{"id":43850,"date":"2015-09-17T11:25:58","date_gmt":"2015-09-17T16:25:58","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-legal\/contracts\/uncategorized\/postmerger-rights-agreement-digimarc-corp.html"},"modified":"2015-09-17T11:25:58","modified_gmt":"2015-09-17T16:25:58","slug":"postmerger-rights-agreement-digimarc-corp","status":"publish","type":"corporate_contracts","link":"https:\/\/corporate.findlaw.com\/contracts\/securities\/postmerger-rights-agreement-digimarc-corp.html","title":{"rendered":"Postmerger Rights Agreement – Digimarc Corp."},"content":{"rendered":"

RIGHTS AGREEMENT<\/strong><\/p>\n

\n

Dated as of July 31, 2008<\/strong><\/p>\n

\n

between<\/strong><\/p>\n

\n

DIGIMARC CORPORATION<\/strong><\/p>\n

\n

and<\/strong><\/p>\n

\n

COMPUTERSHARE TRUST COMPANY, N.A.,<\/strong><\/p>\n

\n

as Rights Agent<\/strong><\/p>\n

\n<\/p>\n

\n

CONTENTS<\/strong><\/p>\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\n

SECTION 1.<\/p>\n<\/td>\n

\n

CERTAIN DEFINITIONS<\/p>\n<\/td>\n

\n

1<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
\n

SECTION 2.<\/p>\n<\/td>\n

\n

APPOINTMENT OF RIGHTS AGENT<\/p>\n<\/td>\n

\n

7<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
\n

SECTION 3.<\/p>\n<\/td>\n

\n

ISSUANCE OF RIGHTS AND RIGHTS CERTIFICATES<\/p>\n<\/td>\n

\n

8<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
\n

SECTION 4.<\/p>\n<\/td>\n

\n

FORM OF RIGHTS CERTIFICATES<\/p>\n<\/td>\n

\n

9<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
\n

SECTION 5.<\/p>\n<\/td>\n

\n

EXECUTION, COUNTERSIGNATURE AND REGISTRATION<\/p>\n<\/td>\n

\n

10<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
\n

SECTION 6.<\/p>\n<\/td>\n

\n

TRANSFER, SPLIT-UP, COMBINATION AND EXCHANGE OF RIGHTS CERTIFICATES; LOST,
\nSTOLEN, DESTROYED OR MUTILATED RIGHTS CERTIFICATES; UNCERTIFICATED RIGHTS<\/p>\n<\/td>\n

\n

11<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
\n

SECTION 7.<\/p>\n<\/td>\n

\n

EXERCISE OF RIGHTS; EXPIRATION DATE OF RIGHTS<\/p>\n<\/td>\n

\n

12<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
\n

SECTION 8.<\/p>\n<\/td>\n

\n

CANCELLATION AND DESTRUCTION OF RIGHTS CERTIFICATES<\/p>\n<\/td>\n

\n

14<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
\n

SECTION 9.<\/p>\n<\/td>\n

\n

RESERVATION AND AVAILABILITY OF PREFERRED SHARES<\/p>\n<\/td>\n

\n

14<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
\n

SECTION 10.<\/p>\n<\/td>\n

\n

PREFERRED SHARES RECORD DATE<\/p>\n<\/td>\n

\n

16<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
\n

SECTION 11.<\/p>\n<\/td>\n

\n

ADJUSTMENTS IN RIGHTS AFTER THERE IS AN ACQUIRING PERSON; EXCHANGE OF RIGHTS
\nFOR SHARES; BUSINESS COMBINATIONS<\/p>\n<\/td>\n

\n

16<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
\n

SECTION 12.<\/p>\n<\/td>\n

\n

CERTAIN ADJUSTMENTS<\/p>\n<\/td>\n

\n

20<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
\n

SECTION 13.<\/p>\n<\/td>\n

\n

CERTIFICATE OF ADJUSTMENT<\/p>\n<\/td>\n

\n

21<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
\n

SECTION 14.<\/p>\n<\/td>\n

\n

ADDITIONAL COVENANTS<\/p>\n<\/td>\n

\n

22<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
\n

SECTION 15.<\/p>\n<\/td>\n

\n

FRACTIONAL RIGHTS AND FRACTIONAL SHARES<\/p>\n<\/td>\n

\n

22<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
\n

SECTION 16.<\/p>\n<\/td>\n

\n

RIGHTS OF ACTION<\/p>\n<\/td>\n

\n

23<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
\n

SECTION 17.<\/p>\n<\/td>\n

\n

AGREEMENT OF RIGHTS HOLDERS<\/p>\n<\/td>\n

\n

24<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
\n

SECTION 18.<\/p>\n<\/td>\n

\n

RIGHTS CERTIFICATE HOLDER NOT DEEMED A SHAREHOLDER<\/p>\n<\/td>\n

\n

25<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
\n

SECTION 19.<\/p>\n<\/td>\n

\n

CONCERNING THE RIGHTS AGENT<\/p>\n<\/td>\n

\n

25<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
\n

SECTION 20.<\/p>\n<\/td>\n

\n

MERGER OR CONSOLIDATION OR CHANGE OF NAME OF RIGHTS AGENT<\/p>\n<\/td>\n

\n

26<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
\n

SECTION 21.<\/p>\n<\/td>\n

\n

RIGHTS AND DUTIES OF RIGHTS AGENT<\/p>\n<\/td>\n

\n

26<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
\n

SECTION 22.<\/p>\n<\/td>\n

\n

CHANGE OF RIGHTS AGENT<\/p>\n<\/td>\n

\n

29<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
\n

SECTION 23.<\/p>\n<\/td>\n

\n

ISSUANCE OF ADDITIONAL RIGHTS AND RIGHTS CERTIFICATES<\/p>\n<\/td>\n

\n

30<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
\n

SECTION 24.<\/p>\n<\/td>\n

\n

REDEMPTION AND TERMINATION<\/p>\n<\/td>\n

\n

30<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
\n

SECTION 25.<\/p>\n<\/td>\n

\n

NOTICES<\/p>\n<\/td>\n

\n

31<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
<\/p>\n

SECTION 26.<\/p>\n<\/td>\n

\n

SUPPLEMENTS AND AMENDMENTS<\/p>\n<\/td>\n

\n

32<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
\n

SECTION 27.<\/p>\n<\/td>\n

\n

SUCCESSORS<\/p>\n<\/td>\n

\n

33<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
\n

SECTION 28.<\/p>\n<\/td>\n

\n

BENEFITS OF THIS RIGHTS AGREEMENT; DETERMINATIONS AND ACTIONS BY THE
\nCOMPANY153S BOARD OF DIRECTORS<\/p>\n<\/td>\n

\n

33<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
\n

SECTION 29.<\/p>\n<\/td>\n

\n

SEVERABILITY<\/p>\n<\/td>\n

\n

34<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
\n

SECTION 30.<\/p>\n<\/td>\n

\n

GOVERNING LAW<\/p>\n<\/td>\n

\n

34<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
\n

SECTION 31.<\/p>\n<\/td>\n

\n

COUNTERPARTS<\/p>\n<\/td>\n

\n

34<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
\n

SECTION 32.<\/p>\n<\/td>\n

\n

DESCRIPTIVE HEADINGS<\/p>\n<\/td>\n

\n

34<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
\n

SECTION 33.<\/p>\n<\/td>\n

\n

FORCE MAJEURE<\/p>\n<\/td>\n

\n

34<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

\n

<\/p>\n

RIGHTS AGREEMENT<\/strong><\/p>\n

\n

RIGHTS AGREEMENT, dated as of July 31, 2008 between Digimarc Corporation, a
\nDelaware corporation formerly known as DMRC Corporation (the
\n“Company<\/em><\/strong>“), and Computershare Trust Company, N.A., a
\nfederally chartered trust company, as Rights Agent (the “Rights
\nAgent<\/em><\/strong>“).<\/p>\n

Subject to the completion of the merger of DMRC LLC with and into the
\nCompany, its wholly-owned subsidiary, with the Company being the surviving
\ncompany in the merger (the “DMRC Merger<\/em><\/strong>“), the Board
\nof Directors of the Company (the “Board of
\nDirectors<\/em><\/strong>“) has authorized and declared a dividend of one Right
\n(as hereinafter defined) for each share of common stock, $0.001 par value per
\nshare, of the Company (the “Common Stock<\/em><\/strong>“) outstanding
\nat the Close of Business (as hereinafter defined) on August 1, 2008 (the
\n“Record Date<\/em><\/strong>“). The Board of Directors has further
\nauthorized the issuance of one Right (as such number may be hereinafter adjusted
\npursuant to the provisions of this Rights Agreement) with respect to each share
\nof Common Stock that shall become outstanding between the Record Date and the
\nearliest of the Distribution Date, the Redemption Date and the Expiration Date
\n(as such terms are hereinafter defined); provided, however<\/em>, that the
\nCompany may issue Rights with respect to shares of Common Stock that shall
\nbecome outstanding after the Distribution Date and prior to the earlier of the
\nRedemption Date and the Expiration Date in accordance with the provisions of
\nSection 23 hereof. Each Right shall initially represent the right to purchase
\none one-hundredth (1\/100) of a share of Series R Participating Cumulative
\nPreferred Stock, $0.001 par value per share, of the Company (the
\n“Preferred Shares<\/em><\/strong>“), having the powers, rights and
\npreferences set forth in the Certificate of Designation (as hereinafter defined)
\nattached as Exhibit A hereto.<\/p>\n

Accordingly, in consideration of the premises and the mutual agreements set
\nforth in this Rights Agreement, the Company and the Rights Agent hereby agree as
\nfollows:<\/p>\n

SECTION 1.<\/strong> CERTAIN DEFINITIONS<\/strong><\/p>\n<\/p>\n

For purposes of this Rights Agreement, the following terms have the meanings
\nindicated:<\/p>\n

“Acquiring Person<\/em><\/strong>” shall mean any Person (as
\nhereinafter defined) who or which, alone or together with all Affiliates and
\nAssociates (as such terms are hereinafter defined) of such Person, shall be the
\nBeneficial Owner (as hereinafter defined) of 15% or more of the Common Shares
\n(as hereinafter defined) then outstanding, but shall not include: (a) the
\nCompany, (b) any Subsidiary (as hereinafter defined) of the Company, (c) any
\nemployee benefit or compensation plan of the Company or of any of its
\nSubsidiaries or any Person holding Common Shares for or pursuant to the terms of
\nany such employee benefit or compensation plan or (d) any Person who has become
\nand is the Beneficial Owner of 15% or more of the Common Shares outstanding at
\nthe time solely as the result of (i) a change in the aggregate number of Common
\nShares outstanding since the last date on which such Person acquired Beneficial
\nOwnership of any Common Shares, (ii) the acquisition by such Person or one or
\nmore of its Affiliates or Associates of Beneficial Ownership of additional
\nCommon<\/p>\n

