed and expenditures to be made by Digimarc shall be set forth in an
annual work 

 

 

plan
and budget (the “Annual Work Plan”) as adopted and approved by the management
of Newco 1.  The parties shall mutually
agree upon a process for determining the Annual Work Plan consistent with the
Approved Budget and Approved Business Plan process of and for Newco 1.  The Annual Work Plan shall state reasonable
and specific objectives to be met by Digimarc, and which shall take into
account Newco 1’s strategic goals and operational experience, Digimarc’s
resources and capabilities to assist Newco 1 in achieving those goals, and the
market conditions then prevailing.  The
parties shall also mutually agree upon an informal process for change
management and for resolving disputes concerning determination of the Annual
Work Plan.  In all events, Digimarc shall
make resources available in each year covered by a timely submitted and
reasonable Annual Work Plan (a “Plan Year”) sufficient to perform the Digimarc
Services identified in the Annual Work Plan. 
The first Plan Year for the rest of 2009 will begin on July 1,
2009, prior to completion of the Annual Work Plan, based upon a short statement
of work to be agreed upon by the parties. 
The Annual Work Plan for 2010 will be determined as soon as practicable
thereafter, and no later than December 31, 2009.  Successive Annual Work Plans shall be
determined no later than ninety (90) days prior to the beginning of each
subsequent Plan Year.  If Digimarc
reasonably believes that any requested changes to the Annual Work Plan will
result in additional expenditures exceeding those approved by Newco 1 in the
Annual Work Plan, it shall so inform Newco 1. 
If Newco 1 and Digimarc agree to the requested changes and such
additional expenditures, they shall amend the Annual Work Plan to reflect such
changes.  Unless the Members’ Committee
of Newco 1 authorizes such additional expenditures in writing, Newco 1 shall
not be obligated to pay for Digimarc Services in excess of the larger of (a) the
amount set forth in the Annual Work Plan (including as amended pursuant to the
preceding sentence) or (b) the Service Minimum Fee (as defined below).

 

2.3.          Quarterly Reporting and Review.  Within thirty (30) days following the end of
each quarter during each Plan Year, Digimarc shall provide reports stating its
progress in achieving the objectives set forth in the Annual Work Plan, and
describing in detail the Digimarc Services performed and expenditures made in
that quarter.  The parties shall mutually
agree upon a process for a joint quarterly review of Digimarc’s progress in
achieving the objectives set forth in the Annual Work Plan, and for considering
any changes that either Newco 1 or Digimarc may propose to the Annual Work
Plan.

 

2.4.          Minimum Service Fees.  Subject to any termination of its obligation
to engage Digimarc to perform the Digimarc Services, Newco 1 shall pay, in
equal quarterly payments as set forth below, the following minimum annual
amounts for Digimarc Services in each Plan Year (the “Minimum Service Fees”):

 

	
  Annual Work Plan Period

  	
   

  	
  Plan Year 2009

  	
   

  	
  Plan Year 2010

  	
   

  	
  Plan Year 2011

  	
   

  
	
  Minimum Fees

  	
   

  	
  $

  	
  1.13 million

  	
   

  	
  $

  	
  2.80 million

  	
   

  	
  $

  	
  2.74 million

  	
   

  
											

 

In
the event that Digimarc is retained to provide development services to [Newco
2, LLC] during the term of this Agreement, the amounts paid by [Newco 2, LLC]
shall be

 

 

credited
against the minimums set forth above. 
Quarterly payments of such fees, including Minimum Service Fees, will be
due and payable to Digimarc only for those quarters in which Digimarc performs
Digimarc Services in accordance with a timely submitted and reasonable Annual
Work Plan, at such levels as would be sufficient to generate the Minimum
Service Fees as set forth above; or if Newco 1 fails to timely submit a
reasonable Annual Work Plan, in which Digimarc was ready, willing and able to
perform such level of Digimarc Services. 
Quarterly Minimum Service Fee payments
are due and payable to Digimarc on the first day of each quarter in which the
Digimarc Services are to be provided.  Minimum
Service Fees do not include any hardware, equipment or software purchased on
behalf of Newco 1 by Digimarc.  Hardware,
equipment or software will only be purchased on behalf of Newco 1 by Digimarc
upon written approval by Newco 1 and will be charged back to Newco 1 with no
markup.

 

2.5.          Labor Rates. 
Labor rates charged for Digimarc Services will be as shown in Appendix
A.  The labor rates will be increased on January 1
of each year based on the report used by Digimarc for evaluating annual labor
rates for similar project work, reflecting an determination of average rates of
wage and benefits cost inflation, and may otherwise be adjusted by mutual
agreement of the parties. The Members shall have an opportunity to review the
aforementioned labor report prior to implementation of any annual labor rate
adjustments.

 

2.6.          Digimarc Services Payment Schedule
and Invoice.  Digimarc shall furnish
an invoice to Newco 1 following each quarter of any Plan Year.  The invoice shall be accompanied by an
itemization of the Digimarc Services actually performed in that quarter,
including an identification of individual timekeepers, their respective hours
and rates, and the nature of the work performed by them with reference to the
objectives of the Annual Work Plan.  The
invoice shall also be accompanied by an itemization of those out-of-pocket
expenditures reasonably incurred by Digimarc in performing the Digimarc
Services, reimbursement of which shall be included in the Minimum Service
Fees.  Within thirty (30) days of receipt
of such invoice, Newco 1 shall pay for Digimarc Services actually performed by
Digimarc in accordance with the then-current Annual Work Plan in that quarter
to the extent that the Digimarc Services actually performed by Digimarc within
that Plan Year to date, as reflected in the cumulative quarterly invoices for
that Plan Year, exceed the Minimum Service Fees owed for that Plan Year
cumulatively to date.  If the amount of
Digimarc Services actually performed and invoiced in that quarter, when added
to the amount of Digimarc Services actually performed and invoiced in prior
quarters of that Plan Year, is less than the Minimum Service Fees owed for that
Plan Year cumulatively to date, Newco 1 shall [**].

 

2.7.          Audit
Rights.  For a period of three (3) years
following the end of any Plan Year, or until resolution of a dispute concerning
the accuracy of the invoices or quarterly reports for a particular Plan Year
arising within that three-year period, Newco 1 (and its designated agents)
shall have the right to inspect and examine Digimarc’s books and records
relating to the Digimarc Services, including time records and activity logs, 

 

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

 

 

for the purpose of determining whether Digimarc’s
invoices and  quarterly
reports for that Plan Year are accurate; provided, however, that Digimarc may redact such documents to preserve
the confidentiality of Digimarc proprietary information that is not necessary
to verify the accuracy of the invoices or quarterly reports.  Any
such inspection and examination will take place upon reasonable prior written
notice to Digimarc, during regular business hours and no more than once a
year.  Digimarc shall promptly refund to
Newco 1 any amount that the audit shows was overpaid by Newco 1 in that Plan
Year per the Agreement and, if the overpayment is greater than 5% of the total
payment for that Plan Year, Digimarc shall also pay the reasonable
out-of-pocket costs of the inspection and examination.

 

2.8.          Newco 1 Commitment of Resources.   Newco 1 shall use its commercially
reasonable efforts to develop and support its products and services, including
the commitment of a reasonable amount of marketing, financial and
organizational resources.  In furtherance
of those efforts, Newco 1 shall prepare an Annual Work Plan for the development
and support of the Newco 1 products and services business, shall invite
Digimarc to advise and contribute to the formation of such plan, and shall
share such plan with Digimarc.   The Members’ Committee shall review the Annual
Work Plan at each quarterly meeting and make whatever changes it believes
necessary and appropriate for the operation of the Company.

 

2.9.          Digimarc Opportunity to Bid.   For so long as [**], Newco 1 shall provide
Digimarc with a reasonable opportunity to [**].

 

2.10.        Limitations on Digimarc Services for
Other Parties.  For as long as Newco
1 is timely paying Digimarc for Digimarc Services, Digimarc shall not [**].

 

2.11.        Patent Prosecution.  To the extent that the parties identify
potentially patentable inventions arising from the Digimarc Services, with the
consent of and pursuant to the direction of the Members’ Committee, the parties
will determine how and whether to prosecute a patent for such inventions.

 

3.              Remedies
for Breach.

 

3.1.          Remedies for
Breach.  If either party materially
breaches this Agreement, the non-breaching party may, in addition to other
remedies at law and in equity, terminate this Agreement.  Prior to terminating this Agreement for breach,
the non-breaching party must first give the breaching party written notice
specifying in detail the alleged breach. 
The breaching party shall then have seventy-five (75) days to cure such
breach.

 

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

 

 

4.              Termination.

 

The
term of this Agreement is through December 31, 2011.

 

5.              Other
Provisions.

 

5.1.          Confidentiality.  Each party agrees that it will treat
confidential information of the other party in a manner consistent with the
confidentiality agreement between the parties. 
Notwithstanding the foregoing, either party may provide a copy of this
Agreement to a third party considering in good faith a bona fide transaction as
contemplated in Section 5.2, provided that such third party agrees in
writing to be bound to a confidentiality agreement customary to such
transactions and prohibiting use of its knowledge of this Agreement or its
provisions for any competitive purpose. 
Upon request by the disclosing party with respect to specifically
identified information, the receiving party will return to the disclosing party
or destroy all of the confidential information in the receiving party’s
possession or control furnished to it by the disclosing party which the
receiving party does not need to retain in order to perform any obligations
imposed, or exercise any rights (including rights of ownership) acquired, by
this Agreement, and shall certify in writing its return or destruction of such
confidential information.  If the
receiving party is subject to judicial or governmental proceedings or is
subject to government regulations requiring disclosure of confidential
information of the disclosing party, then prior to disclosing such information,
the receiving party will provide the disclosing party with reasonable prior
notice for the disclosing party to seek a protective order for confidential
treatment of the confidential information and will only disclose that
information that is necessary and required. 
If the entire Agreement is terminated, the obligations set out in this Section will
extend for a period of [**] years from this termination date, except that the
confidential information of the disclosing party that is specifically
identified by it as a trade secret will be protected for a period of [**]
years.

 

5.2.            Assignment.  Neither party may assign any of its rights or obligations under this Agreement to any
person without the prior written consent of the other, and any such
purported assignment shall be null and void from inception; provided, however,
that (a) either party may assign all its rights and delegate all its
obligations hereunder to a single person without such approval in connection
with: (i) a merger, consolidation, reorganization, statutory conversion,
amalgamation or similar corporate transaction, or (ii) a sale or other
disposition of all or substantially all of its assets in the businesses
relating to this Agreement, and (b) Newco 1 may assign all its rights and
delegate all its responsibilities to an Affiliate in connection with a
restructuring or reorganization of Newco 1.

 

5.3.          Bankruptcy.  Any intellectual property licenses and rights
granted to either party hereunder or pursuant hereto are, and will be deemed to
be, for purposes of Section 365(n) of the United States Bankruptcy
Code (“Code”) licenses of “intellectual property”, as defined under the
Code.  Notwithstanding any provision
contained herein to the contrary, if a party is under any proceeding under the
Code and the trustee in bankruptcy of that party, or that party as a debtor in
possession, rightfully elects to reject 

 

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

 

 

this
Agreement, then the other party pursuant to the relevant portions of Section 365(n) of
the Code may retain any and all of such other party’s licenses and rights
hereunder to the maximum extent permitted by law.

 

5.4.          Limitations on Damages.  NEITHER DIGIMARC NOR NEWCO 1 WILL BE LIABLE
FOR ANY INDIRECT, INCIDENTAL, CONSEQUENTIAL, EXEMPLARY, RELIANCE, PUNITIVE OR
SPECIAL DAMAGES ARISING UNDER THIS AGREEMENT, EVEN IF ADVISED OF THE
POSSIBILITY OF SUCH DAMAGES.

 

5.5.          Governing Law, Jurisdiction and
Venue.  This Agreement shall be
governed by New York law.  All matters
concerning the interpretation of, or performance under, this Agreement will be
resolved in the state or federal courts in New York applying New York law and
jurisdiction and venue will be proper in such New York courts.

 

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

 

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

 

The
contacts to address the notices to are:

 

If to Digimarc:

Digimarc Corporation

9405 S.W. Gemini Drive

Beaverton, Oregon 97008 

Attention: Bruce Davis, CEO

with a copy to Robert Chamness, Chief Legal Officer and Secretary

Facsimile No.:  (503) 469-4771

 

 

If to Newco 1:

Newco 1, LLC

9405 S.W. Gemini Drive

Beaverton, Oregon 97008 

Attention:
                                ,
CEO

with a copy to the Legal Officer and Secretary

Facsimile No.:  (503) 469-4771

 

If to Nielsen:

The Nielsen Company (US) LLC

770 Broadway

New York, NY 10036

Attention: Itzhak Fisher, Global Product Leadership

with a copy to the Chief Legal
Officer

Facsimile No.: (646) 654-8318

 

5.8.          Integration.  This
Agreement embodies the entire agreement of the parties hereto regarding the
subject matter herein, and supersedes and cancels any and all previous
negotiations, agreements or commitments with respect to them, including without
limitation the terms and conditions under a prior agreement between Digimarc and
Nielsen executed on November 27, 2007, with an effective date of October 1,
2007 (the “Prior Agreement”) (including all payment obligations of Nielsen
accruing after the Effective Date).

 

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

 

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

 

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

 

5.12.        No Agency.  Nothing in this Agreement will be construed
as creating any agency, partnership or other form of joint enterprise between
Digimarc and Newco 1.    Neither party
will have authority under this Agreement to contract for or bind the other in
any manner whatsoever.

 

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

 

 

5.14.        Survival.  Upon expiration or termination of this
Agreement, rights to payment under this Agreement and the provisions set out in
Sections 1, 2.4, 2.7, 3.1, 5.1, 5.2, 5.3, 5.4, 5.6, 5.7, and 5.13 will remain
in effect.

 

5.15.        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.

 

IN WITNESS WHEREOF, the Members’ Committee has
adopted this Agreement as part of the Limited Liability Company Agreement of
[Newco 1, LLC], to be effective as of the Effective Date.

 

 

APPENDIX A:  LABOR RATES (current
rates)

 

	
  Job Classification

  	
   

  	
  Rate

  	
   

  
	
  Account Manager

  	
   

  	
  $

  	
  [**]

  	
   

  
	
  Director

  	
   

  	
  $

  	
  [**]

  	
   

  
	
  Engineering Manager

  	
   

  	
  $

  	
  [**]

  	
   

  
	
  Executive

  	
   

  	
  $

  	
  [**]

  	
   

  
	
  Lawyer

  	
   

  	
  $

  	
  [**]

  	
   

  
	
  Paralegal

  	
   

  	
  $

  	
  [**]

  	
   

  
	
  Market Development Manager

  	
   

  	
  $

  	
  [**]

  	
   

  
	
  Marketing Engineer

  	
   

  	
  $

  	
  [**]

  	
   

  
	
  Product Manager

  	
   

  	
  $

  	
  [**]

  	
   

  
	
  Project Director

  	
   

  	
  $

  	
  [**]

  	
   

  
	
  QA Engineer

  	
   

  	
  $

  	
  [**]

  	
   

  
	
  R&D Engineer

  	
   

  	
  $

  	
  [**]

  	
   

  
	
  Software Engineer

  	
   

  	
  $

  	
  [**]

  	
   

  
	
  Technical Writer

  	
   

  	
  $

  	
  [**]

  	
   

  
	
  IT Network Support

  	
   

  	
  $

  	
  [**]

  	
   

  

 

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

 

 

 

Schedule 5.03

 

Nielsen Data License

 

 

MASTER
SERVICES AGREEMENT

BY AND BETWEEN

THE NIELSEN COMPANY (US), INC.

AND

[Name of Client]

 

This Agreement (“Agreement”),
dated as of [effective date of Agreement], between The Nielsen Company (US), Inc.,
a New York corporation (“Nielsen”), and [Name of Client], a [state/type of
organization] (“Client”), governs the provision and use of data, information,
technology and related services (“Services”) identified in one or more local
service agreements or in a project order for Custom Services (as defined below)
(each an “LSA”), entered into by Nielsen and Client and/or their respective
affiliates.  “Nielsen” shall mean Nielsen
and/or its affiliates and “Client” shall mean Client and/or its affiliates, and
in each LSA “Nielsen” shall mean the Nielsen entity providing the Services and “Client”
shall mean the Client entity receiving the Services under such LSA.  Each LSA binds only the Nielsen and Client
entities which execute the LSA, or on behalf of which the LSA is executed, and
does not vest rights in any affiliate that is not a party to such LSA.  This Agreement shall apply to any services
provided to Client during the term of this Agreement, whether or not specified
in an LSA.

 

Article 1.               Scope of Service

 

1.1          Services; Ownership and License.  Nielsen shall
deliver the Services set forth in each LSA (which may include one or more of
the following) for use solely by Client in accordance with this Agreement and
such LSA.  The data and information
included in Services are referred to as “Nielsen Information”.  Client agrees that:

 

(a)           “Licensed Services” are services to
which Nielsen retains ownership and which Nielsen does not sell but licenses to
multiple clients including, among others, media, household panel, retail tracking,
online and mobile services and Technology Services (as defined below).  Client is granted a limited, non-exclusive
license to use Licensed Services as set forth in this Agreement and any
applicable LSA.

 

(b)           “Custom Services” include BASES and
certain customized research Services (not including any Technology Services)
and ownership of such Custom Services shall be subject to the terms of the
applicable LSA and/or project order.

 

(c)           “Technology Services” include
Internet portals, access and analytic tools, licensed systems, templates and
software (including delivery media, manuals, updates and new versions provided
by Nielsen), and Client shall maintain, and upgrade if necessary, its hardware,
operating systems and third party software consistent with any requirements
and/or changes to the Technology Services, and Nielsen shall provide Client
with notice of such requirements and/or changes for the operation of Technology
Services prior to implementation.

 

 

Article 2.                                            Fees
and Taxes

 

2.1          Fees.  Client agrees to pay the fees set forth in
each LSA and such fees are due when invoiced and are payable within 30 days of
the date of the invoice.  Client agrees
to pay interest at 1.5% per month (or, if lower, the maximum legal rate) from
the date originally due until payment is received by Nielsen on all amounts
thereafter.

 

2.2          Taxes.  Client is responsible for all value-added,
goods and services, sales, use and similar taxes due with respect to the
Services.

 

Article 3.                                            Use
of Services

 

3.1          Uses and Disclosure of Services.  Client may
only use Services internally except as permitted in (a) and (b) below
and in an LSA or other written agreement signed by an expressly and duly
authorized representative of Nielsen. 
Client may:

 

(a)           in the case of Licensed Services,
include “Limited Excerpts” (meaning Nielsen Information that is not of
sufficient quantity or quality as to have independent commercial value, as
determined by Nielsen in its sole discretion) in annual reports, reports to the
financial community and releases to the media for the purpose of corporate
image-building or product promotion; and

 

(b)           in the case of Custom Services, use
Nielsen Information (i) in the conduct of its business with partners,
suppliers and customers, and (ii) with Nielsen’s prior written consent, in
advertising or promotion of Client’s products or services.

 

Any Nielsen Information that is disclosed must be
accurately sourced to Nielsen, be disclosed only to authorized third parties,
and not be presented in a misleading manner.

 

3.2          Uses of References.  Disaggregated
data, data dictionaries, reference tools, data methodologies, data
attributes/characteristics and flat files are referred to as “References” and
may only be used internally unless disclosure to a third party is authorized in
writing by Nielsen.

 

3.3          Restrictions.  Client shall not decompile, reverse engineer,
disassemble, sublicense, distribute, dispose of, modify, adapt, translate, or
remove any proprietary or copyright legend from any Service or Nielsen
Information.

 

3.4          Third Parties.  Client may furnish Nielsen
Information to third parties (such as consultants and third party processors)
retained by Client for use solely on behalf of Client provided that, prior to
accessing such Nielsen Information, the third party shall have entered into
Nielsen’s then standard form of agreement for such third party, as determined
by Nielsen in its sole discretion.  At
its discretion, Nielsen may decline to enter into such agreement or grant a
particular third party access or rights to Nielsen Information, and Nielsen
reserves the right to charge for such access. 
Nielsen is not responsible for the accuracy of information produced by
such third party from Nielsen Information.

 

3.5          Legal Proceedings.  No Services or Nielsen
Information may be used in any legal or administrative proceeding.  If such use is compelled by legal process,
Client shall 

 

 

promptly give Nielsen
advance written notice and, before such use, obtain confidentiality agreements,
protective orders and evidentiary stipulations acceptable to Nielsen and shall
limit the use to the minimum necessary to comply with such legal requirement.

 

Article 4.                                            Changes
to Services and Charges

 

4.1          Changes to Service.  Nielsen may,
from time to time, in its sole discretion, make changes to any Service or
portion thereof including, without limitation, formats, schedules,
specifications and/or techniques.

 

4.2          Charges.  In the event of a change to a Service,
Nielsen may, upon 30 days’ prior written notice, adjust the fees for such Service.  Such fee change shall become effective on the
date stated in Nielsen’s notice unless, within 15 days after such notice,
Client notifies Nielsen in writing of its refusal to accept the fee change, in
which event the applicable Service to Client shall terminate as of the
effective date of the change; provided, however, that Nielsen may, in its sole
discretion, elect to rescind the fee change, in which case the Service to
Client, as changed, shall continue as provided in the applicable LSA.

 

Article 5.                                            Warranties,
Limitation of Liability, Exclusive Remedy and Indemnification

 

5.1          Disclaimer of Warranties.  Client
recognizes that Nielsen Information represents Nielsen’s opinion based on its
analysis of data and information, including data from sample households and
other sources that may not be under Nielsen’s control, and that Nielsen cannot
guarantee the accuracy of Nielsen Information. 
Without limiting the foregoing, NIELSEN DISCLAIMS, AND CLIENT HEREBY
WAIVES, ANY AND ALL WARRANTIES, WHETHER EXPRESS OR IMPLIED, TO CLIENT OR TO ANY
THIRD PARTY, CONCERNING THE SERVICES AND NIELSEN INFORMATION PROVIDED HEREUNDER
OR UNDER AN LSA INCLUDING, BUT NOT LIMITED TO, ANY WARRANTIES OF
MERCHANTABILITY, QUALITY OR FITNESS FOR ANY PARTICULAR PURPOSE.  The foregoing disclaimer shall not act as or
constitute an admission by Nielsen that any Services or Nielsen Information
constitute goods, commodities or tangible personal property under applicable
law.

 

5.2          Limitation of Nielsen’s Liability; Exclusive Remedies. 
Nielsen will give a pro rata refund of fees paid for any Nielsen
Information for such period of time as it fails to provide the Nielsen
Information and will use reasonable efforts to correct material errors Client
identifies in Nielsen Information. 
Nielsen will not be liable, in contract, tort (including negligence) or
otherwise, for any loss, expense or damage of any kind including, without
limitation, special, incidental or consequential damages, due to any failure to
provide any Service or resulting from any errors or inaccuracies in the Nielsen
Information or from the use by Client or others of any Service or Nielsen
Information.  UNLESS OTHERWISE PROHIBITED
BY APPLICABLE LAW, NIELSEN SHALL NOT BE LIABLE FOR ANY CLAIM BROUGHT AFTER THE
SHORTER OF 1 YEAR AFTER THE CAUSE OF ACTION HAS ACCRUED OR MORE THAN 2 

 

 

YEARS AFTER THE
TERMINATION OF THIS AGREEMENT OR THE APPLICABLE LSA.  THESE REMEDIES ARE EXCLUSIVE.

 

5.3          Indemnity.  Client agrees to indemnify and hold Nielsen
harmless from and against all claims, damages, loss or expenses (including
attorneys’ fees) arising, directly or indirectly, from (i) Client’s
permitted disclosure pursuant to paragraph 3.1 or an LSA or (ii) Client’s
disclosure or use of the Services or Nielsen Information contrary to the terms
of this Agreement or an LSA.

 

Article 6.                                            Term,
Suspension and Termination

 

6.1          Term.  Unless terminated in accordance with the
terms hereof, this Agreement, licenses and the Services rendered hereunder
shall commence on the date hereof and shall remain in effect for so long as any
LSA remains in full force and effect.

 

6.2          Return of Materials upon Termination.  Upon
termination or expiration of this Agreement or any LSA, (i) Client shall
discontinue use of and return to Nielsen all Licensed Services and Technology
Services and the Nielsen Information, including References provided thereunder,
and (ii) all rights and licenses granted to Client to use such Services
shall cease and terminate immediately. 
In lieu of return, Client may remove Nielsen Services from its systems
and records, destroy tangible forms thereof, and certify such
removal/destruction in a written form satisfactory to Nielsen.

 

6.3          Partial Termination of Services Due To Third Party Activity. 
Certain Services are based on data or information from third parties and
Nielsen may discontinue furnishing a Service or any portion thereof to the
extent any such third party data or information ceases to be available to
Nielsen for any reason.

 

6.4          Suspension of Services.  The provision
of Services or licenses, or any portion thereof, may be suspended by Nielsen at
any time in the event that Client fails to perform its payment or other
obligations set forth herein or in an LSA. 
Such suspension of Service shall not suspend or otherwise affect Client’s
payment obligations set forth herein or in an LSA.

 

6.5          Termination by Nielsen.  This
Agreement and any LSA and any or all of the Services or licenses provided
hereunder or under an LSA may be terminated by Nielsen on any date specified by
Nielsen (i) if Client has failed to perform any one or more of its payment
or other obligations hereunder, (ii) if Nielsen is or will become unable
for any reason beyond its control to perform its obligations hereunder, or (iii) if
Nielsen is terminating such Service to all clients then subscribing to a class
of such Service.

 

Article 7.                                            General
Provisions

 

7.1          Survival.  The rights and obligations of Nielsen and
Client set forth in Articles 2, 3, and 5 and Sections 6.2, 7.6 and 7.8 shall
survive the termination of this Agreement or of any LSA.

 

 

7.2          Force Majeure.  In the event either party is
delayed in or prevented from performing any act required hereunder due to
failure of any communication system or on- or off-line computing equipment,
labor troubles, inability to procure materials, governmental or judicial
orders, acts of God, acts of terrorism, weather conditions, third party
interference or other similar reason beyond its control, then performance of
such act shall be excused for the period of such delay; provided, however, that
Client’s obligation to make any payment pursuant to this Agreement or an LSA
shall not be excused for more than ten (10) days.

 

7.3          Independent Contractor Relationship.  The parties
to this Agreement are independent contractors and neither shall have authority
to bind or obligate the other.

 

7.4          Notices.  Any notice or request given hereunder shall
be in writing and deemed given on the date received when delivered personally
or by internationally recognized delivery service (i) if to Nielsen at The
Nielsen Company (US), Inc., 770 Broadway, New York, NY 10003,
Attention:  Chief Executive Officer, with
a copy to the same address, Attention: 
Chief Legal Officer; and (ii) if to Client at [Client Name,
Address], Attention:  [Chief Executive
Officer/General Counsel).

 

7.5          Assignment.  This Agreement is for the benefit of and
binding on the parties and their successors and assigns.  Subject to the prior written consent of
Nielsen, Client may assign its rights under this Agreement to a successor to
all or substantially all of the business of Client, provided all obligations of
Client are assumed by the assignee and documentation satisfactory to Nielsen of
such assumption has been delivered to Nielsen. 
Nielsen reserves the right to assign its rights to an affiliate of
Nielsen or a successor to all or substantially all of the business of Nielsen,
and reserves the right to have any Services rendered by such affiliate or
successor, after providing notice in writing to Client.

 

7.6          Injunctive Relief.  Any breach of the use of
services provisions of Article 3 of this Agreement or similar provisions
in an LSA may cause irreparable harm to Nielsen, for which Nielsen’s remedies
at law will not be adequate.  Nielsen
shall be entitled to injunctive relief without having to prove irreparable
injury, lack of an adequate remedy at law, posting bond or waiving any other
rights.

 

7.7          Entire Agreement; Modification or Amendment; Waiver. 
This Agreement together with any LSA contains the entire understanding
of the parties with respect to the provision of Services covered by such LSA
and supersedes all previous discussions and agreements relating to such
Services.  Neither this Agreement nor any
LSA may be modified or amended except in a writing executed by the
parties.  No waiver by a party of any
breach of this Agreement or an LSA shall be deemed a waiver of any prior or
subsequent breach.

 

7.8          Governing Law.  This Agreement shall be
governed by the law of the State of Illinois, United States of America, without
regard to its choice of law provisions. 
The parties agree to the exclusive personal jurisdiction of the State
and Federal courts located in Chicago, Illinois for purposes of determining all
disputes arising in connection with this Agreement and hereby waive all objections
to venue in those courts.  Each LSA shall

 

 

be governed by the laws
of the State of Illinois unless another jurisdiction is specified in such LSA.

 

IN WITNESS
WHEREOF, this Agreement has been executed by the parties hereto through their
duly authorized representatives as of the date set forth above.

 

	
  THE
  NIELSEN COMPANY (US), INC.

  	
   

  	
   

  	
  [Name of Client]

  
	
   

  	
   

  	
   

  	
   

  
	
  By

  	
   

  	
   

  	
   

  	
  By

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  	
   

  	
  Title:EXHIBIT 10.3

 

CONFIDENTIAL
PORTIONS OMITTED

 

LIMITED LIABILITY COMPANY
AGREEMENT

 

OF

 

NEWCO 2, LLC

 

DATED JUNE 11, 2009

 

 

TABLE OF CONTENTS

 

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  I   DEFINITIONS

  	
  1

  
	
   

  	
   

  
	
  ARTICLE
  II   BUSINESS PURPOSE AND ACTIVITIES

  	
  6

  
	
  2.01.

  	
  Place of Business

  	
  6

  
	
  2.02.

  	
  Nature of
  Business

  	
  6

  
	
  2.03.

  	
  Excluded Scope

  	
  7

  
	
  2.04.

  	
  Marketing and
  Sales To Current Customers of Digimarc or Nielsen

  	
  7

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  III   FORMATION AND TERM

  	
  7

  
	
  3.01.

  	
  Formation

  	
  7

  
	
  3.02.

  	
  Members’
  Interests

  	
  8

  
	
  3.03.

  	
  Name

  	
  8

  
	
  3.04.

  	
  Term

  	
  8

  
	
  3.05.

  	
  Registered Agent
  and Office

  	
  8

  
	
  3.06.

  	
  Title to Assets

  	
  8

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  IV   MANAGEMENT OF THE COMPANY

  	
  8

  
	
  4.01.

  	
  Members’
  Committee

  	
  8

  
	
  4.02.

  	
  Management of
  the Company

  	
  10

  
	
  4.03.

  	
  Prior Approval

  	
  10

  
	
  4.04.

  	
  Additional
  Funding

  	
  12

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  V   RIGHTS IN IP; ANCILLARY LICENSES AND SERVICES

  	
  12

  
	
  5.01.

  	
  Company Rights
  to Developed Intellectual Property

  	
  12

  
	
  5.02.

  	
  Digimarc License
  and Services

  	
  13

  
	
  5.03.

  	
  Nielsen Licenses
  and Services

  	
  13

  
	
  5.04.

  	
  Ability to Grant
  Licenses

  	
  14

  
	
  5.05.

  	
  Transitional
  Services; Real Estate Arrangements

  	
  15

  
	
  5.06.

  	
  Company License
  and Services

  	
  15

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  VI   FUNDING, ALLOCATIONS, DISTRIBUTIONS AND CAPITAL ACCOUNTS

  	
  15

  
	
  6.01.

  	
  Funding; Capital
  Contributions

  	
  15

  
	
  6.02.

  	
  Fiscal Year

  	
  16

  
	
  6.03.

  	
  Distributions to
  the Members

  	
  16

  
	
  6.04.

  	
  Certain Other
  Allocation Rights

  	
  18

  
	
  6.05

  	
  Additional
  Capital Contribution

  	
  18

  
	
  6.06

  	
  Member’s Failure
  To Make Capital Contributions

  	
  18

  
	
  6.07.

  	
  Accounting
  Procedures

  	
  19

  
	
  6.08

  	
  Principle Tax
  Matters

  	
  19

  
	
  6.09

  	
  Payment and
  Withholding of Certain Taxes

  	
  20

  
	
  6.10

  	
  Organizational
  Expenses

  	
  21

  
	
  6.11

  	
  Classification

  	
  21

  

 

i

 

	
  ARTICLE
  VII   BUDGETS AND BUSINESS PLANS

  	
  22

  
	
  7.01.

  	
  Business Plans
  and Budgets

  	
  22

  
	
  7.02.

  	
  Approval by the
  Members’ Committee

  	
  22

  
	
  7.03.

  	
  Default Budget

  	
  22

  
	
  7.04.

  	
  Default Business
  Plan

  	
  22

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  VIII   CERTAIN REPRESENTATIONS, WARRANTIES, AND COVENANTS

  	
  23

  
	
  8.01.

  	
  Authorization

  	
  23

  
	
  8.02.

  	
  Absence of
  Conflict

  	
  23

  
	
  8.03.

  	
  Certain
  Covenants

  	
  23

  
	
  8.04.

  	
  Restricted
  Transfer of the Company Interest

  	
  23

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  IX   DISSOLUTION

  	
  24

  
	
  9.01.

  	
  Dissolution

  	
  24

  
	
  9.02.

  	
  Liquidation

  	
  24

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  X   FORCE MAJEURE

  	
  25

  
	
   

  	
   

  	
   

  
	
  ARTICLE XI 
  LIABILITY AND INSURANCE

  	
  26

  
	
  11.01.