1<\/p>\n

\n

<\/p>\n

Shares if such acquisition was made in the good faith belief that such
\nacquisition would not (A) cause the Beneficial Ownership by such Person,
\ntogether with its Affiliates and Associates, to equal or exceed 15% of the
\nCommon Shares outstanding at the time of such acquisition and such good faith
\nbelief was based on the good faith reliance on information contained in publicly
\nfiled reports or documents of the Company that are inaccurate or out-of-date or
\n(B) otherwise cause a Distribution Date or the adjustment provided for in
\nSection 11(a) hereof to occur or (iii) the acquisition by such Person or one or
\nmore of its Affiliates or Associates of Beneficial Ownership of additional
\nCommon Shares if the Board of Directors determines that such acquisition was
\nmade in good faith without the knowledge by such Person or Affiliates or
\nAssociates that such Person would thereby become an Acquiring Person (which
\ndetermination of the Board of Directors of the Company shall be conclusive and
\nbinding on such Person, the Rights Agent, the holders of the Rights and all
\nother Persons). Notwithstanding clause (d)(ii) or (d)(iii) of the prior
\nsentence, if any Person that is not an Acquiring Person due to such clause
\n(d)(ii) or (d)(iii) does not reduce its percentage of Beneficial Ownership of
\nCommon Shares to less than 15% by the Close of Business on the tenth calendar
\nday after notice from the Company (the date of notice being the first day) that
\nsuch Person153s Beneficial Ownership of Common Shares would make it an Acquiring
\nPerson, such Person shall, at the end of such ten calendar day period, become an
\nAcquiring Person (and such clause (d)(ii) or (d)(iii) shall no longer apply to
\nsuch Person). For purposes of this definition, the determination whether any
\nPerson acted in “good faith” shall be conclusively determined by the Board of
\nDirectors.<\/p>\n

“Affiliate<\/em><\/strong>” and
\n“Associate<\/em><\/strong>,” when used with reference to any Person,
\nshall have the respective meanings ascribed to such terms in Rule 12b-2 of the
\nGeneral Rules and Regulations under the Exchange Act (as hereinafter defined),
\nas in effect on the date of this Rights Agreement.<\/p>\n

A Person shall be deemed to be the “Beneficial
\nOwner<\/em><\/strong>” of, to “Beneficially Own<\/em><\/strong>,” and to
\nhave “Beneficial Ownership<\/em><\/strong>” of, any securities:<\/p>\n

(a) that such Person or any of such Person153s Affiliates or Associates is
\ndeemed to “Beneficially Own” within the meaning of Rule 13d-3 of the General
\nRules and Regulations under the Exchange Act, as in effect on the date of this
\nRights Agreement;<\/p>\n

(b) that such Person or any of such Person153s Affiliates or Associates has (i)
\nthe right to acquire (whether such right is exercisable immediately or only
\nafter the passage of time) pursuant to any agreement, arrangement or
\nunderstanding (written or oral), or upon the exercise of conversion rights,
\nexchange rights, rights (other than the Rights), warrants or options, or
\notherwise; provided, however<\/em>, that a Person shall not be deemed to be
\nthe Beneficial Owner of, to Beneficially Own, or to have Beneficial Ownership
\nof, any securities tendered pursuant to a tender or exchange offer made by or on
\nbehalf of such Person or any of such Person153s Affiliates or Associates until
\nsuch tendered securities are accepted for purchase or exchange thereunder or
\n(ii) the right to vote pursuant to any agreement, arrangement or understanding
\n(written or oral); provided, however<\/em>, that a Person shall not be deemed
\nto be the Beneficial Owner of, to Beneficially Own, or to have Beneficial
\nOwnership of, any security if (A) the agreement, arrangement or understanding\n<\/p>\n

2<\/p>\n

\n

<\/p>\n

(written or oral) to vote such security arises solely from a revocable proxy
\nor consent given to such Person in response to a public proxy or consent
\nsolicitation made pursuant to, and in accordance with, the applicable rules and
\nregulations under the Exchange Act and (B) the beneficial ownership of such
\nsecurity is not also then reportable on Schedule 13D under the Exchange Act (or
\nany comparable or successor report); or<\/p>\n

(c) that are Beneficially Owned, directly or indirectly, by any other Person
\nwith which such Person or any of such Person153s Affiliates or Associates has any
\nagreement, arrangement or understanding (written or oral) for the purpose of
\nacquiring, holding, voting (except pursuant to a revocable proxy as described in
\nclause (b)(ii) of this definition) or disposing of any securities of the
\nCompany.<\/p>\n

Notwithstanding the foregoing, nothing contained in this definition shall
\ncause a Person ordinarily engaged in business as an underwriter of securities to
\nbe the “Beneficial Owner” of, or to “Beneficially Own,” any securities acquired
\nin a bona fide firm commitment underwriting pursuant to an underwriting
\nagreement with the Company.<\/p>\n

Notwithstanding anything in this definition to the contrary, the phrase “then
\noutstanding,” when used with reference to a Person153s Beneficial Ownership of
\nsecurities of the Company, shall mean the number of such securities then issued
\nand outstanding, together with the number of such securities not then actually
\nissued and outstanding which such Person would be deemed to own beneficially
\nhereunder.<\/p>\n

“Book Value<\/em><\/strong>,” when used with reference to Common
\nShares issued by any Person, shall mean the amount of such Person153s equity
\napplicable to each Common Share, determined (a) in accordance with generally
\naccepted accounting principles in effect on the date as of which such Book Value
\nis to be determined, (b) using all the consolidated assets and all the
\nconsolidated liabilities of such Person on the date as of which such Book Value
\nis to be determined, except that no value shall be included in such assets for
\ngoodwill arising from completion of a business combination, and (c) after giving
\neffect to (i) the exercise of all rights, options and warrants to purchase such
\nCommon Shares (other than the Rights), and the conversion of all securities
\nconvertible into such Common Shares, at an exercise or conversion price per
\nCommon Share that is less than such Book Value before the exercise or conversion
\n(whether or not exercisability or convertibility is conditioned upon occurrence
\nof a future event), (ii) all dividends and other distributions on the capital
\nstock of such Person declared prior to the date as of which such Book Value is
\nto be determined and to be paid or made after such date, and (iii) any other
\nagreement, arrangement or understanding (written or oral), transaction or other
\naction prior to the date as of which such Book Value is to be determined that
\nwould have the effect of thereafter reducing such Book Value.<\/p>\n

“Business Combination<\/em><\/strong>” shall have the meaning set
\nforth in Section 11(c)(i) hereof.<\/p>\n

“Business Day<\/em><\/strong>” shall mean any day other than a
\nSaturday, Sunday or a day on which banking institutions in the Commonwealth of
\nMassachusetts are authorized or obligated by law or executive order to close.\n<\/p>\n

3<\/p>\n

\n

<\/p>\n

“Certificate of Designation<\/em><\/strong>” shall mean the
\nCertificate of Designation of Series R Participating Cumulative Preferred Stock
\nsetting forth the powers, preferences, rights, qualifications, limitations and
\nrestrictions of such series of Preferred Stock of the Company, a form of which
\nis attached to this Rights Agreement as Exhibit A.<\/p>\n

“Close of Business<\/em><\/strong>” on any given date shall mean
\n5:00 p.m., Boston, Massachusetts time, on such date; provided,
\nhowever<\/em>, that if such date is not a Business Day, “Close of Business” shall
\nmean 5:00 p.m., Boston, Massachusetts time, on the next succeeding Business Day.\n<\/p>\n

“Common Shares<\/em><\/strong>,” when used with reference to the
\nCompany prior to a Business Combination, shall mean the shares of Common Stock
\nof the Company or any other shares of capital stock of the Company into which
\nthe Common Stock shall be reclassified or changed. “Common Shares,” when used
\nwith reference to any Person (other than the Company prior to a Business
\nCombination), shall mean shares of capital stock of such Person (if such Person
\nis a corporation) of any class or series, or units of equity interests in such
\nPerson (if such Person is not a corporation) of any class or series, the terms
\nof which (i) do not limit (as a maximum amount and not merely in proportional
\nterms) the amount of dividends or income payable or distributable on such class
\nor series or the amount of assets distributable on such class or series upon any
\nvoluntary or involuntary liquidation, dissolution or winding up of such Person
\nand (ii) do not provide that such class or series is subject to redemption at
\nthe option of such Person, or any shares of capital stock or units of equity
\ninterests into which the foregoing shall be reclassified or changed;
\nprovided, however<\/em>, that, if at any time there shall be more than one
\nsuch class or series of capital stock or equity interests of such Person,
\n“Common Shares” of such Person shall include all such classes and series
\nsubstantially in the proportion of the total number of shares or other units of
\neach such class or series outstanding at such time.<\/p>\n

“Common Stock<\/em><\/strong>” shall have the meaning set forth in
\nthe second paragraph of this Rights Agreement.<\/p>\n

“Company<\/em><\/strong>” shall have the meaning set forth in the
\nintroductory paragraph of this Rights Agreement; provided, however<\/em>,
\nthat if there is a Business Combination, “Company” shall have the meaning set
\nforth in Section 11(c)(iii) hereof.<\/p>\n

“control<\/em><\/strong>” with respect to any Person shall mean the
\npower to direct the management and policies of such Person, directly or
\nindirectly, by or through stock ownership, agency or otherwise, or pursuant to
\nor in connection with an agreement, arrangement or understanding (written or
\noral) with one or more other Persons by or through stock ownership, agency or
\notherwise. The term “controlled” shall have meaning correlative to the
\nforegoing.<\/p>\n

“Distribution Date<\/em><\/strong>” shall have the meaning set
\nforth in Section 3(b).<\/p>\n

“Exchange Act<\/em><\/strong>” shall mean the Securities Exchange
\nAct of 1934, as amended and in effect on the date in question, unless otherwise
\nspecifically provided in this Rights Agreement.<\/p>\n

4<\/p>\n

\n

<\/p>\n

“Exchange Consideration<\/em><\/strong>” shall have the meaning set
\nforth in Section 11(b)(i).<\/p>\n

“Expiration Date<\/em><\/strong>” shall have the meaning set forth
\nin Section 7(a) hereof.<\/p>\n

“Formula Number<\/em><\/strong>” shall have the meaning set forth
\nin the Certificate of Designation.<\/p>\n

“Major Part<\/em><\/strong>,” when used with reference to the
\nassets of the Company and its Subsidiaries as of any date, shall mean assets (a)
\nhaving a fair market value aggregating 50% or more of the total fair market
\nvalue of all the assets of the Company and its Subsidiaries (taken as a whole)
\nas of the date in question, (b) accounting for 50% or more of the total value
\n(net of depreciation and amortization) of all the assets of the Company and its
\nSubsidiaries (taken as a whole) as would be shown on a consolidated or combined
\nbalance sheet of the Company and its Subsidiaries as of the date in question,
\nprepared in accordance with generally accepted accounting principles then in
\neffect, or (c) accounting for 50% or more of the total amount of net income or
\nrevenues of the Company and its Subsidiaries (taken as a whole) as would be
\nshown on or derived from a consolidated or combined statement of income of the
\nCompany and its Subsidiaries for the period of 12 months ending on the last day
\nof the Company153s monthly accounting period next preceding the date in question,
\nprepared in accordance with generally accepted accounting principles then in
\neffect.<\/p>\n