  	
  Liability

  	
  26

  
	
  11.02.

  	
  Insurance

  	
  26

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  XII   GENERAL PROVISIONS

  	
  26

  
	
  12.01.

  	
  No Publicity or
  Advertisement Without Prior Consultation

  	
  26

  
	
  12.02.

  	
  Severability

  	
  26

  
	
  12.03.

  	
  Article and
  Section Headings, Schedules and Exhibits

  	
  26

  
	
  12.04.

  	
  Counterparts

  	
  26

  
	
  12.05.

  	
  Gender and
  Number

  	
  27

  
	
  12.06.

  	
  Expenses

  	
  27

  
	
  12.07.

  	
  Notices

  	
  27

  
	
  12.08.

  	
  No Third Party
  Beneficiaries

  	
  28

  
	
  12.09.

  	
  Governing Law;
  Arbitration

  	
  28

  
	
  12.10.

  	
  Modifications,
  Amendments or Waivers

  	
  28

  
	
  12.11.

  	
  Assignment,
  Successors and Assigns

  	
  28

  
	
  12.12.

  	
  Joint
  Preparation

  	
  29

  
	
  12.13.

  	
  Entire
  Agreement; Termination of Prior Agreement

  	
  29

  
	
  12.14.

  	
  Further
  Assurances

  	
  29

  
	
  12.15.

  	
  Security
  Disclosures and Public Announcements

  	
  29

  
	
  12.16.

  	
  Confidentiality

  	
  29

  
	
  12.17.

  	
  Bankruptcy

  	
  30

  
	
  12.18.

  	
  Survival

  	
  30

  

 

ii

 

This LIMITED LIABILITY COMPANY AGREEMENT of Newco 2,
LLC (the “Company”) is made and entered into as of June 11, 2009 by
and between The Nielsen Company (US) LLC, a New York limited liability company,
having offices at 770 Broadway, New York, New York 10003 (“Nielsen”), and
Digimarc Corporation, a Delaware corporation, with offices at 9405 SW Gemini
Drive, Beaverton, Oregon 97008 (“Digimarc”).

 

INTRODUCTION

 

Whereas, Nielsen and Digimarc have entered into an
agreement executed on November 27, 2007 with an effective date of October 1,
2007, (the “Prior Agreement”), said Prior Agreement including terms and
conditions under which Digimarc provided Digimarc Services for Nielsen, and
granted to Nielsen certain licenses under Digimarc patents;

 

Whereas, under the Prior Agreement, Nielsen had certain
rights to terminate the Prior Agreement at the end of the second year or subsequently
during the term thereof, upon the satisfaction of certain conditions;

 

Whereas, for good and valuable consideration, Nielsen and
Digimarc have agreed to expand and extend their relationship and supersede the
Prior Agreement by entering into this Agreement and contemporaneously entering
into the Patent License Agreement and the Agreement with Newco 1, LLC of even
date herewith.

 

NOW, THEREFORE, for good and valuable consideration as
stated herein, the parties hereby agree as follows.

 

ARTICLE
I  

DEFINITIONS

 

The following terms have the following meanings when
used in this Agreement, unless the context expressly or by necessary
implication otherwise requires:

 

“Agreement” shall mean this Limited Liability
Company Agreement.

 

“Affiliate” of a specified Person shall mean a Person that directly or indirectly
through one or more intermediaries, controls or is controlled by, or is under
common control with, the Person specified. 
For purposes of this definition the term “control” (including the terms “controlling,”
“controlled by” and “under common control with”) means directly or indirectly
owning equity securities (or other ownership interests) representing more than
fifty percent (50%) of the voting power of all the outstanding equity
securities of such specified Person. 
That Person is an Affiliate with the Person specified only for so
long as such “control” of  or being “controlled
by” the Person specified exists.

 

“Approved Budget” shall mean an annual
budget, expressed in terms of net cash flow (including revenue, operating and
capital expenses) approved by the Members’ Committee in accordance with
Sections 7.01 and 7.02 hereof.

 

1

 

“Approved Business Plan” shall mean a two-year business plan approved
by the Members’ Committee in accordance with Sections 7.01 and 7.02 hereof.

 

“Assets” of a Person shall mean
all of that Person’s properties and assets (real, personal or mixed, tangible
or intangible), unless otherwise specified.

 

“Business” shall have the meaning described in Section 2.02 hereof.

 

“Capital Account” shall have the meaning described in Section  6.03(a) hereof.

 

“Certificate” means
the Certificate of Formation of the Company and any and all amendments thereto
and restatements thereof, as filed with the Secretary of State of the State of
Delaware pursuant to the Delaware Act.

 

“Chairman of the Members Committee” shall
mean Itzhak Fisher, Global Product Leadership, or any other designee of
Nielsen, for so long as Nielsen maintains an interest of at least 25% in the
Company.

 

“Code”
shall mean the Internal Revenue
Code of 1986, as amended.

 

“Company” shall mean Newco 2, LLC, the Delaware limited liability company the
Members form by entering into this Agreement.

 

“Company Data
License” means the Company’s then standard form of
license agreement (substantially similar to the Nielsen Data License) for any
Company Data Services provided to Nielsen during the Term, provided that there
shall be no payment by Nielsen to the Company in connection therewith.

 

“Company Data
Services” means data related to
[**] generated by the Company Products, including [**].

 

“Company Products”
means any business, product or service developed and marketed by the Company that combines
Digimarc Licensed IP and Nielsen Licensed IP as authorized by this Agreement or otherwise approved by the Members
Committee.

 

“[**]” means a product that: (a) [**];
(b) [**]; and (c) includes all software, hardware and other networked
components required to achieve (a) and (b).

 

“Default Budget” shall have the meaning described in Section 7.03 hereof.

 

“Delaware Act”
shall mean the Delaware Limited Liability Company Act, 6 Del. C. §18-101, et
seq., as amended from time to time.

 

“Digimarc” shall have the meaning set forth
in the opening paragraph of the Agreement.

 

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

 

2

 

“Digimarc Licensed IP” shall mean the
Digimarc Licensed Patents and the Digimarc technology as reasonably required
for the commercialization, development and marketing by Company of Company
Products within the scope of the Business.

 

“Digimarc
Licensed Patents” shall mean all patents (including extensions, reissues,
re-examinations, substitutions, renewals or equivalents of any of the
foregoing, and moral and economic rights of inventors in any of the foregoing),
other than the Excluded Patents, throughout the world, including industrial and
utility models, industrial designs, typeface design patents and registrations,
petty patents, patents of importation, patents of addition, certificates of
invention, and any other indicia of invention ownership issued or granted by
any governmental agency or other authority:

 

(a) issued
or issuing on patent applications (including all provisional applications,
priority, continuations, divisionals, continuations-in-part and counterparts
thereof); and

 

(b) under
which patents or the patent applications therefor Digimarc or any of its
Affiliates has as of the Effective Date, or thereafter obtains, the right to a
grant license to the Company within the scope granted herein, without such
grant or the exercise of rights thereunder resulting in the payment of
royalties or other consideration by Digimarc or any of its Affiliates to third
parties (except for payments among Digimarc and its Affiliates and payments to
third parties for inventions made by said third parties while employed by
Digimarc or any of its Affiliates).

 

Digimarc
Licensed Patents shall include (other than the Excluded Patents) all patent
applications throughout the world (including all provisional applications,
priority, continuations, divisionals, continuations-in-part and counterparts
thereof) that satisfy part (b) of this definition, and all patents issuing
therefrom (including extensions, reissues, re-examinations, substitutions,
renewals or equivalents of any of the foregoing), and moral and economic rights
of inventors in any of the foregoing.

 

“Digimarc
Products and Services” means those products and services described in the Form 10-K
filed by Digimarc with the U.S. Securities and Exchange Commission (“SEC”) most
recently prior to the Effective Date.

 

“Effective Date” of this Agreement is July 1,
2009.

 

“Excluded Patents” shall mean those Digimarc
patents listed in Schedule 5.02 attached hereto.

 

“Excluded Scope” shall have the meaning set
forth in Section 2.03 hereof.

 

“Financial Statements” shall mean a balance sheet of the Company and related statements of
operations and cash flows, as of
the end of each month, quarter or year, as the case may be, and for the
corresponding period then ended.

 

“Force Majeure” shall mean any event or condition, not existing as of the Effective
Date, not reasonably foreseeable as of such date and not reasonably within the control 

 

3

 

of
either Member, which prevents, in whole or in material part, the performance by
a Member of its obligations under this Agreement, other than an obligation on
the part of a Member to make any payment hereunder.  Without limiting the generality of the
foregoing, the following shall constitute events or conditions of Force
Majeure: state or governmental action, riots, war, acts of terrorism, sabotage,
strikes, lock-outs, prolonged shortage of energy or other supplies, fire,
flood, hurricanes, earthquakes, lightning, and explosion.

 

“GAAP”
shall mean U.S. generally accepted accounting principles.

 

“Indebtedness” shall mean (a) indebtedness for borrowed money, (b) obligations
(as lessee or guarantor) to pay rent under a lease of real or personal property which is required by GAAP to be
capitalized on a balance sheet of the Company prepared in accordance with the
provisions of this Agreement, (c) purchase money obligations, and (d) any
extension, refinancing or modification of any of the foregoing.

 

“Interest” means
the limited liability company interest of a Member in the Company at any
particular time, including the right of such Member to any and all benefits to
which a Member may be entitled as provided in this Agreement, together with the
obligations of such Member to comply with all the terms and provisions of this
Agreement.

 

“IRS” shall
have the meaning described in Section 6.09(a) hereof.

 

“Judicial Review” shall have the meaning described in Section 6.06(b)(i) hereof.

 

“Law” means any
statute, law, regulation, ordinance, rule, injunction, order, decree, directive
or any similar form of decision of, or determination by, any governmental or
self-regulatory authority.

 

“Management” shall mean the President and other officers of the Company appointed in
accordance with the provisions
of Section 4.02 hereof.

 

“[**]” means Nielsen Products and Services involving
[**].

 

“Members” means Digimarc and Nielsen and any
other Person added as a member of the Company from time to time.

 

“Members’ Committee” shall mean that Committee
which is created according to the provisions of Section 4.01 hereof.

 

“Nielsen Data
License” means Nielsen’s then standard form of
license agreement for any Nielsen Data Services provided to the Company during
the Term, provided that there shall be no payment by the Company to Nielsen in
connection therewith.  The current
version of such license is attached hereto in Schedule 5.03.

 

“Nielsen Data
Services” means Nielsen Syndicated
Research and back-office meta-data [**] pursuant to a Nielsen
Data License.

 

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

 

4

 

 

“Nielsen Licensed IP” means the Nielsen
Licensed Patents and the Nielsen technology as reasonably required for the
commercialization, development and marketing by Company of Company Products
within the scope of the Business.

 

“Nielsen
Licensed Patents” shall mean all patents (including extensions, reissues,
re-examinations, substitutions, renewals or equivalents of any of the
foregoing, and moral and economic rights of inventors in any of the foregoing)
throughout the world, including industrial and utility models, industrial
designs, typeface design patents and registrations, petty patents, patents of
importation, patents of addition, certificates of invention, and any other
indicia of invention ownership issued or granted by any governmental agency or
other authority:

 

(a) 
issued or issuing on patent applications (including all provisional
applications, priority, continuations, divisionals, continuations-in-part and
counterparts thereof); and

 

(b)   under which patents or the applications
therefor Nielsen or any of its Affiliates has as of the Effective Date, or
thereafter obtains, the right to grant a license to the Company within the
scope granted herein, without such grant or the exercise of rights thereunder
resulting in the payment of royalties or other consideration by Nielsen or its
Affiliates to third parties (except for payments among Nielsen and its
Affiliates, and payments to third parties for inventions made by said third
parties while employed by Nielsen or any of its Affiliates).

 

Nielsen Licensed Patents shall
include all patent applications throughout the world (including all provisional
applications, priority, continuations, divisionals, continuations-in-part and
counterparts thereof) that satisfy part (b) of this definition, and all
patents issuing therefrom (including extensions, reissues, re-examinations,
substitutions, renewals or equivalents of any of the foregoing), and moral and
economic rights of inventors in any of the foregoing.

 

“Nielsen Products and Services” means those
products and services [**].

 

“Nielsen
Syndicated Research” means Syndicated published data/reports including
access to and use of Nielsen’s market intelligence information and reports (and
data underlying reports), in any format then-currently available.

 

“Percentage Interest” shall mean a Member’s
Interest in the Company expressed as a percentage of all Interests.  The initial Percentage Interests shall be
forty-nine percent (49%) for Digimarc and fifty-one percent (51%) for Nielsen.

 

“Person” shall mean any natural person, firm,
corporation, limited liability company, partnership, association, trust or
similar organization or governmental body.

 

“President” shall mean the president of the Company appointed in accordance with the provisions of Section 4.02 hereof.

 

“Representative” shall mean an individual appointed by a Member to the Members’ Committee.

 

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

 

5

 

“Sale”, “Sell”, “Offer for Sale”,
“Other Transfer”, “Otherwise Transfer” and other forms of such
terms with respect to copyrightable materials, such as software products, mean
the granting of licenses to use copyrightable materials.

 

“Subsidiary” of a Person shall mean any corporation, partnership or other
entity (“Entity”) in which a party now or hereafter holds, directly or
indirectly, ownership of, or the right to vote on behalf of, more than fifty
percent (50%) of its voting stock or other voting equity interests, for so long
as such ownership or right to vote exists.

 

“Syndicated”
means a report or information that is created for more than one unique client.

 

“Tax Matters Member”
shall have the meaning described in Section 6.06(a) hereof.

 

“Treasury Regulations” shall mean the income
tax regulations, including temporary regulations, promulgated under the Code,
as such regulations may be amended from time to time (including corresponding
provisions of succeeding regulations).

 

ARTICLE
II  

BUSINESS PURPOSE AND ACTIVITIES

 

2.01.                        Place of
Business

 

The principal place of business of the Company shall
be New York, New York.  At any time, the
Members’ Committee may change the location of the Company’s principal place of
business to another location by mutual agreement.

 

2.02.                        Nature of
Business

 

The
Company business shall be to develop and market Company Products outside the
Excluded Scope in the following areas and any others the parties may agree (the
“Business”):

 

(a)  [**].   The Company will develop and market [**] as
directed by the Members’ Committee.  For
the avoidance of doubt, [**] for [**] is not within the scope of the Company
Business and is within the Excluded Scope. 
All other aspects of [**] are within the scope of the Company Business.

 

(b) 
Other Company Products.  The Company
may develop or market other products or services that utilize Digimarc Licensed
IP and Nielsen Licensed IP outside the Excluded Scope, as from time to time
agreed by the Members Committee and incorporated in the Company’s annual plan
and budget.

 

(c)  No Obligation to Proceed.  Neither the Company nor Nielsen nor Digimarc
shall be obligated to develop any product referenced in Section 2.02.

 

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

 

6

 

2.03         Excluded
Scope

 

(a) 
The Company shall not use, make, have made, develop, market, offer for sale,
sell, lease, import, license or otherwise transfer:  (i) any Company Product that competes
with Digimarc Products and Services, Nielsen Products and Services or the
products or services of “Newco 1, LLC”; or (ii) any Digimarc Licensed IP
or Nielsen License IP on a “stand-alone basis,” i.e., in the form of a “naked”
resale/license that is not materially embodied in a Company Product.

 

(b) 
Notwithstanding the forgoing, the Company shall not be prohibited from
providing [**] to a client in the context of a sales pitch for the Company’s
products or services or from reporting to a client about the [**] on behalf of
that client.

 

2.04.        Marketing
and Sales to Current Customers of Digimarc or Nielsen

 

For the purpose of coordinating mutual customer
relationships, the Company will [**],
as the case may be. 
[**].

 

ARTICLE
III  

FORMATION AND TERM

 

3.01.                        Formation

 

The Members hereby
form the Company as a limited liability
company  under and pursuant to the
provisions of the Delaware Act, and agree that the rights, duties and
liabilities of the Members shall be as provided in the Delaware Act, except as
otherwise provided in this Agreement. 
Upon the Effective Date of this Agreement, Nielsen and Digimarc shall be
admitted as Members.  The Members hereby
designate Robert P. Chamness to file the Certificate of Formation of the
Company.  The Members may jointly
describe any person as an authorized person, within the meaning of the Delaware
Act, to execute, deliver and file any amendments and/or restatements thereof
with the office of the Secretary of State of the State of Delaware pursuant to
the Delaware Act.

 

3.02.                        Members’ Interests

 

As of the date of
this Agreement, Nielsen shall own fifty-one percent (51%) of the Company
Interests and Digimarc shall own forty-nine percent (49%) of the Company
Interests.

 

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

 

7

 

3.03.                        Name

 

The name of the Company is “Newco 2, LLC”, and may be changed by the
consent of the Members.  The business of the Company may be
conducted under the name of the Company, or under any other name designated by
the Members’ Committee.  The Company
shall be described as a joint venture of Nielsen and Digimarc.

 

3.04.                        Term

 

The Company shall
commence as of the date of the filing of the Certificate.  The term of the Company shall continue for a
period of twenty-five (25) years from the date hereof, unless terminated
earlier in accordance with the provisions of Sections 9.01 hereof.  The existence of the Company as a separate
legal entity shall continue until the cancellation of the Certificate as
provided in the Delaware Act.

 

3.05.                        Registered
Agent and Office

 

The Company’s
registered agent and office in the State of Delaware shall be The Corporation
Trust Company, 1209 Orange Street, Wilmington, New Castle County, Delaware 01980.  At any time, the Members’ Committee may
mutually designate another registered agent or registered office.

 

3.06.                        Title to Assets

 

Except as
otherwise provided in this Agreement, all Assets shall be owned by the Company
as an entity, and no Member shall have any ownership interest in such Assets in
the Member’s individual name or right. 
The Company shall hold all Assets in the name of the Company.

 

ARTICLE
IV  

MANAGEMENT OF THE COMPANY

 

4.01.                        Members’
Committee

 

(a)   General.  A Members’ Committee shall supervise the
activities of the Company and will, among other things, (i) approve the
expenditure of funds for Company operations, on
a basis consistent with the requirements of the relevant Approved Budget of the
Company under Article VII hereof; (ii) approve the hiring and firing
of the President and other officers of the Company (subject to 4.02 a below); (iii) attempt
to resolve any and all disputes between the Members as to the Company’s
operations; (iv) attempt to resolve any and all disputes between the
Members concerning licensing or marketing rights issues which arise out of the
Company’s operations; and (v) consider and act upon all other material
matters which impact upon or affect the operation of the Company.  The authorization and approval of the Members’
Committee shall be a condition precedent to the taking of those actions set
forth in Section 4.03 hereof.  The
Members’ Committee shall also consider and act upon those other matters which
are contemplated by this Agreement as being subject to its consideration or
approval.  The Representatives of the
Members’ Committee shall act as representatives of the Members.

 

8

 

(b)   Members’ Committee.  Nielsen and Digimarc shall each appoint an
equal number of Representatives to the Members’ Committee.  Initially, each Member shall appoint two such
Representatives.  The names of each
Member’s designated Representatives on the Effective Date are set forth in
Schedule 4.01 to this Agreement. 
Subsequent appointments of Representatives to the Members’ Committee
will be made by written notice to the other Member and each such appointment
may be changed by reasonable advance written notice to the other
Member(s).  So long as Nielsen continues
to own at least 25% of the Company, the meetings of the Members’ Committee
shall be chaired by one of the Nielsen Representatives.  The Members’ Committee shall appoint one or
more secretaries to keep records of its meetings.  The Chief Financial Officers of Nielsen Product
and Digimarc may also attend the meetings of the Members’ Committee as
observers.

 

(c)   Meetings.  The Members’ Committee shall establish its
own schedule and location of regular meetings, which shall be held at least on
a calendar-quarterly basis.  Special
meetings of the Members’ Committee may be called by any two Representatives,
shall require no less than five (5) business days advance notice to the
other Member, unless waived, and shall be held at a mutually convenient
location; provided that in the absence of an agreement on such location,
the location will rotate between the head offices of each Member.  Any meeting of the Members’ Committee may be
conducted by telephone provided all Representatives wishing to participate are
able to listen and speak to one another while the meeting is being conducted.

 

(d)   One Vote Per Member/Dispute Resolution.  The Representatives of each Member shall each
have the right to one vote and all decisions shall be of the Members’ Committee
shall be by majority vote, except as set forth in Section 4.03 below.  The Chairman of the Members Committee shall
have the power to decide any non Section 4.03 matter for which a majority
vote has not been achieved.  With respect
to such Section 4.03 matters, in the event that at least three
Representatives of the Members’ Committee are unable to resolve an issue within
a reasonable time after it arises, either Member may refer the dispute to
non-binding mediation under the auspices of the American Arbitration
Association of Chicago, Illinois, and if still not resolved within ninety (90)
days after the commencement of such mediation, then either party may resort to
arbitration in accordance with, and subject to, the provisions of Section 12.09
hereof to resolve such dispute.

 

(e)   Decisions.  Valid decisions of the Members’ Committee may
be taken only at a meeting where both Representatives of each Member are
present, in person or by a duly executed proxy (whether in facsimile or other
written form) from the other Representatives of such Member and at least one
Representative of each Member is present in person or by phone.  Except in the case of previously scheduled
regular meetings, The Chairman of the Members Committee shall give the
Representatives at least five (5) business days’ written notice prior to
the meeting, unless waived.  Decisions
may also be made by the Members’ Committee, without a meeting being held, by
facsimile or other written instrument which is executed by all Representatives
of each Member.

 

(f)   Invitees.  The President and other Company officers and
employees of the Members may attend meetings of the Members’ Committee at the
invitation of any Representative.  Such
invitees shall not be Members of the Members’ Committee, nor shall they be
entitled to vote on matters which come before the Members’ Committee.  The Chairman of the Members’ Committee can
excuse such Invitees from the meeting at any time and for any

 

9

 

reason, and Invitees shall not
attend any portions of the meetings of the Members’ Committee designates as “Executive
Sessions”.

 

4.02.                        Management of
the Company

 

(a)   President.  The Company shall have a President who shall
report to the Members’ Committee and shall have, within the guidelines of the
Approved Business Plan and Approved Budget, overall responsibility for
management of the Company, including specific responsibility for staffing,
sales and other similar organizational and product issues.  The President shall not hire or terminate any
officer of the Company without the advance written approval of such action by
the Members’ Committee.  Any decision to
terminate the employment of the President or change the duties or
responsibilities of the President shall require the approval of the Members’
Committee.  Digimarc shall designate the
President, subject to Nielsen’s approval, which shall not be unreasonably
withheld.  The designee shall not have
previously been an employee of either Member.

 

(b)   Other Officers.  The Members’ Committee shall elect and
replace officers for such positions as the Members’ Committee may determine
from time to time, and such officers shall perform such duties and have such
powers as the Members’ Committee may then determine. The officers will manage
the day-to-day operations of the Company in a manner consistent with the
policies, procedures, budgets, plans and programs ordered or approved by the
Members’ Committee consistent with the provisions of this Agreement and the
Delaware Act.  Nielsen shall designate
the CFO of the Company, subject to Digimarc’s approval, which shall not be
unreasonably withheld.  The designee
shall not have previously been an employee of either Member.

 

(c)   Other Employees.  The Company shall be entitled to hire and
provide such other employees compensation and benefits as are, in each case, in
accordance with the Approved Business Plan and the Approved Budget or the
unanimous action of the Members’ Committee.

 

(d)   Legal Compliance.  The Company shall formulate such policies
and procedures as are required for the Company to comply with all laws,
regulations and requirements applicable to the Company or the Members,
including, without limitation, U.S. federal and state securities laws and the rules and
regulations of the SEC and stock exchanges. 
In the absence of such specific policies and procedures adopted by the
Company, the Members Committee shall determine which policies and procedures
shall apply to the Company’s governance and operations.

 

4.03.                        Prior Approval

 

No act shall be taken,
sum expended, decision made or obligation incurred by or on behalf of the
Company with respect to any matter described below unless such proposed action
shall have been approved by at least three Representatives of the Members’
Committee:

 

(a)           subject to Section 4.02 above, hiring or terminating
the President or other elected officers and fixing their compensation;

 

10

 

(b)           except for agreements in the ordinary course of  business, entering into, materially
modifying, renewing, terminating or canceling any license or other agreement
with any Person, other than Digimarc or Nielsen or their respective Affiliates,
relating to the Company’s intellectual property rights or proprietary data;

 

(c)           appointing independent auditors of the Company;

 

(d)           commencing or settling any lawsuit or claim involving the
Company (other than a collection action or payment dispute) involving amounts
above $100,000 or non-monetary relief;

 

(e)           adopting or implementing any plan of dissolution or
liquidation, except as provided in Article IX;

 

(f)            merging or consolidating with or into any Person, or
acquiring all or part of another business (whether by acquisition of stock or
assets or otherwise) or entering into a cooperative arrangement with another
party which is the functional equivalent thereof;

 

(g)           selling, encumbering, leasing, transferring or otherwise
disposing of, in whole or in part, any substantial amount of the Company’s
Assets, except in the ordinary course of business of the Company;

 

(h)           establishing or allowing to exist any Subsidiary of the
Company;

 

(i)            making any investment in, loan to or guaranty of any
obligations of any Person;

 

(j)            any issuance, transfer or other disposition by the
Company of any ownership interest therein or of any right to acquire any
ownership interest therein, except as set forth in Section 4.04;

 

(k)           incurring any indebtedness outside of the ordinary course
of business as provided in the Approved Budget and the Approved Business Plan
and changes thereto, except as set forth in Section 4.04;

 

(l)            admitting a new Member or creating a new class of
Members, except as expressly provided in Section 4.04;

 

(m)          effecting a bankruptcy, dissolution, liquidation or
reorganization of the Company, except as provided in Article IX;

 

(n)           approval of the Approved Budget and the Approved Business
Plan and changes thereto;

 

(o)           make a change in the nature of the Business, as defined in
section 2.02;  or approval of Other
Company Products as set forth in Section 2.02(d), other than Company
Products developed during the period when the Company continues to be funded by
the Members Initial Contributions; and

 

11

 

(p)           transactions with
any Member or any Affiliate of any Member.

 

4.04                           Additional
Funding

 

In
addition to the provisions set forth in Article VI, below, if at any time
the Annual Budget calls for expenditures that exceed the Company’s cash on
hand, either Member may call a meeting of the Members Committee to propose and
vote upon any of the following methods to fund or otherwise provide for the
Company’s continuing operations:

 

(i) Incurring indebtedness to a third party or
to one or both of the Members.  The
amount of such indebtedness shall be repaid prior to any distributions pursuant
to Section 6.03, unless the Members otherwise agree;

 

(ii) Admitting a new Member.   Any required adjustment to existing Members
Interest shall be shared equally between Nielsen and Digimarc.

 

ARTICLE
V  

RIGHTS TO PATENTS, DATA AND IMPROVEMENTS; ANCILLARY LICENSES

 

5.01                           Company Rights
to Developed Intellectual Property

 

(a)   Company shall own (and shall use commercially
reasonable efforts to ensure that it shall own) all right, title and interest
to all materials and intellectual property first conceived or developed in the
performance of work by or for Company (including that under any services
contract between either Member and the Company) within the field of the Company
Business (and for avoidance of doubt, in all events outside of the Excluded
Scope), whether conceived or first reduced to practice solely by Company or
jointly with one or more of the Members or third parties (“Company IP”),
subject to the license granted to Nielsen and Digimarc under
Section 5.01(b).

 

(b) 
Company agrees to grant and hereby grants a worldwide, non-exclusive, royalty
free, nontransferable, irrevocable right and license under all intellectual
property owned or licensable by the Company (including Company IP): (i) to
Digimarc and its Affiliates to make, have made, use, offer for sale, sell,
import, lease, license and otherwise transfer any product or service:   (x) within the field of Digimarc
Products and Services outside of the Company Business; and (y) upon the
dissolution of the Company under Article IX, within the field of the
Company Business; and (ii) to Nielsen and its Affiliates to make, have
made, use, offer for sale, sell, import, lease, license and otherwise transfer
any product or service:  (x) within
the field of Nielsen Products and Services outside of the Company Business (
including 

 

12

 

for
the avoidance of doubt, [**] for [**]); and (y) upon the dissolution of
the Company under Article IX, within the field of the Company Business; provided,
further, that in the case of developments that are derivatives of
underlying Digimarc Licensed IP or Nielsen Licensed IP licensed to the Company
by a party, such license granted under this Section is subject to each
party’s underlying rights.

 

5.02         Digimarc
License and Services

 

(a)  IP
License.   Subject to the terms and
conditions of this Agreement, Digimarc hereby grants to the Company, as of the
Effective Date, a worldwide, non-exclusive, royalty free, nontransferable,
irrevocable license under any and all Digimarc Licensed IP as reasonably
required for use by or for the Company in the manufacture (by or for),
development, marketing, offer for sale, sale, import, lease, license and other
transfer to Company customers of Company Products within the scope of the
Business.

 

(b) 
Previously Licensed Exclusive Grants. 
Notwithstanding the above, the license granted in Subsection (a) is
subject to previously licensed exclusive grants by Digimarc in the following
fields of use, which are not licensed to the Company:

 

(i)  domestic or
international: driver licenses, passports, national, federal, state or local
government identity cards and any other national, federal, state or local
government issued credentials;

 

(ii)  embedding watermarks in
[**] in the [**] for the purpose of [**]. 
For the avoidance of doubt, this does not include embedding watermarks
in [**]; and

 

(iii)  deterring the
unauthorized digital reproduction of banknotes.

 

(c)  No Implied Licenses. 
Nothing contained in this Agreement
will be construed as conferring by implication, estoppel or otherwise, any
license or other right under any patent rights or other industrial or
intellectual property rights of Digimarc, except for the license expressly
granted herein.

 

(d)  Services.   As more fully set forth in that certain
Service Agreement entered into simultaneously herewith and attached hereto as
Schedule 5.02 (d), Digimarc shall provide incidental management support at no
cost to the Company and will provide technical and development services within
the scope of the Business to the Company as the Members shall determine from
time to time.  In the event that Digimarc
is retained to provide services to Newco 2, LLC during the periods referenced
in Section 5.02 (d) of the Limited Liability Agreement of Newco 1,
LLC, the amounts paid by Newco 2, LLC shall be credited against the minimums
due under that agreement.

 

5.03.                        Nielsen
Licenses and Services

 

(a)  Nielsen Support and Data Services.  Nielsen shall provide incidental management
support at no cost to the Company and pursuant to the terms and conditions 

 

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

 

13

 

substantially as set forth
in the Nielsen Data License in Schedule 5.03, to the extent the provisions of
such form of license are not in conflict with the terms of this Agreement, it
will also irrevocably provide:

 

(i) Free access to and
use of any Nielsen Data Services as reasonably required for the development and
marketing of Company Products within the scope of the Business.  The Nielsen Data Services will be available
through the variety of means it is made available to Nielsen’s clients,
including desktop based (downloaded to a PC or sent via CD-ROM as delivered to
current Nielsen clients) or web based (Nielsen operates several web based
report platforms).  Free access by the
Company to Nielsen information assets (including Nielsen Data Services) will be
via all means accessible to any client. 
The free access to specific Nielsen Data Services will be as reasonably
required for the operation of any Company Product within the scope of the
Business, or for evaluation of any such Company Product, as determined by the
reasonable judgment of Company management; and

 

(ii) Free access to and use of Nielsen Data Services in the
formats that they exist in at the time of the delivery to the extent such
Nielsen Data Services are reasonably required for the development and marketing
of Company Products within the scope of the Business.

 

With
respect to the foregoing, the Company will be a client of Nielsen, but will
receive Nielsen Data Services at no cost. 
Non-syndicated custom formatted guides and reports shall not be Nielsen
Data Services, but may be provided to the Company upon request, at a reasonable
market price, or at such other price and on such terms as the parties agree.

 

(b)  No
Implied Licenses.  Nothing contained in this Agreement will be
construed as conferring by implication, estoppel or otherwise, any license or
other right under any patent rights or other industrial or intellectual
property rights of Nielsen, except for the license expressly granted herein.

 

(c)  IP License.  Subject to the terms and conditions of this
Agreement, Nielsen hereby grants to the Company, as of the Effective Date, a
worldwide, non-exclusive, royalty free, nontransferable, irrevocable license
under any and all Nielsen Licensed IP as reasonably required for use by or for
the Company in the manufacture (by or for), development, marketing, offer for
sale, sale, import, lease, license and other transfer to Company customers of
Company Products within the scope of the Business.

 

(d)  Services.   Nielsen will provide technical and
development services to the Company within the scope of the Business at rates
to be agreed upon between the Members, as and to the extent set forth in any
Annual Budget or as otherwise agreed pursuant to 4.03 (p).

 

5.04                           Ability to
Grant Licenses

 

For purposes of certainty,
nothing in this Agreement shall limit either Member from granting exclusive
licenses outside identified areas of the Company Business and initial 

 

14

 

business plan as set forth
in Section 2.02.  All later business opportunities for the Company
are subject to discussion and mutual agreement, including whether exclusivity
is commercially reasonable or appropriate.

 

5.05                           Transitional
Services; Real Estate

 

Any transitional,
ongoing, administrative or other services and real estate arrangements of the
Company shall be provided in accordance with
the Approved Business Plan and the Approved Budget.