“Market Value<\/em><\/strong>,” when used with reference to any
\nsecurities on any date, shall mean the average of the daily per share closing
\nprices of such securities for the period that is the shorter of (a) 30
\nconsecutive Trading Days (as hereinafter defined) immediately prior to (but not
\nincluding) the date in question and (b) the number of consecutive Trading Days
\nbeginning on the Trading Day immediately after the date of the first public
\nannouncement of the event requiring a determination of the Market Value and
\nending on the Trading Day immediately prior to but not including the record date
\nof such event; provided, however<\/em>, that, in the event that the Market
\nValue of such securities is to be determined in whole or in part during a period
\nfollowing the announcement by the issuer of such securities of any action of the
\ntype described in Section 12(a) hereof that would require an adjustment
\nthereunder, then, and in each such case, the Market Value of such securities
\nshall be appropriately adjusted to reflect the effect of such action on the
\nmarket price of such securities. The closing price for each Trading Day shall be
\nthe closing price quoted on the principal United States securities exchange
\nregistered under the Exchange Act (or any recognized foreign stock exchange) on
\nwhich such securities are listed, or if such securities are not listed on any
\nsuch exchange, the average of the closing bid and asked quotations with respect
\nto a share of such securities on the Nasdaq Stock Market or such other system
\nthen in use or, if no such quotations are available, the average of the closing
\nbid and asked prices as furnished by a professional market maker making a market
\nin such securities selected by the Company153s Board of Directors. If on any such
\nTrading Day no market maker is making a market in such securities, the closing
\nprice of such securities on such Trading Day shall be deemed to be the fair
\nvalue of such securities as determined in good faith by the Company153s Board of
\nDirectors (whose determination shall be described in a statement filed with the
\nRights Agent and shall be binding on the Rights Agent, the holders of Rights and
\nall other Persons); provided, <\/em><\/p>\n

5<\/p>\n

\n

<\/p>\n

however<\/em>, that for the purpose of determining the closing price of
\nthe Preferred Shares for any Trading Day on which there is no public market for
\nthe Preferred Shares or there is no such market maker for the Preferred Shares,
\nthe closing price on such Trading Day shall be deemed to be the Formula Number
\ntimes the closing price of the Common Stock on such Trading Day.<\/p>\n

“Person<\/em><\/strong>” shall mean an individual, firm,
\ncorporation, partnership, limited liability company, joint venture, association,
\ntrust, unincorporated organization or other entity and shall include any
\nsuccessor (by merger or otherwise) thereof or thereto.<\/p>\n

“Preferred Shares<\/em><\/strong>” shall have the meaning set forth
\nin the second paragraph of this Rights Agreement. Any reference in this Rights
\nAgreement to Preferred Shares shall be deemed to include any authorized fraction
\nof a Preferred Share, unless the context otherwise requires.<\/p>\n

“Principal Party<\/em><\/strong>” shall mean the Surviving Person
\n(as hereinafter defined) in a Business Combination; provided, however<\/em>,
\nthat if such Surviving Person is a direct or indirect Subsidiary of any other
\nPerson, “Principal Party” shall mean the Person which is the ultimate parent of
\nsuch Surviving Person and which is not itself a Subsidiary of another Person. In
\nthe event ultimate control of such Surviving Person is shared by two or more
\nPersons, “Principal Party” shall mean that Person which is immediately
\ncontrolled by such two or more Persons.<\/p>\n

“Purchase Price<\/em><\/strong>” with respect to each Right shall
\nmean $100.00, subject to adjustment as provided herein, and shall be payable in
\nlawful money of the United States of America. All references herein to the
\nPurchase Price shall mean the Purchase Price as in effect at the time in
\nquestion.<\/p>\n

“Record Date<\/em><\/strong>” shall have the meaning set forth in
\nthe second paragraph of this Rights Agreement.<\/p>\n

“Redemption Date<\/em><\/strong>” shall have the meaning set forth
\nin Section 24(a) hereof.<\/p>\n

“Redemption Price<\/em><\/strong>” with respect to each Right shall
\nmean $0.001, as such amount may from time to time be adjusted in accordance with
\nSection 12 hereof. All references in this Rights Agreement to the Redemption
\nPrice shall mean the Redemption Price as in effect at the time in question.<\/p>\n

“Registered Common Shares<\/em><\/strong>” shall mean Common Shares
\nthat are, as of the date of completion of a Business Combination, and have
\ncontinuously been for the 12 months immediately preceding such date, registered
\nunder Section 12 of the Exchange Act.<\/p>\n

“Right<\/em><\/strong>” shall mean the right to purchase Preferred
\nShares (or other securities) as provided in this Rights Agreement.<\/p>\n

“Rights Agent<\/em><\/strong>” shall (a) have the meaning set forth
\nin the introductory paragraph of this Rights Agreement, (b) mean any successor
\nor replacement to Computershare Trust<\/p>\n

6<\/p>\n

\n

<\/p>\n

Company, N.A. as provided in Sections 20 and 22, or (c) mean any additional
\nPerson appointed pursuant to Section 2.<\/p>\n

“Rights Certificate<\/em><\/strong>” shall mean a certificate
\nevidencing a Right in substantially the form attached to this Rights Agreement
\nas Exhibit B.<\/p>\n

“Securities Act<\/em><\/strong>” shall mean the Securities Act of
\n1933, as amended and in effect on the date in question, unless otherwise
\nspecifically provided in this Rights Agreement.<\/p>\n

“Shares Acquisition Date<\/em><\/strong>” shall mean the first date
\nof public announcement by the Company or an Acquiring Person that an Acquiring
\nPerson has become such.<\/p>\n

“Subsidiary<\/em><\/strong>” shall mean a Person, at least a
\nmajority of the total outstanding voting power (being the power under ordinary
\ncircumstances and not merely upon the happening of a contingency) to vote in the
\nelection of directors of such Person (if such Person is a corporation) or to
\nparticipate in the management and control of such Person (if such Person is not
\na corporation) of which is owned, directly or indirectly, by another Person or
\nby one or more other subsidiaries of such other Person or by such other Person
\nor by one or more other subsidiaries of such other Person.<\/p>\n

“Summary of Rights<\/em><\/strong>” shall mean the Summary of
\nRights to Purchase Preferred Shares in substantially the form of Exhibit C
\nattached hereto.<\/p>\n

“Surviving Person<\/em><\/strong>” shall mean (a) the Person which
\nis the continuing or surviving Person in a consolidation or merger specified in
\nSection 11(c)(i)(A) or 11(c)(i)(B) hereof or (b) the Person to which the Major
\nPart of the assets of the Company and its Subsidiaries is sold, leased,
\nexchanged or otherwise transferred or disposed of in a transaction specified in
\nSection 11(c)(i)(C) hereof; provided, however<\/em>, that if the Major Part
\nof the assets of the Company and its Subsidiaries is sold, leased, exchanged or
\notherwise transferred or disposed of in one or more related transactions
\nspecified in Section 11(c)(i)(C) hereof to more than one Person, the “Surviving
\nPerson” in such case shall mean the Person that acquired assets of the Company
\nand\/or its Subsidiaries with the greatest fair market value in such transaction
\nor transactions.<\/p>\n

“Trading Day<\/em><\/strong>” shall mean a day on which the
\nprincipal national securities exchange (or principal recognized foreign stock
\nexchange, as the case may be) on which any securities or Rights, as the case may
\nbe, are listed or admitted to trading is open for the transaction of business
\nor, if the securities or Rights in question are not listed or admitted to
\ntrading on any national securities exchange (or recognized foreign stock
\nexchange, as the case may be), a Business Day.<\/p>\n

SECTION 2.<\/strong> APPOINTMENT OF RIGHTS AGENT<\/strong><\/p>\n<\/p>\n

The Company hereby appoints the Rights Agent to act as agent for the Company
\nin accordance with the terms and conditions of this Rights Agreement, and the
\nRights Agent hereby accepts such appointment. The Company may from time to time
\nappoint one or more co-Rights Agents as it may deem necessary or desirable upon
\nten (10) days153 prior written<\/p>\n

7<\/p>\n

\n

<\/p>\n

notice thereof to the Rights Agent. Notwithstanding the foregoing, the Rights
\nAgent shall have no duty to supervise, and in no event shall be liable for, the
\nacts or omissions of any such co-Rights Agent.<\/p>\n

SECTION 3.<\/strong> ISSUANCE OF RIGHTS AND RIGHTS
\nCERTIFICATES<\/strong><\/p>\n<\/p>\n

(a) One Right shall be associated with each share of Common Stock outstanding
\non the Record Date, each additional share of Common Stock that shall become
\noutstanding between the Record Date and the earliest of the Distribution Date,
\nthe Redemption Date and the Expiration Date and each additional share of Common
\nStock with which Rights are issued after the Distribution Date but prior to the
\nearlier of the Redemption Date and the Expiration Date as provided in Section 23
\nhereof; provided, however<\/em>, that if the number of outstanding Rights are
\ncombined into a smaller number of outstanding Rights pursuant to Section 12(a)
\nhereof, the appropriate fractional Right determined pursuant to such Section
\nshall thereafter be associated with each such share of Common Stock.<\/p>\n

(b) Until the earlier of (i) the Close of Business on the tenth Business Day
\nafter the Shares Acquisition Date and (ii) the Close of Business on such date,
\nif any, as may be designated by the Company153s Board of Directors following the
\ncommencement of, or first public disclosure of an intent to commence, a tender
\nor exchange offer by any Person (other than the Company, any Subsidiary of the
\nCompany, any employee benefit plan of the Company or of any of its Subsidiaries,
\nor any Person holding Common Stock for or pursuant to the terms of any such
\nemployee benefit plan) for outstanding Common Stock, if upon consummation of
\nsuch tender or exchange offer such Person could be the Beneficial Owner of 15%
\nor more of the outstanding Common Stock (the Close of Business on the earlier of
\nthe dates set forth in (i) and (ii) being the “Distribution
\nDate<\/em><\/strong>“), (x) the Rights will be evidenced by the certificates for
\nCommon Stock registered in the names of the holders thereof and not by separate
\nRights Certificates and (y) the Rights, including the right to receive Rights
\nCertificates, will be transferable only in connection with the transfer of
\nCommon Stock. The Company will notify the Rights Agent in writing as promptly as
\npracticable that a Distribution Date has occurred and, if such notification is
\ngiven orally, the Company shall confirm the same in writing on or prior to the
\nnext Business Day. Until such notice is received by the Rights Agent, the Rights
\nAgent may presume conclusively for all purposes that the Distribution Date has
\nnot occurred. As soon as practicable after the Distribution Date, the Company
\nwill prepare and execute, the Rights Agent will countersign, and the Company
\nwill deliver or cause to be sent by first-class, postage-prepaid mail, to each
\nrecord holder of Common Stock as of the Distribution Date, at the address of
\nsuch holder shown on the records of the Company, a Rights Certificate evidencing
\none whole Right for each share of Common Stock (or for the number of shares of
\nCommon Stock with which one whole Right is then associated if the number of
\nRights per share of Common Stock held by such record holder has been adjusted in
\naccordance with the proviso in Section 3(a) hereof). If the number of Rights
\nassociated with each share of Common Stock has been adjusted in accordance with
\nthe proviso in Section 3(a) hereof, at the time of distributing the Rights
\nCertificates the Company may make any necessary and appropriate rounding
\nadjustments so that Rights Certificates representing only whole numbers of
\nRights are distributed and cash is paid in lieu of any fractional Right in
\naccordance with Section 15(a) hereof. The Company<\/p>\n