 

5.06.                        Company License
and Services

 

(a)  Company Data
Services.  Pursuant to the terms set
forth in the Company Data License, the Company will irrevocably provide to
Nielsen:

 

(i) Free access to and
use of any Company Data Services as reasonably required for the development and
marketing of Nielsen Products and Services. 
Free access by Nielsen to the Company information assets (including
Company Data Services) will be via all means accessible to any client.  The free access to specific Company Data
Services will be as reasonably required for the operation of any Nielsen
Products and Services; and

 

(ii) Free access to and use of Company Data Services in the
formats that they exist in at the time of the delivery.

 

With
respect to the foregoing, Nielsen will be a client of the Company, but will
receive Company Data Services at no cost.

 

(b)  Marketing.  Nielsen may market [**] products on terms to
be agreed upon by the Members.

 

ARTICLE
VI  

FUNDING, ALLOCATIONS, DISTRIBUTIONS AND CAPITAL ACCOUNTS

 

6.01.                        Funding;
Capital Contributions

 

(a)   The Initial Capital Contribution of each
Member shall be an aggregate of $2,800,000 in quarterly installments as
follows:

 

	
  Date

  	
   

  	
  Amount

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  July 1, 2009

  	
   

  	
  $

  	
  200,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  October 1, 2009

  	
   

  	
  $

  	
  200,000

  	
   

  

 

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

 

15

 

	
  January 1,
  2010

  	
   

  	
  $

  	
  300,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  April 1,
  2010

  	
   

  	
  $

  	
  300,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  July 1,
  2010

  	
   

  	
  $

  	
  300,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  October 1,
  2010

  	
   

  	
  $

  	
  300,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  January 1,
  2011

  	
   

  	
  $

  	
  300,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  April 1,
  20211

  	
   

  	
  $

  	
  300,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  July 1,
  2011

  	
   

  	
  $

  	
  300,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  October 1, 2011

  	
   

  	
  $

  	
  300,000

  	
   

  

 

6.02.                        Fiscal Year

 

The fiscal year of
the Company shall be the calendar year.

 

6.03.                        Distributions
to the Members

 

The
Company shall distribute to the Members any of the Company’s cash which, in the
judgment of the Members’ Committee, exceeds the minimum cash requirements of
the business for a reasonable period of time. 
Such excess cash distributions shall be allocated between the Members in
accordance with their Percentage Interests.

 

(a)   Capital Accounts.  The Company shall maintain a capital account
for each Member in accordance with Treas. Regs. § 1.704-1(b)(2)(iv) and
administrative guidance issued with respect thereto (each such account as so
maintained, a “Capital Account”).  The
provisions of this Agreement relating to Capital Accounts are intended to
comply with such provisions and related provisions issued with respect to
section 704 of the Code and shall be interpreted consistently therewith.  The Company shall have the authority to make
such adjustments to the Members’ Capital Accounts as may be required to cause
the allocations made by the Company to comply with such provisions.

 

(b)   Adjustments to Capital Accounts.  At least once each taxable year of the
Company for United States tax purposes (as determined under Code section 706, a
“Fiscal Year”), after adjusting each Member’s Capital Account for all
contributions and distributions with respect to such Fiscal Year, the Company
shall allocate all profits and losses and items thereof in the following order
of priority: (A) First, (1) allocations of nonrecourse deductions
shall be allocated among the Members pro
rata in proportion to their Percentage Interests under Treas. Regs.
§ 1.704-2, including, without limitation, Treas. Regs. §§ 1.704-2(e) and
1.704-2(j)(1), (2) allocations of partner nonrecourse deductions
attributable to a particular partner nonrecourse liability shall be allocated
to the Member who has the economic risk of loss for that liability to the
extent required under Treas. Regs. §§ 1.704-2(i) and 1.704-2(j)(1), (3) allocations
of income and gain shall be made to Members whose share of partnership minimum
gain is reduced to the extent required under Treas. Regs. §§ 1.704-2(f) and
1.704-1(j)(2), (4) allocations of income and gain shall be made to Members
whose share of partner nonrecourse debt 

 

16

 

minimum
gain is reduced to the extent required under Treas. Regs. §§ 1.704-2(i)(4) and
1.704-1(j)(2), and (5) a Member who unexpectedly receives an adjustment,
allocation, or distribution described in Treas. Regs. § 1.704-1(b)(2)(ii)(d)(4), (5), or (6) shall be allocated items of income and gain
(consisting of a pro rata portion of each item of partnership income, including
gross income, and gain for such year) in an amount and manner sufficient to
eliminate such deficit balance as quickly as possible; and (B) all
remaining profits and losses and items thereof shall be allocated to the
Members’ Capital Accounts in a manner such that, after such allocations have
been made, the balance of each Member’s Capital Account (which may be a
positive, negative, or zero balance) shall equal (1) the amount that would
be distributed to such Member, determined as if the Company were to sell all of
its assets for the section 704(b) Book Value (as defined below) thereof
and distribute the proceeds thereof (net of any sales commissions and other
similar transaction fees and payments required to be made to creditors) pursuant
to the relevant legal documents setting forth such distributions, minus (2) the sum of (a) such
Member’s share of the “partnership minimum gain” (as determined under Treas.
Regs. §§ 1.704-2(d) and (g)) and “partner nonrecourse debt minimum gain”
(as determined under Treas. Regs. § 1.704-2(i)), and (b) the amount, if
any, that such Member is obligated (or is deemed for United States tax purposes
to be obligated) to contribute, in its capacity as a Member, to the capital of
the Company as of the last day of such Fiscal Year.  Notwithstanding the preceding provisions of
this paragraph, all allocations of gain or loss recognized for Capital
Accounting purposes in connection with property contributed by a Member to the
Company that, on liquidation of the Company would be distributed to that
Member, shall be specially allocated to that Member.

 

(c)   Code Section 704(c)(1)(A).  Except as provided in the
following provisions of this Section 3, each item of taxable income, gain,
loss, deduction, or credit shall be allocated in the same manner as its
correlative item of “book” items allocated pursuant to Section 2.  In accordance with Code Section 704(c)(1)(A) (and
the principles thereof) and Treas. Regs. § 1.704-3, income, gain, loss and
deduction with respect to any property contributed to the capital of the
Company, or after Company property has been revalued under Treas. Regs. §
1.704-1(b)(2)(iv)(f), shall, solely for United
States federal, state and local tax purposes, be allocated among the Members so
as to take into account any variation between the adjusted basis of such
Company property to the Company for United States federal income tax purposes
and its value as so determined at the time of the contribution or revaluation
of Company property.  This Paragraph
shall be construed to authorize the Company to utilize only the “traditional
method”  described in Treas. Regs. §
1.704-3(b) unless all Members agree otherwise.  Any elections or other decisions relating to
such allocations shall be made by the Company. 
Allocations pursuant to this Paragraph are solely for United States tax
purposes and shall not affect, or in any way be taken into account in
computing, any Member’s Capital Account or share of profit, loss, or other
items, pursuant to any provision of this Agreement or otherwise affect the
Members’ rights (including, without limitation, rights to distributions) and
obligations with respect to the Company.

 

(d)   Certain Definitions. For purposes
of this Agreement: (A) the term “section 704(b) Book Value” means,
with respect to any Company property, the Company’s adjusted basis for United
States tax purposes, adjusted from time to time to reflect the adjustments
required or permitted by Treas. Regs. §§ 1.704-1(b)(2)(iv)(d) through (g), provided
that on the date of the contribution of an asset to the Company, the section
704(b) Book Value of any asset contributed to the Company shall be equal
to the fair market value (as reasonably determined by the Parties) of such
asset on the date of such contribution, (B) the term “Treas. Regs.” means 

 

17

 

Treasury
Regulations issued under the Code, and (C) the term “profits and losses”
shall mean the items of profit and loss of the Company (including separately
stated items) as computed under Treas. Regs. § 1.704-1(b)(2)(iv).

 

6.04.                        Certain Other
Allocation Rules

 

(a)   For purposes of determining the Profits,
Losses, or any other items allocable to any period, Profits, Losses, and any
such other items shall be determined on a daily, monthly or other basis, as
determined by Members’ Committee using any permissible method under Section 706
of the Code and the Treasury Regulations thereunder.

 

(b)   Except as otherwise provided in this
Agreement, all items of Company income, gain, loss, deduction, and credit, for
any fiscal year or other period, and any other allocations not otherwise
provided for shall be divided among the Members in the same proportions as they
share Profits or Losses, as the case may be, for such year or other period.

 

(c)   All items of income, gain, loss, deduction
and credits recognized by the Company for federal income tax purposes and
allocated to the Members in accordance with the provisions hereof and all basis
allocations to the Members shall be determined without regard to any election
under section 754 of the Code that may be made by the Company; provided,
however, such allocations, once made, shall be adjusted as necessary or
appropriate to take into account the adjustments permitted by sections 734 and
743 of the Code.

 

6.05                           Additional
Capital Contributions

 

If
and when the Company has used all of the Initial Capital Contribution, the
Members Committee may determine that the Company requires additional capital to
expand the Business.  The Members Committee
shall notify the Members of the required amount and each Member may, but shall
not be required to, make a capital contribution in an amount equal to their
Percent Interest portion of such required capital.

 

6.06                           Member’s
Failure To Make Capital Contributions

 

In
case either Member (the “Non-Contributing Member”) elects not to make such a
capital contribution, then the other Member (the “Other Member”) may elect to
exercise one or more of the provisions set forth below.

 

(a)           The Other Member may withdraw its
additional capital contribution in an amount comparable to that which the
Noncontributing Member failed to make.

 

(b)           The Other Member may advance for its
own Capital Account (in addition to its pro-rata share of the additional
capital contribution), the additional capital contribution requested from the
Noncontributing Member.  Thereafter
allocations of excess cash distributions, net profits, and net losses, as well
as distributions of the Assets and properties of the Company upon termination
of this Agreement shall be made to each Member accordance with revised
Percentage Interests determined in accordance with aggregate capital
contributions made to the Company ignoring any prior return of Initial Capital
Contributions or Additional Capital Contributions.

 

18

 

6.07         Accounting Procedures

 

(a) Accounting
Principles.  The books of account of
the Company shall be kept and maintained at the principal place of business of
the Company, or at such other place or places as shall be determined by the
Members’ Committee.  The books of account
and the Financial Statements of the Company shall be prepared in accordance
with GAAP, consistently applied, which shall be utilized in the preparation of
the books of account and Financial Statements of the Company.

 

(b) Financial
Statements.  The Company shall cause
Financial Statements to be prepared and furnished to each of the Members, as
soon as is practicable after the end of each month, quarter and year, as the
case may be, but in no event later than twelve (12) working days after the end
of each month or quarter or twenty-five (25) working days after the end of a
year.  The Financial Statements shall be
prepared in accordance with Section 6.05 (a) hereof, and shall be
accompanied by:

 

(i)   a certificate signed by the president of the Company and the
principal financial employee of the company to the effect that the unaudited
consolidated financial statements reflect all adjustments necessary to present
fairly the financial position, results of operations and cash flows, in the
case of Financial Statements relating to any month, or to any of the first
three fiscal quarters of each year, or to any full fiscal year for which
audited Financial Statements are not requested by either Member pursuant to
clause (ii) below; and

 

(ii)    an independent auditor’s report prepared by a firm of independent
certified public accountants approved by the Members’ Committee, in the case of
Financial Statements relating to a full fiscal year, if so requested by either
Member.  The date that such certification
shall be due will be prior to any SEC regulatory filing dates for Digimarc and
shall be completed simultaneously with the audit of Digimarc to take advantage
of any efficiencies and synergies in preparing for and completing such audits.

 

The president of the Company
and the principal financial employee of the Company responsible for providing
accounting services to the Company shall also provide each Member and the
Members’ Committee with such other reports relating to the operations of the
Company as it may from time to time request. Any audit under subparagraph (i) or
(ii) hereof shall be at the Company’s expense.

 

6.08         Principle Tax Matters

 

(a)The
Members Committee shall designate  the “tax
matters partner” of the Company for United States federal income tax purposes (the “Tax Matters Member”).  Pursuant to Section 6223(c) of the
Code, upon receipt of notice from the Internal Revenue Service (the “IRS”)
of the beginning of an administrative proceeding with respect to the Company,
the Tax Matters Member shall furnish the IRS with the name, address and profit
interest of each of the Members provided, however, that such
information is provided to the Tax Matters Member by the Members.

 

(b) The
Tax Matters Member shall, with the prior approval of the Members’ Committee, be
permitted to:

 

19

 

(i) enter
into any settlement with the IRS with respect to any administrative or judicial
proceedings for the adjustment of the Company items required to be taken into
account by a Member for income tax purposes (such administrative proceedings
being referred to as a “Tax Audit” and such judicial proceedings being
referred to as “Judicial Review”);

 

(ii) in
the event that a notice of a final administrative adjustment at the Company
level of any item required to be taken into account by a Member for tax
purposes (a “Final Adjustment”) is mailed to the Tax Matters Member,
seek Judicial Review of such Final Adjustment, including the filing of a
petition for readjustment with the Tax Court or the United States Claims Court,
or the filing of a complaint for refund with the District Court of the United
States for the district in which the Company’s principal place of business is
located;

 

(iii)   file a request for an administrative adjustment with the IRS at
any time and, if any part of such request is not allowed by the IRS, to file an
appropriate pleading (petition or complaint) for Judicial Review with respect
to such request;

 

(iv)   enter into an agreement with the IRS to extend the period for
assessing any tax which is attributable to any item required to be taken into
account by a Member for tax purposes, or an item affected by such item; and

 

(v)    take any other action on behalf of the Members in connection with
any Tax Audit or Judicial Review proceeding.

 

The Tax Matters Member shall consult with the other
Member (that is not the Tax Matters Member) and receive the other Member’s
written approval before taking any action pursuant to this Section 6.06(b) and
show the other Member the relevant paperwork that such Member requests
associated with such action.  In the case of a disagreement
between the Tax Matters Member and the other Member, an accounting firm to be selected by the Members’ Committee will
resolve such disputes.

 

The Tax Matters Member shall receive no compensation
for its services. All third party costs and expenses incurred by the Tax
Matters Member in performing its duties as such (including legal and accounting
fees and any out-of-pocket expenses) shall be borne by the Company. Nothing
herein shall be construed to restrict the Company from engaging an accounting
firm or other experts or consultants to assist the Tax Matters Member in
discharging its duties hereunder, so long as the compensation paid by the
Company for such services is reasonable.

 

(c) Unless
the Members shall determine that other methods of allocations are required by
the Code or applicable Treasury Regulations, each item of income, gain, loss
and credit of the Company shall be allocated between the Members in accordance
with their Percentage Interests for the fiscal year (or portion thereof) to
which the item relates.

 

6.09         Payment
and Withholding of Certain Taxes

 

(a) 
The Company may withhold taxes from distributions to any Member, or otherwise
pay taxes on a Member’s allocable share of Company items of income and gain, to
the extent permitted by Section 6.12(b) below.  For purposes of this Agreement, any amount of
taxes

 

20

 

so paid or withheld with respect
to any Member shall be deemed to be a distribution to such Member and shall
reduce the applicable amount otherwise distributable to such Member and, as
necessary, the next distributions to be made to that Member, pursuant to this
Agreement.

 

(b) 
Notwithstanding anything to the contrary herein, to the extent that the Company
is required, pursuant to any applicable law, (i) to pay tax (including
estimated tax) on a Member’s allocable share of Company items of income or
gain, whether or not distributed, or (ii) to withhold and pay over to the
tax authorities any portion of a distribution otherwise distributable to a
Member, the Company may withhold and pay over such tax or such withheld amount
to the tax authorities, and such amount shall be treated as a distribution to
such Member at the time it is paid to the tax authorities.

 

6. 10        Organizational
Expenses

 

The Company shall
elect to deduct expenses, if any, incurred by it in organizing the Company
ratably over a 180-month  period as
provided in Section 709 of the Code and the regulations promulgated
thereunder.

 

6.11         Classification

 

The Company will
file information returns in a manner consistent with treatment of the Company
as a partnership for United States federal income tax purposes and will not
elect to be treated as a corporation for United States federal income tax
purposes.

 

21

 

ARTICLE
VII  

BUDGETS AND
BUSINESS PLANS

 

7.01.                        Business Plans
and Budgets

 

(a)   Prior to the 15th of November of
each year, commencing in November, 2009, the President, on behalf of the
Company, shall submit to the Members’ Committee for its review and comment a
preliminary two-year combined business plan commencing with the following year,
which is proposed for the Company. Within ten (10) business days thereof,
the Members’ Committee shall provide its response to the President and a final
business plan shall be submitted by December 1st and approved by the Members’
Committee by January 1st of the following year.

 

(b)   On or before the 15th of November of
each year, commencing in November 2009, the Company shall submit to the
Members’ Committee for its review and comment a preliminary budget which is
proposed for the Company for the following two (2) years.  Within ten (10) business days thereof,
the Members’ Committee shall provide its response to the President and a final
budget for the following two (2) years shall be submitted by December 15th,
and approved by the Members’ Committee by January 1st of the following
year. Approval by the Members’ Committee

 

7.02.                        Approval by The
Members Committee

 

If approved by the
Members’ Committee in accordance with the terms of Section 7.01 hereof,
the proposed two-year business plan shall become the Approved Business Plan for
the applicable three-year (or shorter) period, and the proposed budget for the
following two (2) years shall become the Approved Budget for the
applicable two (2) year (or shorter) period under Section 7.01(b) hereof.

 

7.03                           Default Budget

 

In the event that
the Members’ Committee fails to approve a budget for any two (2) year
period pursuant to Sections 7.01 and 7.02 hereof, then the Approved Budget for
the next ensuing year shall be the budget for the second year of the two (2) year
period as was contemplated within the then effective Approved Budget (for the
avoidance of doubt, 2010 being the second year of the initial Approved Budget)
and if the two (2) year period covered by the most recent Approved Budget
expires and no further budget is approved by the Members’ Committee, there
shall be a Default Budget (as defined below) for the next ensuing year.  The default budget (a “Default Budget”)
shall be equal to the annualized operating expenditures of the Company for
the most recent three months.

 

7.04                           Default
Business Plan

 

In the event a
two-year business plan which is submitted to the Members’ Committee shall not
be adopted pursuant to Sections 7.01 and 7.02 hereof, the Approved Business
Plan which is then in effect shall continue to be the Approved Business Plan of
the Company, except that the projected budget contained therein for any
relevant year shall be deemed to have been superseded by the Approved Budget or
Default Budget, as applicable, for such year. 
If the most recent Approved Business Plan expires and no further
business plan is 

 

22

 

approved
by the Members’ Committee, then the Company shall continue operating on a basis
consistent with the last year of the most recent Approved Business Plan.

 

ARTICLE
VIII  

CERTAIN REPRESENTATIONS, WARRANTIES, AND COVENANTS

 

8.01.                        Authorization

 

Each Member represents and warrants to the other
Member that it has taken all action necessary for the authorization, execution,
delivery and performance by it of this Agreement, and that when this Agreement
is executed, it will constitute its valid and binding obligation in accordance
with its terms.  Each Member represents
and warrants it has all necessary corporate and other power with respect to the
foregoing.

 

8.02.                        Absence of
Conflict

 

Each Member
represents and warrants to the other Member that neither the execution,
delivery or performance of this Agreement, or any patent or other License
Agreements executed contemporaneously herewith, or any other Related Agreements
being executed and delivered simultaneously herewith to which it is a party,
nor the consummation of the transactions herein or therein contemplated, nor
the fulfillment of or compliance with the terms and conditions hereof or
thereof, will (nor with the giving of notice or lapse of time would) (a) conflict
with its Certificate of Incorporation, Bylaws or other instrument pursuant to
which it is organized, as amended or restated and as currently in effect or (b) result
in a breach of or constitute a default under or conflict with any material
contract, agreement or instrument to which it is a party or by which it or any
of its Assets are bound (including, without limitation, any agreements with any
banks or other lenders to which either Member or any of its Affiliates are a
party or subject), or (c) violate any law, rule or regulation
applicable to it or any of its Assets. 
Any third party, governmental or administrative consents or approvals
which are required in connection with the foregoing have been obtained and are
in full force and effect.

 

8.03.                        Certain
Covenants

 

Each
Member covenants and agrees to use commercially reasonable efforts to cause the
Company to abide by the provisions of Section 2.03 and 4.03 hereof.

 

8.04.                        Restricted
Transfer of the Company Interest

 

A Member may not,
without the prior written consent of the other Member, sell, assign, encumber
or otherwise transfer (directly or indirectly, through one or more
transactions, and whether voluntary, involuntary, by operation of law or
otherwise) its Interest in the Company or any part thereof to any Person.
Notwithstanding the previous sentence, either Member may transfer its Interest:
(i) by operation of law, pursuant to a merger, consolidation,
reorganization, statutory conversion, amalgamation or similar corporate
transaction; or (ii) in connection with a sale or other transfer of all or
substantially all of its assets or business; or (iii) 

 

23

 

upon
receiving the written consent of the other Member, which consent shall not be
unreasonably withheld, to an Affiliate which is wholly owned by, or which
wholly owns, such Member.  It shall be a
condition precedent to any transfer that the transferee agrees in writing to be
bound by the terms of this Agreement. 
Any transfer that is not made in strict compliance with the terms of
this Section 8.04 shall be null and void.

 

ARTICLE
IX  

DISSOLUTION

 

9.01.                        Dissolution

 

(a)   Dissolution by Mutual Agreement.  The Members may dissolve the Company at any
time by execution of a written agreement signed by a duly authorized officer of
each Member stating that the Members wish to terminate this Agreement and
setting forth terms for the disposition or allocation of the assets,
liabilities and rights and obligations of the Company.

 

(b)   Dissolution By Either Member.  Either Member shall have the right to
initiate proceedings to dissolve the Company if:

 

(i)  the other party fails to make
the Initial Capital Contribution; or

 

(ii) 
the Company fails to have sufficient cash to meet its financial obligations as
they become due in the ordinary course; provided, that the Member initiating
such proceedings must be in compliance with its obligation to make its Initial
Capital Contribution and any other Capital Contribution agreed to by the
Members; or

 

(iii)  the Company is in material breach of the
provisions of 2.03 or 4.03 hereof, and has not cured the material breach in a
reasonable time after receipt of notice by the Member initiating such
proceedings; or

 

(iv)  by the later of December 31
2013 or [**] years following the [**], the Company is no longer solvent or is
not generating at least [**] dollars of annualized revenues from unrelated
entities.

 

9.02.                        Liquidation

 

(a)           Upon the dissolution of the Company,
the Members’ Committee shall seek to resolve all issues of ownership,
separation and distribution of Company assets, to make settlement and payment
of all Company obligations, and to wind up and liquidate the affairs of the
Company in an orderly and businesslike manner. 
If the Members’ Committee cannot reach such an agreement, they shall
appoint a Person to act as liquidator to wind up the Company.  The liquidator shall have full power and
authority to sell, assign, and encumber any or all of the Company’s assets and
to wind up and liquidate the affairs of the Company in an orderly and
businesslike manner.  All proceeds from
liquidation and any remaining funds or assets of the Company shall be
distributed in the following order of priority: 
(i) to the payment of debts and

 

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

 

24

 

liabilities
of the Company (including, to the extent permitted by the Act, debts of the
Company that are owed to a Member) and the expenses of liquidation; (ii) to
the setting up of such reserves (including, cash escrow accounts) as the
liquidator may reasonably deem necessary for any contingent liabilities of the
Company; and (iii) by distribution of cash or property (at the election of
each Member), to the Members in accordance with their Percentage Interests.

 

(b)           If a Member elects to take its
distribution in cash, and sufficient cash is not available to make the full
cash distribution to each Member, the liquidator shall sell at fair market
value Company property as necessary to make such distribution in cash.  The other Members may purchase the property
sold at its fair market value.

 

(c)           The distribution of cash or property
to the Members in accordance with the provisions of this Section 9.02
shall constitute a complete return to the Members of their respective Capital
Contributions and a complete distribution to the Members of their respective
Interests and all Company property.  In
the event that any Member’s Capital Account balance is a negative amount after
all allocations to such account in accordance with Article VI and
distributions in accordance with Section 9.02(a), such Member shall have
no obligation to contribute any amount to the Company as a result of such
negative Capital Account; provided, however, that this provision shall not
override any obligation of a Member to make a Capital Contribution under Section 6.01.

 

(d)           Any distributions to the Members
pursuant to this Section 9.02 shall be made in accordance with the time
requirements set forth in Treasury Regulation section 1.704-1(b)(2)(ii)(b)(2).

 

ARTICLE
X  

FORCE MAJEURE

 

A Member whose performance hereunder is prevented by
an event or condition of Force Majeure, upon providing written notice to the
other Member of such event or condition, shall be excused from performance to
the extent such event or condition prevents its performance, provided
that the Member so affected shall use reasonable efforts to avoid or remove the
cause of nonperformance and shall continue performance hereunder immediately
upon the removal of such causes.

 

25

 

ARTICLE
XI  

LIABILITY AND INSURANCE

 

11.01.                  Liability

 

To the fullest extent permitted by law, the debts, obligations and
liabilities of the Company, whether arising in contract, tort or otherwise,
shall be solely the debts, obligations and liabilities of the Company, and no
Member shall be obligated personally for any such debt, obligation or liability
of the Company solely by reason of being a Member.

 

11.02.                  Insurance

 

The Company shall
purchase and maintain directors’ and officers’ errors and omissions insurance,
to the extent and in such amounts as the Members’ Committee shall, in its
discretion, deem reasonable.

 

ARTICLE
XII  

GENERAL PROVISIONS

 

12.01.                  No Publicity or
Advertisement Without Prior Consultation

 

Except after
consultation with the other parties to this Agreement, none of the Members or
the Company shall, and each of the parties shall use its reasonable efforts to
assure that none of its officers, directors, employees, agents or advisors
shall, publicize, advertise, announce or describe to any governmental entity or
other third person the terms of this Agreement, the parties hereto or the
transactions contemplated hereby, except as it believes in good faith to be
required by applicable law, regulation, or stock market rules or as
permitted pursuant to this Agreement.

 

12.02.                  Severability

 

Any portion or
provision of this Agreement which is invalid, illegal or unenforceable in any
jurisdiction shall, as to that jurisdiction, be ineffective to the extent of
such invalidity, illegality or unenforceability, without affecting in any way
the remaining portions or provisions hereof in such jurisdiction or, to the
extent permitted by law, rendering that or any other portion or provision
hereof invalid, illegal or unenforceable in any other jurisdiction.

 

12.03.                  Article and
Section Headings, Schedules and Exhibits

 

The Article and
Section headings included in this Agreement are for the convenience of the
parties only and shall not affect the construction or interpretation of this
Agreement.  Schedules and Exhibits
referred to in this Agreement are an integral part of this Agreement.

 

12.04.                  Counterparts

 

This Agreement and
any documents executed pursuant hereto may be executed in any number of
counterparts, each one of which shall be an original and all of which shall
constitute one and the same document.

 

26

 

12.05.                  Gender and Number

 

In this Agreement
(unless the context requires otherwise), the masculine, feminine and neuter
genders and the singular and the plural include one another.

 

12.06.                  Expenses

 

Unless otherwise
provided in this Agreement, the parties shall each bear their own fees and
expenses incurred in connection with this Agreement and the transactions
contemplated hereby (including without limitation all fees and expenses of
counsel).

 

12.07.                  Notices

 

All notices given
pursuant to this Agreement shall be in writing and be personally delivered or
mailed with postage prepaid, by registered or certified mail, return receipt
requested to the address set forth below or such other address as a party may
from time to time specify in writing to the other party.  If so mailed and also sent by telegram or
facsimile machine, the notice will conclusively be deemed to have been received
on the business day next occurring 48 hours after the latest to occur of such
mailing and telegraphic or facsimile communication; otherwise, no notice shall
be deemed given until it actually arrives at the address in question.  The addressees to which notices are initially
to be sent are as follows:

 

(a)   If to Digimarc:

 

Digimarc Corporation

9405 SW Gemini Drive

Beaverton, Oregon 97008 

Attention: Bruce Davis, CEO

with a copy to Robert Chamness, Chief Legal Officer and Secretary

Facsimile No.:  (503) 469-4771

 

If to Nielsen:

 

The Nielsen Company (US) LLC

770 Broadway

New York, NY 10003

Attention: Itzhak Fisher, Global Product Leadership

with a copy to the Chief Legal
Officer

Facsimile No.: (646) 654-8318

 

27

 

12.08.                  No Third Party Beneficiaries

 

No employee of the
Company (or his/her spouse or beneficiary), or any other Person not a party to
this Agreement, shall be entitled to assert any claim hereunder.  This Agreement shall be binding upon and
inure to the benefit only of the parties hereto and their respective
successors.  Notwithstanding any other
provisions to the contrary except with respect to such successors, it is not
intended and shall not be construed for the benefit of any third party or any
Person not a signatory hereto.  In no
event shall this Agreement constitute a third party beneficiary contract.

 

12.09.                  Governing Law; Arbitration

 

This Agreement is
governed by, and is to be construed and interpreted in accordance with, the law
of the State of Delaware, without giving effect to the conflict of law
principles thereof.  Any controversy or
claim arising out of or relating to this Agreement, or the breach thereof,
shall be settled by arbitration in New York, New York, in accordance with the
Commercial Arbitration Rules of the American Arbitration Association.  Unless otherwise agreed in writing by the
parties, the arbitration panel shall have no authority to amend or contravene
this Agreement, to expand or otherwise modify the scope of the Business of the
Company or to make any award or finding contrary to the provisions of an
applicable Approved Budget or Approved Business Plan.  The prevailing party in the arbitration shall
be entitled to recoup its reasonable attorneys fees from the other party as
part of any judgment entered. Judgment on the award may be entered in any court
having jurisdiction thereof.

 

12.10.                  Modifications, Amendments or
Waivers

 

Except as
otherwise provided herein, provisions of this Agreement may be modified,
amended or waived only by a written document specifically identifying this
Agreement and signed by a duly authorized executive officer of each Member.

 

12.11.                  Assignment, Successors and
Assigns

 

Except as set forth in Section 8.04 hereof,
without the other Member’s prior written consent, this Agreement and the rights
and obligations hereunder shall not be assignable by any Member.  This Agreement and the rights and obligations
hereunder shall be binding upon, and inure to the benefit of, the respective
successors and permitted assigns of the parties hereto.  Notwithstanding anything to the contrary in
this Agreement, in the event that either party assigns this Agreement and the
rights and obligations hereunder to an unrelated third party, such that the
assigning party ceases to function or exist as a separate business entity, the
rights and license granted to the Company under either Member’s Licensed
Patents in this Agreement shall include only those patents and patent
applications that were part of the definition of that Member’s Licensed Patents
prior to the date of such assignment and having an effective filing date prior
to the date of such assignment (including reissues, reexaminations,
continuations, divisionals, continuations-in-part, extensions,  substitutions, renewals, foreign counterparts
and equivalents thereof) and patents issuing therefrom and patents claiming
priority to such patents or patent applications having an effective filing date
prior to the date of such assignment. 
For the avoidance of doubt, no patents of any entity that 

 

28

 

acquires either Party after
the Effective Date are within the definition of Digimarc Licensed Patents or
Nielsen Licensed Patents.

 

12.12.                  Joint Preparation

 

This Agreement has
been jointly prepared by the Members and the provisions of this Agreement shall
not be construed more strictly against any Member as a result of its
participation in such preparation.

 

12.13.                  Entire Agreement;
Termination of Prior Agreement

 

This Agreement
(including the Schedules and Exhibits hereto) constitutes the entire agreement
of the Members with respect to the subject matter hereof and supersede all
prior written or oral and all contemporaneous oral agreements, understandings
and negotiations between the Members with respect to the subject matter hereof.

 

12.14.                  Further Assurances

 

Each Member shall fully and faithfully carry out all its respective
agreements and covenants expressly set forth in this Agreement.  Each of the Members agrees to execute,
acknowledge and deliver such additional documents and take such further
actions, as may reasonably be required from time to time to carry out each of
the provisions, and the intent, of this Agreement, and every agreement or
document relating hereto, or entered into in connection herewith.

 

12.15.                  Securities Disclosures and
Public Announcements

 

Disclosure of this
Agreement, the financial impact of this Agreement and related transactions on
the parties, and the terms and conditions of this Agreement (both in summary
form and through exhibit filings) may be required under SEC regulations, stock
market rules, or any other laws.  Members
may rely in good faith on advice of counsel when determining whether such
disclosure is required.  Except as
recited above and in Section 12.01, no Member will make public announcements nor issue press releases
relating to this Agreement without the prior written consent of the other
Member(s), which consent will not be unreasonably withheld.

 

12.16.                  Confidentiality

 

Subject
to Section 12.15, each party agrees that it will treat any provisions of
this Agreement not required to be publically disclosed as confidential and will
handle confidential information of the other party in a manner consistent with
the policies and practices of that party for handling its own confidential
information and in no case with less than a reasonable standard of care.  Notwithstanding the foregoing, either party
may provide a copy of this Agreement to a third party considering in good faith
a bona fide transaction as contemplated in Sections 8.04 or 12.11, provided
that such third party agrees in writing to be bound to a confidentiality
agreement customary to such transactions and prohibiting use of its knowledge
of this Agreement or its provisions for 

 

29

 

any competitive purpose.  If the entire Agreement is terminated, the obligations
set out in this Section will extend for a period of five (5) years
from this termination date.