8<\/p>\n

\n

<\/p>\n

will notify the Rights Agent in writing as promptly as practicable of any
\nsuch adjustments. As of and after the Distribution Date, the Rights will be
\nevidenced solely by such Rights Certificates.<\/p>\n

(c) As soon as practicable, and in any event no later than 30 days after the
\nRecord Date, the Company will send a copy of a Summary of Rights, by
\nfirst-class, postage-prepaid mail, to each record holder of Common Stock as of
\nthe Close of Business on the Record Date at the address of such holder shown on
\nthe records of the Company. With respect to certificates for Common Stock
\noutstanding as of the Record Date, until the earliest of the Distribution Date,
\nthe Redemption Date and the Expiration Date, (i) the Rights will be evidenced by
\nsuch certificates registered in the names of the holders thereof, together with
\na copy of the Summary of Rights attached thereto, and the registered holders of
\nthe Common Stock shall also be the registered holders of the associated Rights,
\nand (ii) the surrender for transfer of any such certificate, even without a copy
\nof the Summary of Rights attached thereto, shall also constitute the transfer of
\nthe Rights associated with the Common Stock represented thereby.<\/p>\n

(d) Certificates representing Common Stock issued after the Record Date
\n(including, without limitation, upon transfer or exchange of outstanding Common
\nStock), but prior to the earliest of the Distribution Date, the Redemption Date
\nand the Expiration Date, shall have printed on, written on or otherwise affixed
\nto them substantially the following legend:<\/p>\n

This certificate also evidences and entitles the holder hereof to certain
\nrights as set forth in the Rights Agreement dated as of July 31, 2008 as it may
\nbe amended or supplemented from time to time (the “Rights Agreement”), between
\nDigimarc Corporation (“Digimarc”) and Computershare Trust Company, N.A. (or any
\nsuccessor thereto), as Rights Agent (or between Digimarc and any successor
\nRights Agent under the Rights Agreement), the terms of which are hereby
\nincorporated herein by reference and a copy of which is on file at the principal
\nexecutive offices of Digimarc. Under certain circumstances, as set forth in the
\nRights Agreement, such Rights will be evidenced by separate certificates and
\nwill no longer be evidenced by this certificate. Digimarc will mail to the
\nholder of this certificate a copy of the Rights Agreement without charge after
\nreceipt of a written request therefor. Rights Beneficially Owned by Acquiring
\nPersons or their Affiliates or Associates (as such terms are defined in the
\nRights Agreement) and by any subsequent holder of such Rights are null and void
\nand nontransferable.<\/p>\n

Notwithstanding the requirements of this paragraph (d), neither the omission
\nof this legend nor the inclusion of a legend that refers to a rights agreement
\nother than the Rights Agreement shall affect the enforceability of any part of
\nthis Rights Agreement or the rights of any holder of Rights.<\/p>\n

SECTION 4.<\/strong> FORM OF RIGHTS CERTIFICATES<\/strong><\/p>\n<\/p>\n

The Rights Certificates (and the form of election to purchase and form of
\nassignment to be printed on the reverse side thereof) shall be in substantially
\nthe form set forth as<\/p>\n

9<\/p>\n

\n

<\/p>\n

Exhibit B and may have such marks of identification or designation and such
\nlegends, summaries or endorsements printed thereon as the Company may deem
\nappropriate and as are not inconsistent with the provisions of this Rights
\nAgreement and which do not affect the rights, duties or responsibilities of the
\nRights Agent, or as may be required to comply with any applicable law or with
\nany rule or regulation made pursuant thereto or with any rule or regulation of
\nany stock exchange on which the Rights may from time to time be listed, or to
\nconform to usage. Subject to the provisions of Sections 7, 11 and 23 hereof, the
\nRights Certificates, whenever issued, shall be dated as of the Distribution
\nDate, and on their face shall entitle the holders thereof to purchase such
\nnumber of Preferred Shares as shall be set forth therein for the Purchase Price
\nset forth therein, subject to adjustment from time to time as herein provided.\n<\/p>\n

SECTION 5.<\/strong> EXECUTION, COUNTERSIGNATURE AND
\nREGISTRATION<\/strong><\/p>\n<\/p>\n

(a) The Rights Certificates shall be executed on behalf of the Company by the
\nChief Executive Officer, the President, the Chief Financial Officer, the
\nTreasurer or a Vice President (whether preceded by any additional title) of the
\nCompany, either manually or by facsimile signature, and shall have affixed
\nthereon the Company153s seal or a facsimile thereof, if any, which shall be
\nattested by the Secretary, an Assistant Secretary or a Vice President (whether
\npreceded by any additional title, provided that such Vice President shall not
\nhave also executed the Rights Certificates) of the Company, either manually or
\nby facsimile signature. The Rights Certificates shall be countersigned by the
\nRights Agent, either manually or by facsimile signature, and shall not be valid
\nfor any purpose unless so countersigned. In case any officer of the Company who
\nshall have signed any of the Rights Certificates shall cease to be such an
\nofficer of the Company before countersignature by the Rights Agent and issuance
\nand delivery by the Company, such Rights Certificates may nevertheless be
\ncountersigned by the Rights Agent and issued and delivered by the Company with
\nthe same force and effect as though the person who signed such Rights
\nCertificates had not ceased to be such an officer of the Company, and any Rights
\nCertificate may be signed on behalf of the Company by any person who, at the
\nactual date of execution of such Rights Certificate, shall be a proper officer
\nof the Company to sign such Rights Certificate, although at the date of
\nexecution of this Rights Agreement any such person was not such an officer of
\nthe Company.<\/p>\n

(b) Following the Distribution Date and receipt by the Rights Agent of (i)
\nwritten notice of the occurrence of the Distribution Date pursuant to Section
\n3(b), and (ii) all necessary information requested by the Rights Agent pursuant
\nto Section 3(b), the Rights Agent will keep or cause to be kept, at its office
\ndesignated for such purpose, books for registration and transfer of the Rights
\nCertificates issued under this Rights Agreement. Such books shall show the names
\nand addresses of the respective holders of the Rights Certificates, the number
\nof Rights evidenced by each Rights Certificate, the certificate number of each
\nRights Certificate and the date of each Rights Certificate.<\/p>\n

10<\/p>\n

\n


\n<\/strong><\/p>\n

SECTION 6.<\/strong> TRANSFER, SPLIT-UP, COMBINATION AND
\nEXCHANGE OF RIGHTS CERTIFICATES; LOST, STOLEN, DESTROYED OR MUTILATED RIGHTS
\nCERTIFICATES; UNCERTIFICATED RIGHTS<\/strong><\/p>\n<\/p>\n

(a) Subject to the provisions of Sections 7(e), 11 and 15 hereof, at any time
\nafter the Distribution Date, and at or prior to the Close of Business on the
\nearlier of the Redemption Date and the Expiration Date, any Rights Certificate
\nor Rights Certificates (other than Rights Certificates representing Rights that
\nhave become null and void pursuant to Section 7(e) hereof or that have been
\nexchanged pursuant to Section 11(b) hereof) may be transferred, split up,
\ncombined or exchanged for another Rights Certificate or Rights Certificates
\nentitling the registered holder to purchase a like number of one one-hundredths
\nof a Preferred Share as the Rights Certificate or Rights Certificates
\nsurrendered then entitled such holder to purchase. Any registered holder
\ndesiring to transfer, split up, combine or exchange any Rights Certificate or
\nRights Certificates shall make such request in writing delivered to the Rights
\nAgent and shall surrender the Rights Certificate or Rights Certificates to be
\ntransferred, split up, combined or exchanged at the office of the Rights Agent
\ndesignated for such purpose. The Rights Certificates are transferable only on
\nthe registry books of the Rights Agent. Neither the Rights Agent nor the Company
\nshall be obligated to take any action whatsoever with respect to the transfer of
\nany Rights Certificate surrendered for transfer until the registered holder
\nshall have properly completed and signed the certification contained in the form
\nof assignment on the reverse side of such Rights Certificate and shall have
\nprovided such additional evidence of the identity of the Beneficial Owner (or
\nformer Beneficial Owner) or Affiliates or Associates thereof as the Company or
\nthe Rights Agent shall reasonably request. Thereupon the Rights Agent shall,
\nsubject to the provisions of Sections 7(e), 11 and 15 hereof, countersign and
\ndeliver to the Person entitled thereto a Rights Certificate or Rights
\nCertificates, as the case may be, as so requested. The Company or the Rights
\nAgent may require payment from a Rights holder of a sum sufficient to cover any
\ntax or governmental charge that may be imposed in connection with any transfer,
\nsplit-up, combination or exchange of Rights Certificates.<\/p>\n

The Rights Agent shall have no duty or obligation to take any action under
\nthis Section 6 or under any Section of this Rights Agreement which requires the
\npayment by a Rights holder of applicable taxes or governmental charges unless
\nand until it is satisfied that all such taxes and\/or charges have been paid in
\nfull.<\/p>\n

(b) Upon receipt by the Company and the Rights Agent of evidence reasonably
\nsatisfactory to them of the loss, theft, destruction or mutilation of a valid
\nRights Certificate, and, in case of such loss, theft or destruction, of
\nindemnity or security satisfactory to them, and, at the Company153s or Rights
\nAgent153s request, reimbursement to the Company and the Rights Agent of all
\nreasonable expenses incidental thereto, and upon surrender to the Rights Agent
\nand cancellation of the Rights Certificate if mutilated, the Company will make a
\nnew Rights Certificate of like tenor and deliver such new Rights Certificate to
\nthe Rights Agent for countersignature and delivery to the registered holder in
\nlieu of the Rights Certificate so lost, stolen, destroyed or mutilated.<\/p>\n

11<\/p>\n

\n

(c) Notwithstanding any other provision of this Rights Agreement to the
\ncontrary, the Company and the Rights Agent may amend this Rights Agreement to
\nprovide for uncertificated Rights in addition to or in place of Rights evidenced
\nby Rights Certificates.<\/p>\n

SECTION 7.<\/strong> EXERCISE OF RIGHTS; EXPIRATION DATE OF
\nRIGHTS<\/strong><\/p>\n<\/p>\n

(a) Subject to Section 7(e) hereof and except as otherwise provided in this
\nRights Agreement (including Section 11 hereof), each Right shall entitle the
\nregistered holder thereof, upon exercise thereof as provided in this Rights
\nAgreement, to purchase for the Purchase Price, at any time after the
\nDistribution Date and at or prior to the earlier of (i) the Close of Business on
\nthe 10th anniversary of the date of this Rights Agreement (the Close of Business
\non such date being the “Expiration Date<\/em><\/strong>“) and (ii) the
\nRedemption Date, one one-hundredth (1\/100) of a Preferred Share, subject to
\nadjustment from time to time as provided in Sections 11 and 12 hereof.<\/p>\n