 

12.17.                  Bankruptcy

 

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

 

12.18.                  Survival

 

Any
rights and obligations which by their nature (or explicit statement) survive
and continue after any expiration or termination of this Agreement will survive
and continue and will bind the parties and their successors and assigns, until
such obligations are fulfilled.  For
avoidance of doubt, upon expiration or termination of this Agreement, the
provisions of Sections 2.03, 2.04, 3.06, 5.01, 5.02, 5.03, 5.04, 8.04, 9.01,
12.07, 12.08, 12.09, 12.11, 12.16, and 12.17 will survive and remain in effect
until fulfilled.

 

30

 

IN
WITNESS WHEREOF, the members hereto have caused this Agreement to be executed
by their duly authorized representatives, effective as of the Effective Date.

 

	
   

  	
  DIGIMARC
  CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Bruce Davis

  
	
   

  	
   

  	
  Name:
  Bruce Davis

  
	
   

  	
   

  	
  Its:
  Chief Executive Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  THE
  NIELSEN COMPANY (US) LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Itzhak Fisher

  
	
   

  	
   

  	
  Name:
  Itzhak Fisher

  
	
   

  	
   

  	
  Its: Global Product Leadership

  

 

31

 

Schedule 4.01

 

Members’ Committee

 

Digimarc
Representatives:

 

1.
Bruce Davis

 

2.
Robert Chamness

 

Nielsen
Representatives:

 

1.
Itzhak Fisher

 

2.  Bruce Haymes

 

32

 

Schedule 5.02

 

Excluded Patents

 

	
  Patent No./Serial No.

  	
   

  	
  Title

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  USPN [**]

  	
   

  	
  [**]

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  USPN [**] (a continuation of USPN [**])

  	
   

  	
  [**]

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  USPN [**]

  	
   

  	
  [**]

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  USPN [**]

  	
   

  	
  [**]

  	
   

  

 

and any reissues, continuations, continuations-in-part,
divisionals, extensions, re-examinations, substitutions, renewals and foreign
counterparts and equivalents of those patents.

 

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

 

33

 

Schedule 5.02 (d)

 

Services Agreement

 

Unless otherwise determined by the Members’
Committee, the terms and conditions of that Service Agreement set forth in
Schedule 5.02 (d) of the Limited Liability Company Agreement of Newco 1,
LLC shall also govern any services provided or performed under under this Newco
2, LLC Agreement.

 

 

Schedule 5.02 (d)

 

DEVELOPMENT SERVICES AGREEMENT

 

This
is a Development Services Agreement (the “Agreement”) between Digimarc
Corporation, a Delaware corporation, having a place of business at 9405 SW
Gemini Drive, Beaverton, Oregon 97008, and its subsidiaries (“Digimarc”), and
[Newco 1, LLC], a Delaware limited liability company, having a place of
business at 9405 SW Gemini Drive, Beaverton, 97008 (“Newco 1”).

 

For
good and valuable consideration as stated herein, the parties hereby agree as
follows:

 

This
Agreement is entered into contemporaneously with, and appended as a schedule
to, the Limited Liability Company Agreement of [Newco 1, LLC].

 

The
effective date of this Agreement is July 1, 2009 (“Effective Date”).

 

Definitions
of terms defined in the Limited Liability Company Agreement of [Newco 1, LLC]
are not repeated here.

 

1.               IP
Ownership and License Grants.

 

1.1.          Technology and Patents Developed
Pursuant to Development Services Agreement. 
Ownership and licensing of intellectual property shall be consistent
with section 5.01 of the Limited Liability Company Agreement of [Newco 1, LLC]
with respect to the Digimarc Services provided for herein.

 

2.               Digimarc
Services.

 

2.1.          Authorized
Services.  Digimarc will perform
services for Newco 1 relating to the development of Newco 1 products and
services (the “Digimarc Services”), including research, development,
engineering, quality assurance, market research and development, strategic
planning, strategy development, business development, project management,
reporting, and such other services or activities as will be determined from
time to time by the management of Newco 1 and the Members’ Committee of Newco
1.  Digimarc will perform the Digimarc
Services in good faith and with a reasonable standard of quality, but in no
event with a standard of quality less than that Digimarc employs for services
Digimarc performs for itself.  The Digimarc Services shall not
include any time or labor spent by Digimarc in its own strategic planning or
the management of its own organization, outside of the management of the
specific activities to be conducted as part of such Services.

 

2.2.          Annual Work Plan.  The particular Digimarc Services to be
performed and expenditures to be made by Digimarc shall be set forth in an
annual work plan and budget (the “Annual Work Plan”) as adopted and approved by
the management 

 

 

of
Newco 1.  The parties shall mutually
agree upon a process for determining the Annual Work Plan consistent with the
Approved Budget and Approved Business Plan process of and for Newco 1.  The Annual Work Plan shall state reasonable
and specific objectives to be met by Digimarc, and which shall take into account
Newco 1’s strategic goals and operational experience, Digimarc’s resources and
capabilities to assist Newco 1 in achieving those goals, and the market
conditions then prevailing.  The parties
shall also mutually agree upon an informal process for change management and
for resolving disputes concerning determination of the Annual Work Plan.  In all events, Digimarc shall make resources
available in each year covered by a timely submitted and reasonable Annual Work
Plan (a “Plan Year”) sufficient to perform the Digimarc Services identified in
the Annual Work Plan.  The first Plan
Year for the rest of 2009 will begin on July 1, 2009, prior to completion
of the Annual Work Plan, based upon a short statement of work to be agreed upon
by the parties.  The Annual Work Plan for
2010 will be determined as soon as practicable thereafter, and no later than December 31,
2009.  Successive Annual Work Plans shall
be determined no later than ninety (90) days prior to the beginning of each
subsequent Plan Year.  If Digimarc
reasonably believes that any requested changes to the Annual Work Plan will
result in additional expenditures exceeding those approved by Newco 1 in the
Annual Work Plan, it shall so inform Newco 1. 
If Newco 1 and Digimarc agree to the requested changes and such
additional expenditures, they shall amend the Annual Work Plan to reflect such
changes.  Unless the Members’ Committee
of Newco 1 authorizes such additional expenditures in writing, Newco 1 shall
not be obligated to pay for Digimarc Services in excess of the larger of (a) the
amount set forth in the Annual Work Plan (including as amended pursuant to the
preceding sentence) or (b) the Service Minimum Fee (as defined below).

 

2.3.          Quarterly Reporting and Review.  Within thirty (30) days following the end of
each quarter during each Plan Year, Digimarc shall provide reports stating its
progress in achieving the objectives set forth in the Annual Work Plan, and
describing in detail the Digimarc Services performed and expenditures made in
that quarter.  The parties shall mutually
agree upon a process for a joint quarterly review of Digimarc’s progress in
achieving the objectives set forth in the Annual Work Plan, and for considering
any changes that either Newco 1 or Digimarc may propose to the Annual Work
Plan.

 

2.4.          Minimum Service Fees.  Subject to any termination of its obligation
to engage Digimarc to perform the Digimarc Services, Newco 1 shall pay, in
equal quarterly payments as set forth below, the following minimum annual
amounts for Digimarc Services in each Plan Year (the “Minimum Service Fees”):

 

	
  Annual Work Plan Period

  	
   

  	
  Plan Year 2009

  	
   

  	
  Plan Year 2010

  	
   

  	
  Plan Year 2011

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Minimum Fees

  	
   

  	
  $

  	
  1.13 million

  	
   

  	
  $

  	
  2.80 million

  	
   

  	
  $

  	
  2.74 million

  	
   

  
											

 

In
the event that Digimarc is retained to provide development services to [Newco
2, LLC] during the term of this Agreement, the amounts paid by [Newco 2, LLC]
shall be credited against the minimums set forth above.  Quarterly payments of such fees, 

 

 

including
Minimum Service Fees, will be due and payable to Digimarc only for those
quarters in which Digimarc performs Digimarc Services in accordance with a
timely submitted and reasonable Annual Work Plan, at such levels as would be
sufficient to generate the Minimum Service Fees as set forth above; or if Newco
1 fails to timely submit a reasonable Annual Work Plan, in which Digimarc was
ready, willing and able to perform such level of Digimarc Services.  Quarterly
Minimum Service Fee payments are due and payable to Digimarc on the first day
of each quarter in which the Digimarc Services are to be provided.  Minimum Service Fees do not include
any hardware, equipment or software purchased on behalf of Newco 1 by
Digimarc.  Hardware, equipment or
software will only be purchased on behalf of Newco 1 by Digimarc upon written
approval by Newco 1 and will be charged back to Newco 1 with no markup.

 

2.5.          Labor Rates. 
Labor rates charged for Digimarc Services will be as shown in Appendix
A.  The labor rates will be increased on January 1
of each year based on the report used by Digimarc for evaluating annual labor
rates for similar project work, reflecting an determination of average rates of
wage and benefits cost inflation, and may otherwise be adjusted by mutual
agreement of the parties. The Members shall have an opportunity to review the
aforementioned labor report prior to implementation of any annual labor rate
adjustments.

 

2.6.          Digimarc Services Payment Schedule
and Invoice.  Digimarc shall furnish
an invoice to Newco 1 following each quarter of any Plan Year.  The invoice shall be accompanied by an
itemization of the Digimarc Services actually performed in that quarter,
including an identification of individual timekeepers, their respective hours
and rates, and the nature of the work performed by them with reference to the
objectives of the Annual Work Plan.  The
invoice shall also be accompanied by an itemization of those out-of-pocket
expenditures reasonably incurred by Digimarc in performing the Digimarc
Services, reimbursement of which shall be included in the Minimum Service
Fees.  Within thirty (30) days of receipt
of such invoice, Newco 1 shall pay for Digimarc Services actually performed by
Digimarc in accordance with the then-current Annual Work Plan in that quarter
to the extent that the Digimarc Services actually performed by Digimarc within
that Plan Year to date, as reflected in the cumulative quarterly invoices for
that Plan Year, exceed the Minimum Service Fees owed for that Plan Year
cumulatively to date.  If the amount of
Digimarc Services actually performed and invoiced in that quarter, when added
to the amount of Digimarc Services actually performed and invoiced in prior
quarters of that Plan Year, is less than the Minimum Service Fees owed for that
Plan Year cumulatively to date, Newco 1 shall [**].

 

2.7.          Audit
Rights.  For a period of three (3) years
following the end of any Plan Year, or until resolution of a dispute concerning
the accuracy of the invoices or quarterly reports for a particular Plan Year
arising within that three-year period, Newco 1 (and its designated agents)
shall have the right to inspect and examine Digimarc’s books and records
relating to the Digimarc Services, including time records and activity logs,
for the purpose of determining whether Digimarc’s invoices and  quarterly reports for that Plan Year are
accurate; provided, however, that
Digimarc may redact such documents to 

 

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

 

 

preserve the confidentiality of Digimarc proprietary
information that is not necessary to verify the accuracy of the invoices or
quarterly reports.  Any such inspection and examination will take place
upon reasonable prior written notice to Digimarc, during regular business hours
and no more than once a year.  Digimarc
shall promptly refund to Newco 1 any amount that the audit shows was overpaid
by Newco 1 in that Plan Year per the Agreement and, if the overpayment is
greater than 5% of the total payment for that Plan Year, Digimarc shall also
pay the reasonable out-of-pocket costs of the inspection and examination.

 

2.8.          Newco 1 Commitment of Resources.   Newco 1 shall use its commercially
reasonable efforts to develop and support its products and services, including
the commitment of a reasonable amount of marketing, financial and
organizational resources.  In furtherance
of those efforts, Newco 1 shall prepare an Annual Work Plan for the development
and support of the Newco 1 products and services business, shall invite
Digimarc to advise and contribute to the formation of such plan, and shall
share such plan with Digimarc.   The
Members’ Committee shall review the Annual Work Plan at each quarterly meeting
and make whatever changes it believes necessary and appropriate for the
operation of the Company.

 

2.9.          Digimarc Opportunity to Bid.   For so long as [**], Newco 1 shall provide
Digimarc with a reasonable opportunity to [**].

 

2.10.        Limitations on Digimarc Services for
Other Parties.  For as long as Newco
1 is timely paying Digimarc for Digimarc Services, Digimarc shall not [**].

 

2.11.        Patent Prosecution.  To the extent that the parties identify
potentially patentable inventions arising from the Digimarc Services, with the
consent of and pursuant to the direction of the Members’ Committee, the parties
will determine how and whether to prosecute a patent for such inventions.

 

3.              Remedies
for Breach.

 

3.1.          Remedies for
Breach.  If either party materially
breaches this Agreement, the non-breaching party may, in addition to other
remedies at law and in equity, terminate this Agreement.  Prior to terminating this Agreement for
breach, the non-breaching party must first give the breaching party written
notice specifying in detail the alleged breach. 
The breaching party shall then have seventy-five (75) days to cure such
breach.

 

4.              Termination.

 

The
term of this Agreement is through December 31, 2011.

 

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

 

 

5.              Other
Provisions.

 

5.1.          Confidentiality.  Each party agrees that it will treat
confidential information of the other party in a manner consistent with the
confidentiality agreement between the parties. 
Notwithstanding the foregoing, either party may provide a copy of this
Agreement to a third party considering in good faith a bona fide transaction as
contemplated in Section 5.2, provided that such third party agrees in
writing to be bound to a confidentiality agreement customary to such
transactions and prohibiting use of its knowledge of this Agreement or its
provisions for any competitive purpose. 
Upon request by the disclosing party with respect to specifically
identified information, the receiving party will return to the disclosing party
or destroy all of the confidential information in the receiving party’s
possession or control furnished to it by the disclosing party which the
receiving party does not need to retain in order to perform any obligations
imposed, or exercise any rights (including rights of ownership) acquired, by
this Agreement, and shall certify in writing its return or destruction of such
confidential information.  If the
receiving party is subject to judicial or governmental proceedings or is
subject to government regulations requiring disclosure of confidential
information of the disclosing party, then prior to disclosing such information,
the receiving party will provide the disclosing party with reasonable prior
notice for the disclosing party to seek a protective order for confidential
treatment of the confidential information and will only disclose that
information that is necessary and required. 
If the entire Agreement is terminated, the obligations set out in this Section will
extend for a period of [**] years from this termination date, except that the
confidential information of the disclosing party that is specifically
identified by it as a trade secret will be protected for a period of [**]
years.

 

5.2.            Assignment.  Neither party may assign any of its rights or obligations under this Agreement to any
person without the prior written consent of the other, and any such
purported assignment shall be null and void from inception; provided, however,
that (a) either party may assign all its rights and delegate all its
obligations hereunder to a single person without such approval in connection
with: (i) a merger, consolidation, reorganization, statutory conversion,
amalgamation or similar corporate transaction, or (ii) a sale or other
disposition of all or substantially all of its assets in the businesses
relating to this Agreement, and (b) Newco 1 may assign all its rights and
delegate all its responsibilities to an Affiliate in connection with a
restructuring or reorganization of Newco 1.

 

5.3.          Bankruptcy.  Any intellectual property licenses and rights
granted to either party hereunder or pursuant hereto are, and will be deemed to
be, for purposes of Section 365(n) of the United States Bankruptcy
Code (“Code”) licenses of “intellectual property”, as defined under the
Code.  Notwithstanding any provision
contained herein to 

 

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

 

 

the
contrary, if a party is under any proceeding under the Code and the trustee in
bankruptcy of that party, or that party as a debtor in possession, rightfully
elects to reject this Agreement, then the other party pursuant to the relevant
portions of Section 365(n) of the Code may retain any and all of such
other party’s licenses and rights hereunder to the maximum extent permitted by
law.

 

5.4.          Limitations on Damages.  NEITHER DIGIMARC NOR NEWCO 1 WILL BE LIABLE
FOR ANY INDIRECT, INCIDENTAL, CONSEQUENTIAL, EXEMPLARY, RELIANCE, PUNITIVE OR
SPECIAL DAMAGES ARISING UNDER THIS AGREEMENT, EVEN IF ADVISED OF THE POSSIBILITY
OF SUCH DAMAGES.

 

5.5.          Governing Law, Jurisdiction and
Venue.  This Agreement shall be
governed by New York law.  All matters
concerning the interpretation of, or performance under, this Agreement will be
resolved in the state or federal courts in New York applying New York law and
jurisdiction and venue will be proper in such New York courts.