(b) The registered holder of any Rights Certificate may exercise the Rights
\nevidenced thereby (except as otherwise provided in this Rights Agreement) in
\nwhole or in part at any time after the Distribution Date, upon surrender of the
\nRights Certificate with the form of election to purchase on the reverse side
\nthereof duly executed, to the Rights Agent at the office of the Rights Agent
\ndesignated for such purpose, together with payment of the Purchase Price for
\neach one one-hundredth (1\/100) of a Preferred Share as to which the Rights are
\nexercised, at or prior to the earliest of (i) the Expiration Date, (ii) the
\nRedemption Date, and (iii) the time at which such Rights are exchanged as
\nprovided in Section 11(b) hereof.<\/p>\n

(c) Upon receipt of a Rights Certificate representing exercisable Rights,
\nwith the form of election to purchase duly executed, accompanied by payment of
\nthe Purchase Price for the Preferred Shares to be purchased, together with an
\namount equal to any applicable tax or charge, by certified check, cashier153s
\ncheck or money order payable to the order of the Company, the Rights Agent shall
\nthereupon (i) either (A) promptly requisition from any transfer agent of the
\nPreferred Shares (or make available, if the Rights Agent is the transfer agent)
\ncertificates for the number of Preferred Shares to be purchased, and the Company
\nhereby irrevocably authorizes its transfer agent to comply with all such
\nrequests, or (B) if the Company shall have elected to deposit the Preferred
\nShares with a depositary agent under a depositary arrangement, promptly
\nrequisition from the depositary agent depositary receipts representing the
\nnumber of one one-hundredths (1\/100) of a Preferred Share to be purchased (in
\nwhich case certificates for the Preferred Shares to be represented by such
\nreceipts shall be deposited by the transfer agent with the depositary agent) and
\nthe Company will direct the depositary agent to comply with all such requests,
\n(ii) when necessary to comply with this Agreement, promptly requisition from the
\nCompany the amount of cash to be paid in lieu of the issuance of fractional
\nshares in accordance with Section 15 hereof, (iii) promptly after receipt of
\nsuch certificates or depositary receipts, cause the same to be delivered to or
\nupon the order of the registered holder of such Rights Certificate, registered
\nin such name or names as may be designated by such holder, and (iv) when
\nnecessary to comply with this Agreement, after receipt, promptly deliver such
\ncash to or upon the order of the registered<\/p>\n

12<\/p>\n

\n

<\/p>\n

holder of such Rights Certificate. In the event that the Company is obligated
\nto issue other securities (including Common Stock) of the Company, pay cash
\nand\/or distribute other property pursuant to Section 11(a) hereof, the Company
\nshall make all arrangements necessary so that such other securities, cash and\/or
\nother property are available for distribution by the Rights Agent, if and when
\nnecessary to comply with this Agreement.<\/p>\n

(d) In case the registered holder of any Rights Certificate shall exercise
\nfewer than all the Rights evidenced thereby, a new Rights Certificate evidencing
\nRights equivalent to the Rights remaining unexercised shall be issued by the
\nRights Agent and delivered to the registered holder of such Rights Certificate
\nor to his or her duly authorized assigns, subject to the provisions of Section 6
\nand Section 15 hereof.<\/p>\n

(e) Notwithstanding anything in this Rights Agreement to the contrary, if the
\nRights are at any time Beneficially Owned by (i) an Acquiring Person or an
\nAffiliate or Associate of an Acquiring Person, (ii) a transferee of an Acquiring
\nPerson (or of any such Associate or Affiliate) who becomes a transferee after
\nthe Acquiring Person becomes such, or (iii) a transferee of an Acquiring Person
\n(or of any such Associate or Affiliate) who becomes a transferee prior to or
\nconcurrently with the Acquiring Persons becoming such and receives such Rights
\npursuant to either (A) a transfer (whether or not for consideration) from the
\nAcquiring Person to holders of equity interests in such Acquiring Person or to
\nany Person with whom the Acquiring Person has any continuing agreement,
\narrangement or understanding regarding the transferred rights or (B) a transfer
\nwhich the Board of Directors of the Company has determined is part of an
\nagreement, arrangement or understanding which has as a primary purpose or effect
\nthe avoidance of this Section 7(e), such Rights shall be null and void and
\nnontransferable and no holder of any such Right (including any purported
\ntransferee or subsequent holder) shall have any rights whatsoever with respect
\nto such Rights, whether under any provision of this Rights Agreement or
\notherwise. No Rights Certificate shall be issued at any time upon the transfer
\nof any Rights to an Acquiring Person whose Rights would be null and void
\npursuant to the preceding sentence or any Associate or Affiliate thereof or to
\nany nominee of such Acquiring Person, Associate or Affiliate; and any Rights
\nCertificate delivered to the Rights Agent for transfer to an Acquiring Person
\nwhose Rights would be null and void pursuant to the preceding sentence shall be
\ncanceled. The Company shall notify the Rights Agent in writing when this Section
\n7(e) applies and shall use all reasonable efforts to ensure that the provisions
\nof this Section 7(e) are complied with, but neither the Company nor the Rights
\nAgent shall have any liability to any holder of any Rights Certificate or any
\nother Person as a result of the Company153s failure to make any determinations
\nwith respect to an Acquiring Person or its Affiliate or Associate, or any
\ntransferee thereof, hereunder. The Company shall give the Rights Agent written
\nnotice of the identity of any such Acquiring Person, Associate or Affiliate, or
\nthe nominee of any of the foregoing, and the Rights Agent may rely on such
\nnotice in carrying out its duties under this Agreement and shall be deemed not
\nto have any knowledge of the identity of any such Acquiring Person, Associate or
\nAffiliate, or the nominee of any of the foregoing unless and until it shall have
\nreceived such notice.<\/p>\n

(f) Notwithstanding anything in this Rights Agreement to the contrary,
\nneither the Rights Agent nor the Company shall be obligated to undertake any
\naction with respect to<\/p>\n

13<\/p>\n

\n

<\/p>\n

a registered holder of any Rights Certificates upon the occurrence of any
\npurported exercise as set forth in this Section 7 unless such registered holder
\nshall have (i) properly completed and signed the certificate contained in the
\nform of election to purchase set forth on the reverse side of the Rights
\nCertificate surrendered for such exercise and (ii) provided such additional
\nevidence of the identity of the Beneficial Owner (or former Beneficial Owner) or
\nAffiliates or Associates thereof as the Company or the Rights Agent shall
\nreasonably request.<\/p>\n

(g) The Company may temporarily suspend, for a period of time not to exceed
\n90 calendar days after the Distribution Date, the exercisability of the Rights
\nin order to prepare and file a registration statement under the Securities Act,
\non an appropriate form, with respect to the Preferred Shares purchasable upon
\nexercise of the Rights and permit such registration statement to become
\neffective; provided, however<\/em>, that no such suspension shall remain
\neffective after, and the Rights shall without any further action by the Company
\nor any other Person become exercisable immediately upon, the effectiveness of
\nsuch registration statement. Upon any such suspension, the Company shall notify
\nthe Rights Agent in writing thereof and issue a public announcement stating that
\nthe exercisability of the Rights has been temporarily suspended and shall issue
\na further public announcement at such time as the suspension is no longer in
\neffect (with prompt notice thereof to the Rights Agent including copies of such
\nannouncements). Notwithstanding any provision in this Rights Agreement to the
\ncontrary, the Rights shall not be exercisable in any jurisdiction if the
\nrequisite qualification under the blue sky or securities laws of such
\njurisdiction shall not have been obtained or the exercise of the Rights shall
\nnot be permitted under applicable law.<\/p>\n

SECTION 8.<\/strong> CANCELLATION AND DESTRUCTION OF RIGHTS
\nCERTIFICATES<\/strong><\/p>\n<\/p>\n

All Rights Certificates surrendered or presented for the purpose of exercise,
\ntransfer, split-up, combination or exchange shall, and any Rights Certificate
\nsurrendered or presented for any purpose that represents Rights that have become
\nnull and void and nontransferable pursuant to Section 7(e) hereof shall, if
\nsurrendered or presented to the Company or to any of its agents, be delivered to
\nthe Rights Agent for cancellation or in canceled form, or, if surrendered or
\npresented to the Rights Agent, shall be canceled by it, and no Rights
\nCertificates shall be issued in lieu thereof except as expressly permitted by
\nthis Rights Agreement. The Company shall deliver to the Rights Agent for
\ncancellation and retirement, and the Rights Agent shall so cancel and retire,
\nany Rights Certificate purchased or acquired by the Company. The Rights Agent
\nshall deliver all canceled Rights Certificates to the Company, or shall, at the
\nCompany153s written request, destroy such canceled Rights Certificates, and in
\nsuch case shall deliver a certificate of destruction thereof to the Company.\n<\/p>\n

SECTION 9.<\/strong> RESERVATION AND AVAILABILITY OF PREFERRED
\nSHARES<\/strong><\/p>\n<\/p>\n

(a) The Company shall cause to be reserved and kept available out of its
\nauthorized and unissued Preferred Shares or any authorized and issued Preferred
\nShares held in its treasury, free from preemptive rights or any right of first
\nrefusal, a number of Preferred Shares sufficient to permit the exercise in full
\nof all outstanding Rights.<\/p>\n

14<\/p>\n

\n

<\/p>\n

(b) In the event that there shall not be sufficient Preferred Shares
\nauthorized but unissued to permit the exercise or exchange of Rights in
\naccordance with Section 11 hereof, the Company shall take all such action as may
\nbe necessary to authorize additional Preferred Shares for issuance upon the
\nexercise or exchange of Rights pursuant to Section 11 hereof; provided<\/u>,
\nhowever<\/u>, that if the Company is unable to cause the authorization of
\nadditional Preferred Shares, then the Company shall, or if action by the
\nCompany153s shareholders is necessary to cause such authorization in lieu of
\nseeking any such authorization, the Company may, to the extent necessary and
\npermitted by applicable law and any agreements or instruments in effect prior to
\nthe Distribution Date to which it is a party, (i) upon surrender of a Right, pay
\ncash equal to the Purchase Price in lieu of issuing Preferred Shares and
\nrequiring payment therefor, (ii) upon due exercise of a Right and payment of the
\nPurchase Price for each Preferred Share as to which such Right is exercised,
\nissue equity securities having a value equal to the value of the Preferred
\nShares that otherwise would have been issuable pursuant to Section 11 hereof,
\nwhich value shall be determined by a nationally recognized investment banking
\nfirm selected by the Board of Directors of the Company, or (iii) upon due
\nexercise of a Right and payment of the Purchase Price for each Preferred Share
\nas to which such Right is exercised, distribute a combination of Preferred
\nShares, cash and\/or other equity and\/or debt securities having an aggregate
\nvalue equal to the value of the Preferred Shares that otherwise would have been
\nissuable pursuant to Section 11 hereof, which value shall be determined by a
\nnationally recognized investment banking firm selected by the Board of Directors
\nof the Company. To the extent that any legal or contractual restrictions
\n(pursuant to agreements or instruments in effect prior to the Distribution Date
\nto which it is party) prevent the Company from paying the full amount payable in
\naccordance with the foregoing sentence, the Company shall pay to holders of the
\nRights as to which such payments are being made all amounts that are not then
\nrestricted on a pro rata basis as such payments become permissible under such
\nlegal or contractual restrictions until such payments have been paid in full.\n<\/p>\n

(c) The Company shall take all such action as may be necessary to ensure that
\nall Preferred Shares delivered upon exercise or exchange of Rights shall, at the
\ntime of delivery of the certificates for such Preferred Shares (subject to
\npayment of the Purchase Price), be duly and validly authorized and issued and
\nfully paid and nonassessable shares.<\/p>\n

(d) So long as the Preferred Shares issuable upon the exercise or exchange of
\nRights are to be listed on the New York Stock Exchange, the Nasdaq Stock Market
\nor any national securities exchange, the Company shall use its commercially
\nreasonable best efforts to cause, from and after such time as the Rights become
\nexercisable or exchangeable, all Preferred Shares reserved for such issuance to
\nbe listed on the New York Stock Exchange, the Nasdaq Stock Market or such
\nsecurities exchange upon official notice of issuance.<\/p>\n

(e) The Company shall pay when due and payable any and all taxes and
\ngovernmental charges that may be payable in respect of the issuance or delivery
\nof Rights Certificates or of any Preferred Shares upon the exercise or exchange
\nof Rights. The Company shall not, however, be required to pay any tax or charge
\nthat may be payable in respect of any transfer or delivery of Rights
\nCertificates to a Person other than, or in respect of the issuance or delivery
\nof certificates representing the Preferred Shares in a name other<\/p>\n

15<\/p>\n

\n

<\/p>\n

than that of, the registered holder of the Rights Certificate evidencing
\nRights surrendered for exercise or exchange or to issue or deliver any
\ncertificates representing Preferred Shares upon the exercise or exchange of any
\nRights until any such tax or charge shall have been paid (any such tax or charge
\nbeing payable by the holder of such Rights Certificate at the time of surrender)
\nor until it has been established to the Company153s and the Rights Agent153s
\nsatisfaction that no such tax or charge is due.<\/p>\n

SECTION 10.<\/strong> PREFERRED SHARES RECORD DATE<\/strong>\n<\/p>\n<\/p>\n

Each Person in whose name any certificate for Preferred Shares is issued upon
\nthe exercise or exchange of Rights shall for all purposes be deemed to have
\nbecome the holder of record of the Preferred Shares represented thereby on, and
\nsuch certificate shall be dated, the date on which the Rights Certificate
\nevidencing such Rights was duly surrendered and payment of any Purchase Price
\n(and any applicable taxes and governmental charges ) was made; provided,
\nhowever<\/em>, that if the date of such surrender and payment is a date on which
\nthe Preferred Shares transfer books of the Company are closed, such Person shall
\nbe deemed to have become the record holder of such Preferred Shares on, and such
\ncertificate shall be dated, the next succeeding Business Day on which the
\nPreferred Shares transfer books of the Company are open. Prior to the exercise
\nof the Rights evidenced thereby, the holder of a Rights Certificate shall not be
\nentitled to any rights of a holder of Preferred Shares for which the Rights
\nshall be exercisable, including, without limitation, the right to vote, to
\nreceive dividends or other distributions or to exercise any preemptive rights,
\nand shall not be entitled to receive any notice of any proceedings of the
\nCompany, except as provided herein.<\/p>\n

SECTION 11.<\/strong> ADJUSTMENTS IN RIGHTS AFTER THERE IS AN
\nACQUIRING PERSON; EXCHANGE OF RIGHTS FOR SHARES; BUSINESS COMBINATIONS<\/strong>\n<\/p>\n<\/p>\n

(a) Upon a Person becoming an Acquiring Person, each holder of a Right,
\nexcept as provided in Section 7(e) hereof, shall thereafter have a right to
\nreceive, upon exercise thereof for the Purchase Price in accordance with the
\nterms of this Rights Agreement, such number of shares of Common Stock as shall
\nequal the result obtained by multiplying the Purchase Price by a fraction, the
\nnumerator of which is the number of one one-hundredths (1\/100) of a Preferred
\nShare for which a Right is then exercisable and the denominator of which is 50%
\nof the Market Value of the Common Stock on the date on which a Person becomes an
\nAcquiring Person. As soon as practicable after a Person becomes an Acquiring
\nPerson (provided the Company shall not have elected to make the exchange
\npermitted by Section 11(b)(i) hereof for all outstanding Rights), the Company
\nshall use its commercially reasonable efforts to:<\/p>\n

(i) prepare and file a registration statement under the Securities Act, on an
\nappropriate form, with respect to the securities purchasable upon exercise of
\nthe Rights;<\/p>\n

(ii) cause such registration statement to become effective as soon as
\npracticable after such filing;<\/p>\n

16<\/p>\n

\n

<\/p>\n

(iii) cause such registration statement to remain effective (with a
\nprospectus at all times meeting the requirements of the Securities Act) until
\nthe Expiration Date; and<\/p>\n

(iv) qualify or register the securities purchasable upon exercise of the
\nRights under the blue sky or securities laws of such jurisdictions as may be
\nnecessary or appropriate.<\/p>\n

(b) (i) The Company153s Board of Directors may, at its option, at any time
\nafter a Person becomes an Acquiring Person, mandatorily exchange all or part of
\nthe then outstanding and exercisable Rights (which shall not include Rights that
\nshall have become null and void and nontransferable pursuant to the provisions
\nof Section 7(e) hereof) for consideration per Right consisting of either (A)
\none-half of the securities that would be issuable at such time upon the exercise
\nof one Right in accordance with Section 11(a) hereof, or, if applicable, Section
\n9(b)(ii) or 9(b)(iii) hereof or (B) if applicable, the cash consideration
\nspecified in Section 9(b)(i) hereof (the consideration issuable per Right
\npursuant to this Section 11(b)(i) being the “Exchange
\nConsideration<\/em><\/strong>“). The Company153s Board of Directors may, at its
\noption, issue, in substitution for Preferred Shares, Common Shares in an amount
\nper Preferred Share equal to the Formula Number if there are sufficient Common
\nShares issued but not outstanding or authorized but unissued. If the Company153s
\nBoard of Directors elects to exchange all the Rights for the Exchange
\nConsideration pursuant to this Section 11(b)(i) prior to the physical
\ndistribution of the Rights Certificates, the Company may distribute the Exchange
\nConsideration in lieu of distributing Rights Certificates, in which case for
\npurposes of this Rights Agreement holders of Rights shall be deemed to have
\nsimultaneously received and surrendered for exchange Rights Certificates on the
\ndate of such distribution. Notwithstanding the foregoing, the Board of Directors
\nshall not be empowered to effect such exchange at any time after any Person
\n(other than the Company, any Subsidiary of the Company, any employee benefit
\nplan of the Company or any such Subsidiary, or any Person holding Common Shares
\nfor or pursuant to the terms of any such plan), together with all Affiliates and
\nAssociates of such Person, becomes the Beneficial Owner of more than 50% of the
\nCommon Shares then outstanding.<\/p>\n

(ii) Any action of the Company153s Board of Directors ordering the exchange of
\nany Rights pursuant to Section 11(b)(i) hereof shall be irrevocable and,
\nimmediately upon the taking of such action and without any further action and
\nwithout any notice, the right to exercise any such Right pursuant to Section
\n11(a) hereof shall terminate and the only right thereafter of a holder of such
\nRight shall be to receive the Exchange Consideration in exchange for each such
\nRight held by such holder or, if the Exchange Consideration shall not have been
\npaid or issued, to exercise any such Right pursuant to Section 11(c)(i) hereof.
\nThe Company shall promptly notify the Rights Agent in writing whenever it makes
\na public announcement pursuant to this Section 11(b)(ii) and give the Rights
\nAgent a copy of such announcement; provided, however<\/em>, that the failure
\nto give, or any defect in, such notice shall not affect the validity of such
\nexchange. The Company promptly shall mail a notice of any such exchange to the
\nRights Agent and to all holders of such Rights at their last addresses as they
\nappear on the registry books of the Rights Agent. Any notice that is mailed in
\nthe manner provided in this Rights Agreement shall be deemed given, whether or
\nnot the holder receives the notice. Each such notice of exchange shall state the
\nmethod by which the exchange of the Rights for the Exchange Consideration will
\nbe effected and, in the event of<\/p>\n

17<\/p>\n

\n

<\/p>\n

any partial exchange, the number of Rights that will be exchanged. Any
\npartial exchange shall be effected pro rata based on the number of Rights (other
\nthan Rights that shall have become null and void and nontransferable pursuant to
\nthe provisions of Section 7(e) hereof) held by each holder of Rights.<\/p>\n

(c) (i) In the event that, following a Distribution Date, any transactions
\nspecified in the following clause (A), (B) or (C) of this Section 11(c)(i) (each
\nsuch transaction being a “Business Combination<\/em><\/strong>“) shall
\nbe completed, directly or indirectly:<\/p>\n

(A) the Company shall consolidate with, or merge with and into, any Acquiring
\nPerson or any Affiliate or Associate of an Acquiring Person;<\/p>\n

(B) any Acquiring Person or any Affiliate or Associate of an Acquiring Person
\nshall merge with and into the Company and, in connection with such merger, all
\nor part of the Common Shares shall be changed into or exchanged for capital
\nstock or other securities of the Company or of an Acquiring Person or any
\nAffiliate or Associate of an Acquiring Person or cash or any other property; or\n<\/p>\n

(C) the Company shall sell, lease, exchange or otherwise transfer or dispose
\nof (or one or more of its Subsidiaries shall sell, lease, exchange or otherwise
\ntransfer or dispose of), in one or more transactions, the Major Part of the
\nassets of the Company and its Subsidiaries (taken as a whole) to an Acquiring
\nPerson or any Affiliate or Associate of an Acquiring Person;<\/p>\n

then, in each such case, proper provision shall be made so that each holder
\nof a Right, except as provided in Section 7(e) hereof, shall thereafter have the
\nright to receive, upon the exercise thereof for the Purchase Price in accordance
\nwith the terms of this Rights Agreement, the securities specified below (or, at
\nsuch holder153s option, the securities specified in Section 11(a) hereof if the
\nCompany is the surviving corporation in such Business Combination):<\/p>\n

(1) If the Principal Party in such Business Combination has Registered Common
\nShares outstanding, each Right shall thereafter represent the right to receive,
\nupon the exercise thereof for the Purchase Price in accordance with the terms of
\nthis Rights Agreement, such number of Registered Common Shares of such Principal
\nParty, free and clear of all liens, encumbrances or other adverse claims, as
\nshall have an aggregate Market Value equal to the result obtained by multiplying
\nthe Purchase Price by two; or<\/p>\n

(2) If the Principal Party in such Business Combination does not have
\nRegistered Common Shares outstanding, each Right shall thereafter represent the
\nright to receive, upon the exercise thereof for the Purchase Price in accordance
\nwith the terms of this Rights Agreement, at the election of the holder of such
\nRight at the time of the exercise thereof, any of:<\/p>\n