 

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

 

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

 

The
contacts to address the notices to are:

 

If to Digimarc:

 

Digimarc Corporation

9405 S.W. Gemini Drive

Beaverton, Oregon 97008 

Attention: Bruce Davis, CEO

with a copy to Robert Chamness, Chief Legal Officer and Secretary

Facsimile No.:  (503) 469-4771

 

 

If to Newco 1:

 

Newco 1, LLC

9405 S.W. Gemini Drive

Beaverton, Oregon 97008 

Attention:
                                ,
CEO

with a copy to the Legal Officer and Secretary

Facsimile No.:  (503) 469-4771

 

If to Nielsen:

 

The Nielsen Company (US) LLC

770 Broadway

New York, NY 10036

Attention: Itzhak Fisher, Global Product Leadership

with a copy to the Chief Legal
Officer

Facsimile No.: (646) 654-8318

 

5.8.      Integration.  This
Agreement embodies the entire agreement of the parties hereto regarding the
subject matter herein, and supersedes and cancels any and all previous
negotiations, agreements or commitments with respect to them, including without
limitation the terms and conditions under a prior agreement between Digimarc and
Nielsen executed on November 27, 2007, with an effective date of October 1,
2007 (the “Prior Agreement”) (including all payment obligations of Nielsen
accruing after the Effective Date).

 

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

 

5.10.     
Amendments.  This Agreement
may not be modified in any manner except by an instrument in writing duly
signed by each of the parties hereto.

 

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

 

5.12.      No Agency.  Nothing in this Agreement will be construed
as creating any agency, partnership or other form of joint enterprise between
Digimarc and Newco 1.    Neither party
will have authority under this Agreement to contract for or bind the other in
any manner whatsoever.

 

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

 

 

5.14.      Survival.  Upon expiration or termination of this
Agreement, rights to payment under this Agreement and the provisions set out in
Sections 1, 2.4, 2.7, 3.1, 5.1, 5.2, 5.3, 5.4, 5.6, 5.7, and 5.13 will remain
in effect.

 

5.15.      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.

 

IN WITNESS WHEREOF, the Members’ Committee has
adopted this Agreement as part of the Limited Liability Company Agreement of
[Newco 1, LLC], to be effective as of the Effective Date.

 

 

APPENDIX A:  LABOR RATES (current
rates)

 

	
  Job Classification

  	
   

  	
  Rate

  	
   

  
	
  Account Manager

  	
   

  	
  $

  	
  [**]

  	
   

  
	
  Director

  	
   

  	
  $

  	
  [**]

  	
   

  
	
  Engineering Manager

  	
   

  	
  $

  	
  [**]

  	
   

  
	
  Executive

  	
   

  	
  $

  	
  [**]

  	
   

  
	
  Lawyer

  	
   

  	
  $

  	
  [**]

  	
   

  
	
  Paralegal

  	
   

  	
  $

  	
  [**]

  	
   

  
	
  Market Development Manager

  	
   

  	
  $

  	
  [**]

  	
   

  
	
  Marketing Engineer

  	
   

  	
  $

  	
  [**]

  	
   

  
	
  Product Manager

  	
   

  	
  $

  	
  [**]

  	
   

  
	
  Project Director

  	
   

  	
  $

  	
  [**]

  	
   

  
	
  QA Engineer

  	
   

  	
  $

  	
  [**]

  	
   

  
	
  R&D Engineer

  	
   

  	
  $

  	
  [**]

  	
   

  
	
  Software Engineer

  	
   

  	
  $

  	
  [**]

  	
   

  
	
  Technical Writer

  	
   

  	
  $

  	
  [**]

  	
   

  
	
  IT Network Support

  	
   

  	
  $

  	
  [**]

  	
   

  

 

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

 

 

Schedule 5.03

 

Nielsen Data License

 

 

MASTER
SERVICES AGREEMENT

BY AND BETWEEN

THE NIELSEN COMPANY (US), INC.

AND

[Name of Client]

 

This Agreement
(“Agreement”), dated as of [effective date of Agreement], between The Nielsen
Company (US), Inc., a New York corporation (“Nielsen”), and [Name of
Client], a [state/type of organization] (“Client”), governs the provision and
use of data, information, technology and related services (“Services”)
identified in one or more local service agreements or in a project order for
Custom Services (as defined below) (each an “LSA”), entered into by Nielsen and
Client and/or their respective affiliates. 
“Nielsen” shall mean Nielsen and/or its affiliates and “Client” shall
mean Client and/or its affiliates, and in each LSA “Nielsen” shall mean the
Nielsen entity providing the Services and “Client” shall mean the Client entity
receiving the Services under such LSA. 
Each LSA binds only the Nielsen and Client entities which execute the
LSA, or on behalf of which the LSA is executed, and does not vest rights in any
affiliate that is not a party to such LSA. 
This Agreement shall apply to any services provided to Client during the
term of this Agreement, whether or not specified in an LSA.

 

Article 1.                                            Scope
of Service

 

1.1          Services; Ownership and License.  Nielsen shall
deliver the Services set forth in each LSA (which may include one or more of
the following) for use solely by Client in accordance with this Agreement and
such LSA.  The data and information included
in Services are referred to as “Nielsen Information”.  Client agrees that:

 

(a)           “Licensed Services” are services to
which Nielsen retains ownership and which Nielsen does not sell but licenses to
multiple clients including, among others, media, household panel, retail
tracking, online and mobile services and Technology Services (as defined
below).  Client is granted a limited,
non-exclusive license to use Licensed Services as set forth in this Agreement
and any applicable LSA.

 

(b)           “Custom Services” include BASES and
certain customized research Services (not including any Technology Services)
and ownership of such Custom Services shall be subject to the terms of the
applicable LSA and/or project order.

 

(c)           “Technology Services” include
Internet portals, access and analytic tools, licensed systems, templates and
software (including delivery media, manuals, updates and new versions provided
by Nielsen), and Client shall maintain, and upgrade if necessary, its hardware,
operating systems and third party software consistent with any requirements
and/or changes to the Technology Services, and Nielsen shall provide Client
with notice of such requirements and/or changes for the operation of Technology
Services prior to implementation.

 

 

Article 2.                                            Fees
and Taxes

 

2.1          Fees.  Client agrees to pay the fees set forth in
each LSA and such fees are due when invoiced and are payable within 30 days of
the date of the invoice.  Client agrees
to pay interest at 1.5% per month (or, if lower, the maximum legal rate) from
the date originally due until payment is received by Nielsen on all amounts
thereafter.

 

2.2          Taxes.  Client is responsible for all value-added,
goods and services, sales, use and similar taxes due with respect to the
Services.

 

Article 3.               Use of Services

 

3.1          Uses and Disclosure of Services.  Client may
only use Services internally except as permitted in (a) and (b) below
and in an LSA or other written agreement signed by an expressly and duly
authorized representative of Nielsen. 
Client may:

 

(a)           in the case of Licensed Services,
include “Limited Excerpts” (meaning Nielsen Information that is not of
sufficient quantity or quality as to have independent commercial value, as
determined by Nielsen in its sole discretion) in annual reports, reports to the
financial community and releases to the media for the purpose of corporate
image-building or product promotion; and

 

(b)           in the case of Custom Services, use
Nielsen Information (i) in the conduct of its business with partners,
suppliers and customers, and (ii) with Nielsen’s prior written consent, in
advertising or promotion of Client’s products or services.

 

Any Nielsen Information that is disclosed must be
accurately sourced to Nielsen, be disclosed only to authorized third parties,
and not be presented in a misleading manner.

 

3.2          Uses of References.  Disaggregated
data, data dictionaries, reference tools, data methodologies, data
attributes/characteristics and flat files are referred to as “References” and
may only be used internally unless disclosure to a third party is authorized in
writing by Nielsen.

 

3.3          Restrictions.  Client shall not decompile, reverse engineer,
disassemble, sublicense, distribute, dispose of, modify, adapt, translate, or
remove any proprietary or copyright legend from any Service or Nielsen
Information.

 

3.4          Third Parties.  Client may furnish Nielsen
Information to third parties (such as consultants and third party processors)
retained by Client for use solely on behalf of Client provided that, prior to
accessing such Nielsen Information, the third party shall have entered into
Nielsen’s then standard form of agreement for such third party, as determined
by Nielsen in its sole discretion.  At
its discretion, Nielsen may decline to enter into such agreement or grant a
particular third party access or rights to Nielsen Information, and Nielsen
reserves the right to charge for such access. 
Nielsen is not responsible for the accuracy of information produced by
such third party from Nielsen Information.

 

3.5          Legal Proceedings.  No Services or Nielsen
Information may be used in any legal or administrative proceeding.  If such use is compelled by legal process,
Client shall 

 

 

promptly give Nielsen
advance written notice and, before such use, obtain confidentiality agreements,
protective orders and evidentiary stipulations acceptable to Nielsen and shall
limit the use to the minimum necessary to comply with such legal requirement.

 

Article 4.                                            Changes
to Services and Charges

 

4.1          Changes to Service.  Nielsen may,
from time to time, in its sole discretion, make changes to any Service or
portion thereof including, without limitation, formats, schedules,
specifications and/or techniques.

 

4.2          Charges.  In the event of a change to a Service,
Nielsen may, upon 30 days’ prior written notice, adjust the fees for such
Service.  Such fee change shall become
effective on the date stated in Nielsen’s notice unless, within 15 days after
such notice, Client notifies Nielsen in writing of its refusal to accept the fee
change, in which event the applicable Service to Client shall terminate as of
the effective date of the change; provided, however, that Nielsen may, in its
sole discretion, elect to rescind the fee change, in which case the Service to
Client, as changed, shall continue as provided in the applicable LSA.

 

Article 5.                                            Warranties,
Limitation of Liability, Exclusive Remedy and Indemnification

 

5.1          Disclaimer of Warranties.  Client
recognizes that Nielsen Information represents Nielsen’s opinion based on its
analysis of data and information, including data from sample households and
other sources that may not be under Nielsen’s control, and that Nielsen cannot
guarantee the accuracy of Nielsen Information. 
Without limiting the foregoing, NIELSEN DISCLAIMS, AND CLIENT HEREBY
WAIVES, ANY AND ALL WARRANTIES, WHETHER EXPRESS OR IMPLIED, TO CLIENT OR TO ANY
THIRD PARTY, CONCERNING THE SERVICES AND NIELSEN INFORMATION PROVIDED HEREUNDER
OR UNDER AN LSA INCLUDING, BUT NOT LIMITED TO, ANY WARRANTIES OF
MERCHANTABILITY, QUALITY OR FITNESS FOR ANY PARTICULAR PURPOSE.  The foregoing disclaimer shall not act as or
constitute an admission by Nielsen that any Services or Nielsen Information
constitute goods, commodities or tangible personal property under applicable
law.

 

5.2          Limitation of Nielsen’s Liability; Exclusive Remedies. 
Nielsen will give a pro rata refund of fees paid for any Nielsen
Information for such period of time as it fails to provide the Nielsen
Information and will use reasonable efforts to correct material errors Client
identifies in Nielsen Information. 
Nielsen will not be liable, in contract, tort (including negligence) or
otherwise, for any loss, expense or damage of any kind including, without
limitation, special, incidental or consequential damages, due to any failure to
provide any Service or resulting from any errors or inaccuracies in the Nielsen
Information or from the use by Client or others of any Service or Nielsen
Information.  UNLESS OTHERWISE PROHIBITED
BY APPLICABLE LAW, NIELSEN SHALL NOT BE LIABLE FOR ANY CLAIM BROUGHT AFTER THE
SHORTER OF 1 YEAR AFTER THE CAUSE OF ACTION HAS ACCRUED OR MORE THAN 2 

 

 

YEARS AFTER THE
TERMINATION OF THIS AGREEMENT OR THE APPLICABLE LSA.  THESE REMEDIES ARE EXCLUSIVE.

 

5.3          Indemnity.  Client agrees to indemnify and hold Nielsen
harmless from and against all claims, damages, loss or expenses (including
attorneys’ fees) arising, directly or indirectly, from (i) Client’s
permitted disclosure pursuant to paragraph 3.1 or an LSA or (ii) Client’s
disclosure or use of the Services or Nielsen Information contrary to the terms
of this Agreement or an LSA.

 

Article 6.                                            Term,
Suspension and Termination

 

6.1          Term.  Unless terminated in accordance with the
terms hereof, this Agreement, licenses and the Services rendered hereunder
shall commence on the date hereof and shall remain in effect for so long as any
LSA remains in full force and effect.

 

6.2          Return of Materials upon Termination.  Upon
termination or expiration of this Agreement or any LSA, (i) Client shall
discontinue use of and return to Nielsen all Licensed Services and Technology
Services and the Nielsen Information, including References provided thereunder,
and (ii) all rights and licenses granted to Client to use such Services
shall cease and terminate immediately. 
In lieu of return, Client may remove Nielsen Services from its systems
and records, destroy tangible forms thereof, and certify such
removal/destruction in a written form satisfactory to Nielsen.

 

6.3          Partial Termination of Services Due To Third Party Activity. 
Certain Services are based on data or information from third parties and
Nielsen may discontinue furnishing a Service or any portion thereof to the
extent any such third party data or information ceases to be available to
Nielsen for any reason.

 

6.4          Suspension of Services.  The provision
of Services or licenses, or any portion thereof, may be suspended by Nielsen at
any time in the event that Client fails to perform its payment or other
obligations set forth herein or in an LSA. 
Such suspension of Service shall not suspend or otherwise affect
Client’s payment obligations set forth herein or in an LSA.

 

6.5          Termination by Nielsen.  This
Agreement and any LSA and any or all of the Services or licenses provided
hereunder or under an LSA may be terminated by Nielsen on any date specified by
Nielsen (i) if Client has failed to perform any one or more of its payment
or other obligations hereunder, (ii) if Nielsen is or will become unable
for any reason beyond its control to perform its obligations hereunder, or (iii) if
Nielsen is terminating such Service to all clients then subscribing to a class
of such Service.

 

Article 7.               General Provisions

 

7.1          Survival.  The rights and obligations of Nielsen and
Client set forth in Articles 2, 3, and 5 and Sections 6.2, 7.6 and 7.8 shall
survive the termination of this Agreement or of any LSA.

 

 

7.2          Force Majeure.  In the event either party is
delayed in or prevented from performing any act required hereunder due to
failure of any communication system or on- or off-line computing equipment,
labor troubles, inability to procure materials, governmental or judicial
orders, acts of God, acts of terrorism, weather conditions, third party
interference or other similar reason beyond its control, then performance of
such act shall be excused for the period of such delay; provided, however, that
Client’s obligation to make any payment pursuant to this Agreement or an LSA
shall not be excused for more than ten (10) days.

 

7.3          Independent Contractor Relationship.  The parties
to this Agreement are independent contractors and neither shall have authority
to bind or obligate the other.

 

7.4          Notices.  Any notice or request given hereunder shall
be in writing and deemed given on the date received when delivered personally
or by internationally recognized delivery service (i) if to Nielsen at The
Nielsen Company (US), Inc., 770 Broadway, New York, NY 10003,
Attention:  Chief Executive Officer, with
a copy to the same address, Attention: 
Chief Legal Officer; and (ii) if to Client at [Client Name,
Address], Attention:  [Chief Executive
Officer/General Counsel).

 

7.5          Assignment.  This Agreement is for the benefit of and
binding on the parties and their successors and assigns.  Subject to the prior written consent of
Nielsen, Client may assign its rights under this Agreement to a successor to
all or substantially all of the business of Client, provided all obligations of
Client are assumed by the assignee and documentation satisfactory to Nielsen of
such assumption has been delivered to Nielsen. 
Nielsen reserves the right to assign its rights to an affiliate of
Nielsen or a successor to all or substantially all of the business of Nielsen,
and reserves the right to have any Services rendered by such affiliate or
successor, after providing notice in writing to Client.

 

7.6          Injunctive Relief.  Any breach of the use of
services provisions of Article 3 of this Agreement or similar provisions
in an LSA may cause irreparable harm to Nielsen, for which Nielsen’s remedies
at law will not be adequate.  Nielsen
shall be entitled to injunctive relief without having to prove irreparable
injury, lack of an adequate remedy at law, posting bond or waiving any other
rights.

 

7.7          Entire Agreement; Modification or Amendment; Waiver. 
This Agreement together with any LSA contains the entire understanding
of the parties with respect to the provision of Services covered by such LSA
and supersedes all previous discussions and agreements relating to such
Services.  Neither this Agreement nor any
LSA may be modified or amended except in a writing executed by the
parties.  No waiver by a party of any
breach of this Agreement or an LSA shall be deemed a waiver of any prior or
subsequent breach.

 

7.8          Governing Law.  This Agreement shall be
governed by the law of the State of Illinois, United States of America, without
regard to its choice of law provisions. 
The parties agree to the exclusive personal jurisdiction of the State
and Federal courts located in Chicago, Illinois for purposes of determining all
disputes arising in connection with this Agreement and hereby waive all
objections to venue in those courts. 
Each LSA shall 

 

 

be governed by the laws
of the State of Illinois unless another jurisdiction is specified in such LSA.

 

IN WITNESS
WHEREOF, this Agreement has been executed by the parties hereto through their
duly authorized representatives as of the date set forth above.

 

	
  THE
  NIELSEN COMPANY (US), INC.

  	
   

  	
   

  	
  [Name of Client]

  
	
   

  	
   

  	
   

  	
   

  
	
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