(x) such number of Common Shares of the Surviving Person in such Business
\nCombination as shall have an aggregate Book Value immediately<\/p>\n

18<\/p>\n

\n

<\/p>\n

after giving effect to such Business Combination equal to the result obtained
\nby multiplying the Purchase Price by two;<\/p>\n

(y) such number of Common Shares of the Principal Party in such Business
\nCombination (if the Principal Party is not also the Surviving Person in such
\nBusiness Combination) as shall have an aggregate Book Value immediately after
\ngiving effect to such Business Combination equal to the result obtained by
\nmultiplying the Purchase Price by two; or<\/p>\n

(z) if the Principal Party in such Business Combination is an Affiliate of
\none or more Persons which has Registered Common Shares outstanding, such number
\nof Registered Common Shares of whichever of such Affiliates of the Principal
\nParty has Registered Common Shares with the greatest aggregate Market Value on
\nthe date of completion of such Business Combination as shall have an aggregate
\nMarket Value on the date of such Business Combination equal to the result
\nobtained by multiplying the Purchase Price by two.<\/p>\n

(ii) The Company shall not complete any Business Combination unless each
\nissuer of Common Shares for which Rights may be exercised, as set forth in this
\nSection 11(c), shall have sufficient authorized Common Shares that have not been
\nissued or reserved for issuance (and that shall, when issued upon exercise
\nthereof in accordance with this Rights Agreement, be validly issued, fully paid
\nand nonassessable and free of preemptive rights, rights of first refusal or any
\nother restrictions or limitations on the transfer or ownership thereof) to
\npermit the exercise in full of the Rights in accordance with this Section 11(c)
\nand unless prior thereto:<\/p>\n

(A) a registration statement under the Securities Act, on an appropriate
\nform, with respect to the Rights and the Common Shares of such issuer
\npurchasable upon exercise of the Rights, shall be effective; and<\/p>\n

(B) the Company and each such issuer shall have:<\/p>\n

(1) executed and delivered to the Rights Agent a supplemental agreement
\nproviding for the assumption by such issuer of the obligations set forth in this
\nSection 11(c) (including the obligation of such issuer to issue Common Shares
\nupon the exercise of Rights in accordance with the terms set forth in Sections
\n11(c)(i) and 11(c)(iii)) and further providing that such issuer, at its own
\nexpense, will use its best efforts to:<\/p>\n

(x) cause a registration statement under the Securities Act, on an
\nappropriate form, with respect to the Rights and the Common Shares of such
\nissuer purchasable upon exercise of the Rights, to remain effective (with a
\nprospectus at all times meeting the requirements of the Securities Act) until
\nthe Expiration Date;<\/p>\n

(y) qualify or register the Rights and the Common Shares of such issuer
\npurchasable upon exercise of the Rights under the blue sky or securities laws of
\nsuch jurisdictions as may be necessary or appropriate; and<\/p>\n

19<\/p>\n

\n

(z) list the Rights and the Common Shares of such issuer purchasable upon
\nexercise of the Rights on each national securities exchange on which the Common
\nShares were listed prior to the completion of the Business Combination or, if
\nthe Common Shares were not listed on a national securities exchange prior to the
\ncompletion of the Business Combination, on a national securities exchange;<\/p>\n

(2) furnished to the Rights Agent a written opinion of independent counsel
\nstating that such supplemental agreement is a valid, binding and enforceable
\nagreement of such issuer; and<\/p>\n

(3) filed with the Rights Agent a certificate of a nationally recognized firm
\nof independent accountants setting forth the number of Common Shares of such
\nissuer that may be purchased upon the exercise of each Right after the
\ncompletion of such Business Combination.<\/p>\n

(iii) After completion of any Business Combination and subject to the
\nprovisions of Section 11(c)(ii) hereof, (A) each issuer of Common Shares for
\nwhich Rights may be exercised as set forth in this Section 11(c) shall be liable
\nfor, and shall assume, by virtue of such Business Combination, all the
\nobligations and duties of the Company pursuant to this Rights Agreement, (B) the
\nterm “Company” shall thereafter be deemed to refer to such issuer, (C) each such
\nissuer shall take such steps in connection with such completion as may be
\nnecessary to ensure that the provisions of this Rights Agreement (including the
\nprovisions of Sections 11(a) and 11(c) hereof) shall thereafter apply, as nearly
\nas reasonably may be, in relation to its Common Shares thereafter deliverable
\nupon the exercise of the Rights, and (D) the number of Common Shares of each
\nsuch issuer thereafter receivable upon exercise of any Right shall be subject to
\nadjustment from time to time in a manner and on terms as nearly equivalent as
\npracticable to the provisions of Sections 11 and 12 hereof, and the provisions
\nof Sections 7, 9 and 10 hereof with respect to the Preferred Shares shall apply,
\nas nearly as reasonably may be, on like terms to any such Common Shares.<\/p>\n

SECTION 12.<\/strong> CERTAIN ADJUSTMENTS<\/strong><\/p>\n<\/p>\n

(a) To preserve the actual or potential economic value of the Rights, if at
\nany time after the date of this Rights Agreement there shall be any change in
\nthe Common Stock or the Preferred Shares, whether by reason of stock dividends,
\nstock splits, recapitalizations, mergers, consolidations, combinations or
\nexchanges of securities, split-ups, split-offs, spin-offs, liquidations, other
\nsimilar changes in capitalization, any distribution or issuance of cash, assets,
\nevidences of indebtedness or subscription rights, options or warrants to holders
\nof Common Stock or Preferred Shares, as the case may be (other than distribution
\nof the Rights or regular quarterly cash dividends), or otherwise, then, in each
\nsuch event the Company153s Board of Directors shall make such appropriate
\nadjustments in the number of Preferred Shares (or the number and kind of other
\nsecurities) issuable upon exercise of each Right, the Purchase Price and
\nRedemption Price in effect at such time and the number of Rights outstanding at
\nsuch time (including the number of Rights or fractional Rights associated with
\neach share of Common Stock) such that following such adjustment such event shall
\nnot have<\/p>\n

20<\/p>\n

\n

<\/p>\n

had the effect of reducing or limiting the benefits the holders of the Rights
\nwould have had absent such event.<\/p>\n

(b) If, as a result of an adjustment made pursuant to Section 12(a) hereof,
\nthe holder of any Right thereafter exercised shall become entitled to receive
\nany securities other than Preferred Shares, then the number of such securities
\nso receivable upon exercise of any Right thereafter shall be subject to
\nadjustment from time to time in a manner and on terms as nearly equivalent as
\npracticable to the provisions of Sections 11 and 12 hereof, and the provisions
\nof Sections 7, 9 and 10 hereof with respect to the Preferred Shares shall apply,
\nas nearly as reasonably may be possible, on like terms to any such other
\nsecurities.<\/p>\n

(c) All Rights originally issued by the Company subsequent to any adjustment
\nmade to the amount of Preferred Shares or other securities relating to a Right
\nshall evidence the right to purchase, for the Purchase Price, the adjusted
\nnumber and kind of securities purchasable from time to time under this Rights
\nAgreement upon exercise of the Rights, all subject to further adjustment as
\nprovided in this Rights Agreement.<\/p>\n

(d) Irrespective of any adjustment or change in the Purchase Price or the
\nnumber of Preferred Shares or number or kind of other securities issuable upon
\nthe exercise of the Rights, the Rights Certificates theretofore and thereafter
\nissued may continue to express the terms that were expressed in the initial
\nRights Certificates issued under this Rights Agreement.<\/p>\n

(e) In any case in which action taken pursuant to Section 12(a) hereof
\nrequires that an adjustment be made effective as of a record date for a
\nspecified event, the Company may elect to defer (and shall give prompt written
\nnotice of such election to the Rights Agent), until the occurrence of such
\nevent, issuing to the holder of any Right exercised after such record date the
\nPreferred Shares and\/or other securities, if any, issuable upon such exercise
\nover and above the Preferred Shares and\/or other securities, if any, issuable
\nbefore giving effect to such adjustment; provided, however<\/em>, that the
\nCompany shall deliver to such holder a due bill or other appropriate instrument
\nevidencing such holder153s right to receive such additional securities upon the
\noccurrence of the event requiring such adjustment.<\/p>\n

SECTION 13.<\/strong> CERTIFICATE OF ADJUSTMENT<\/strong><\/p>\n<\/p>\n

Whenever an adjustment is made or any event affecting the Rights or their
\nexercisability (including without limitation an event that causes rights to
\nbecome null and void) occurs as provided in Section 11 or 12 hereof, the Company
\nshall (a) promptly prepare a certificate setting forth such adjustment and a
\nbrief, reasonably detailed statement of the facts and computations accounting
\nfor such adjustment, (b) promptly file with the Rights Agent and with each
\ntransfer agent for the Preferred Shares a copy of such certificate, and (c) mail
\na brief summary thereof to each holder of a Rights Certificate (or, prior to the
\nDistribution Date, of Common Stock) in accordance with Section 25 hereof. The
\nRights Agent shall be fully protected in relying on any such certificate and on
\nany adjustment or statements contained therein, and shall have no duty or
\nliability with respect to, and shall not<\/p>\n

21<\/p>\n

\n

<\/p>\n

be deemed to have knowledge of, any such adjustment or any such event unless
\nand until it shall have received such a certificate.<\/p>\n

SECTION 14.<\/strong> ADDITIONAL COVENANTS<\/strong><\/p>\n<\/p>\n

(a) Notwithstanding any other provision of this Rights Agreement, no
\nadjustment to the number of Preferred Shares (or fraction of a share) or other
\nsecurities for which a Right is exercisable or the number of Rights outstanding
\nor associated with each Common Share or any similar or other adjustment shall be
\nmade or be effective if such adjustment would have the effect of reducing or
\nlimiting the benefits the holders of the Rights would have had absent such
\nadjustment, including, without limitation, the benefits under Sections 11 and 12
\nhereof, unless the terms of this Rights Agreement are amended so as to preserve
\nsuch benefits.<\/p>\n

(b) The Company shall not, after the Distribution Date, except as permitted
\nby Section 26 hereof, take (or permit any Subsidiary of the Company to take) any
\naction if at the time such action is taken it is reasonably foreseeable that
\nsuch action will reduce or otherwise limit the benefits the holders of the
\nRights would have had absent such action, including, without limitation, the
\nbenefits under Sections 11 and 12 hereof. Any action taken by the Company during
\nany period after any Person becomes an Acquiring Person but prior to the
\nDistribution Date shall be null and void unless such action could be taken under
\nthis Section 14(b) from and after the Distribution Date. The Company shall not
\ncomplete any Business Combination if any issuer of Common Shares for which
\nRights may be exercised after such Business Combination in accordance with
\nSection 11(c) hereof shall have taken any action that reduces or otherwise
\nlimits the benefits the holders of the Rights would have had absent such action,
\nincluding the benefits under Sections 11 and 12 hereof.<\/p>\n

SECTION 15.<\/strong> FRACTIONAL RIGHTS AND FRACTIONAL
\nSHARES<\/strong><\/p>\n<\/p>\n

(a) The Company may, but shall not be required to, issue fractional Rights or
\ndistribute Rights Certificates that evidence fractional Rights. In lieu of such
\nfractional Rights, the Company may pay to the registered holders of the Rights
\nCertificates with regard to which such fractional Rights would otherwise be
\nissuable an amount in cash equal to the same fraction of the current market
\nvalue of a whole Right. For purposes of this Section 15(a), the current market
\nvalue of a whole Right shall be the closing price of the Rights (as determined
\npursuant to the second and third sentences of the definition of Market Value
\ncontained in Section 1 hereof) for the Trading Day immediately prior to the date
\non which such fractional Rights would have been otherwise issuable.<\/p>\n

(b) The Company may, but shall not be required to, issue fractional Preferred
\nShares upon exercise of the Rights or distribute certificates that evidence
\nfractional Preferred Shares. In lieu of fractional Preferred Shares, the Company
\nmay elect to (i) utilize a depository arrangement as provided by the terms of
\nthe Preferred Shares or (ii) in the case of a fractional Preferred Share (other
\nthan one one-hundredth (1\/100th) of a Preferred Share or any integral multiple
\nthereof), pay to the registered holders of Rights Certificates at the time such
\nRights are exercised as provided in this Rights Agreement an amount in cash
\nequal to the same fraction of the current market value of one Preferred Share,
\nif any are outstanding<\/p>\n

22<\/p>\n

\n

<\/p>\n

and publicly traded (or the Formula Number times the current market value of
\none share of Common Stock if the Preferred Shares are not outstanding and
\npublicly traded). For purposes of this Section 15(b), the current market value
\nof a Preferred Share (or share of Common Stock) shall be the closing price of a
\nPreferred Share (or share of Common Stock) (as determined pursuant to the second
\nand third sentences of the definition of Market Value contained in Section 1
\nhereof) for the Trading Day immediately prior to the date of such exercise. If,
\nas a result of an adjustment made pursuant to Section 12(a) hereof, the holder
\nof any Right thereafter exercised shall become entitled to receive any
\nsecurities other than Preferred Shares, the provisions of this Section 15(b)
\nshall apply, as nearly as reasonably may be, on like terms to such other
\nsecurities.<\/p>\n

(c) The Company may, but shall not be required to, issue fractional Common
\nShares upon exchange of Rights pursuant to Section 11(b) hereof, or to
\ndistribute certificates that evidence fractional Common Shares. In lieu of such
\nfractional Common Shares, the Company may pay to the registered holders of
\nRights Certificates with regard to which such fractional Common Shares would
\notherwise be issuable an amount in cash equal to the same fraction of the
\ncurrent Market Value of one Common Share as of the date on which a Person became
\nan Acquiring Person.<\/p>\n

(d) Each holder of Rights, by accepting the Rights, expressly waives his, her
\nor its right to receive any fractional Rights or any fractional shares upon
\nexercise of a Right, except as provided in this Section 15.<\/p>\n

(e) Whenever a payment for fractional Rights or fractional shares is to be
\nmade by the Rights Agent, the Company shall (i) promptly prepare and deliver to
\nthe Rights Agent a certificate setting forth in reasonable detail the facts
\nrelated to such payment and the prices and\/or formulas utilized in calculating
\nsuch payments, and (ii) provide sufficient monies to the Rights Agent in the
\nform of fully collected funds to make such payments. The Rights Agent shall be
\nfully protected in relying upon such a certificate and shall have no duty with
\nrespect to, and shall not be deemed to have knowledge of any payment for
\nfractional Rights or fractional shares under any Section of this Rights
\nAgreement relating to the payment of fractional Rights or fractional shares
\nunless and until the Rights Agent shall have received such a certificate and
\nsufficient monies.<\/p>\n

SECTION 16.<\/strong> RIGHTS OF ACTION<\/strong><\/p>\n<\/p>\n

(a) All rights of action in respect of this Rights Agreement, excepting the
\nrights of action given to the Rights Agent under Sections 19 and 21 hereof, are
\nvested in the respective registered holders of the Rights Certificates (and,
\nprior to the Distribution Date, the registered holders of the Common Stock), and
\nany registered holder of any Rights Certificate (or, prior to the Distribution
\nDate, of the Common Stock), without the consent of the Rights Agent or of the
\nholder of any other Rights Certificate (or, prior to the Distribution Date, of
\nthe Common Stock), may, in his, her or its own behalf and for his, her or its
\nown benefit, enforce, and may institute and maintain any suit, action or
\nproceeding against the Company to enforce, or otherwise act in respect of, his,
\nher or its right to exercise the Rights evidenced by such Rights Certificate in
\nthe manner provided in such Rights Certificate and in the Rights<\/p>\n

23<\/p>\n

\n

<\/p>\n

Agreement. Without limiting the foregoing or any remedies available to the
\nholders of Rights, it is specifically acknowledged that the holders of Rights
\nwould not have an adequate remedy at law for any breach by the Company of this
\nRights Agreement and shall be entitled to specific performance of the
\nobligations of any Person under, and injunctive relief against actual or
\nthreatened violations by the Company of the obligations of any Person subject
\nto, this Rights Agreement.<\/p>\n

(b) Any holder of Rights who prevails in an action to enforce the provisions
\nof this Rights Agreement against the Company shall be entitled to recover the
\nreasonable costs and expenses, including attorneys153 fees, incurred in such
\naction.<\/p>\n

(c) Notwithstanding anything in this Agreement to the contrary, neither the
\nCompany nor the Rights Agent shall have any liability to any holder of a Right
\nor other Person as a result of its inability to perform any of its obligations
\nunder this Rights Agreement by reason of any preliminary or permanent injunction
\nor other order, judgment, decree or ruling (whether interlocutory or final)
\nissued by a court or by a governmental, regulatory, self regulatory or
\nadministrative agency or commission, or any statute, rule, regulation or
\nexecutive order promulgated or enacted by any governmental authority,
\nprohibiting or otherwise restraining performance of such obligation;
\nprovided, however<\/em>, that the Company must use all reasonable efforts to
\nhave any such injunction, order, judgment, decree or ruling lifted or otherwise
\noverturned as soon as possible.<\/p>\n

SECTION 17.<\/strong> AGREEMENT OF RIGHTS HOLDERS<\/strong><\/p>\n<\/p>\n

Every holder of a Right, by accepting the same, consents and agrees with the
\nCompany and the Rights Agent and with every other holder of a Right that:<\/p>\n

(a) prior to the Distribution Date, the Rights will be transferable only in
\nconnection with the transfer of the Common Stock, and the Rights associated with
\neach share of Common Stock shall be automatically transferred upon the transfer
\nof each share of Common Stock;<\/p>\n

(b) after the Distribution Date, the Rights Certificates will be
\ntransferable, subject to Section 7(e) hereof, only on the registry books of the
\nRights Agent if surrendered at the office of the Rights Agent designated for
\nsuch purpose, duly endorsed or accompanied by a proper instrument of transfer
\nwith all required certifications completed; and<\/p>\n

(c) the Company and the Rights Agent may deem and treat the Person in which
\nname a Rights Certificate (or, prior to the Distribution Date, the associated
\nCommon Stock certificate) is registered as the absolute owner thereof and of the
\nRights evidenced thereby (notwithstanding any notations of ownership or writing
\non the Rights Certificates or the associated Common Stock certificate made by
\nanyone other than the Company or the Rights Agent) for all purposes whatsoever,
\nand neither the Company nor the Rights Agent shall be affected by any notice to
\nthe contrary.<\/p>\n

24<\/p>\n

\n


\n<\/strong><\/p>\n

SECTION 18.<\/strong> RIGHTS CERTIFICATE HOLDER NOT DEEMED A
\nSHAREHOLDER<\/strong><\/p>\n<\/p>\n

No holder, as such, of any Rights Certificate shall be entitled to vote or
\nreceive dividends or be deemed for any purpose the holder of the Preferred
\nShares or of any other securities of the Company that may at any time be
\nissuable on the exercise of the Rights represented thereby, nor shall anything
\ncontained in this Rights Agreement or in any Rights Certificate be construed to
\nconfer upon the holder of any Rights Certificate, as such, any of the rights of
\na shareholder of the Company, including, without limitation, any right to vote
\nfor the election of directors or on any matter submitted to shareholders at any
\nmeeting thereof, or to give or withhold consent to any corporate action, or to
\nreceive notice of meetings or other actions affecting shareholders, or to
\nreceive dividends or other distributions or subscription rights, or otherwise,
\nuntil the Right or Rights evidenced by such Rights Certificate shall have been
\nexercised in accordance with the provisions of this Rights Agreement.<\/p>\n

SECTION 19.<\/strong> CONCERNING THE RIGHTS AGENT<\/strong><\/p>\n<\/p>\n

(a) The Company agrees to pay to the Rights Agent reasonable compensation for
\nall services rendered by it under this Rights Agreement and, from time to time,
\non demand of the Rights Agent, its reasonable expenses and counsel fees and
\ndisbursements and other disbursements incurred in preparing, negotiating,
\ndelivering, amending, administering and executing this Rights Agreement and
\nexercising and performing its duties under this Rights Agreement, including any
\ntaxes or governmental charges imposed as a result of any action taken by it
\nhereunder (other than taxes on the fees payable to it). The Company also agrees
\nto indemnify the Rights Agent for, and to hold it harmless against, any loss,
\nliability, damage, judgment, fine, penalty, claim, demand, settlement, cost or
\nexpense (including without limitation, the reasonable fees and expenses of legal
\ncounsel) incurred without gross negligence, bad faith or willful misconduct on
\nthe part of the Rights Agent for any action taken, suffered or omitted by the
\nRights Agent in connection with the execution, acceptance, administration,
\nexercise or performance of its duties under this Rights Agreement, including,
\nwithout limitation, the costs and expenses of defending against any claim of
\nliability arising therefrom, directly or indirectly. The provisions of this
\nSection 19 and Section 21 below shall survive the termination of this Rights
\nAgreement, the exercise or expiration of the Rights and the resignation or
\nremoval of the Rights Agent. The costs and expenses incurred in enforcing this
\nright of indemnification by the Rights Agent shall be paid by the Company.<\/p>\n

(b) The Rights Agent shall be authorized to rely on, shall be protected and
\nshall incur no liability for or in respect of any action taken, suffered or
\nomitted by it in connection with its acceptance and administration of this
\nRights Agreement or the exercise or performance of its duties hereunder, in
\nreliance on any Rights Certificate or certificate for the Preferred Shares or
\nCommon Stock or for other securities of the Company, instrument of assignment or
\ntransfer, power of attorney, endorsement, affidavit, letter, notice, direction,
\nconsent, certificate, statement or other paper or document believed by it to be
\ngenuine and to be signed, executed and, where necessary, verified or
\nacknowledged by the proper Person or Persons, or otherwise upon the advice of
\ncounsel as set forth in Section 21. The Rights<\/p>\n

25<\/p>\n

\n

<\/p>\n

Agent shall not be deemed to have knowledge of any event of which it was
\nsupposed to receive notice thereof hereunder, and the Rights Agent shall be
\nfully protected and shall incur no liability for failing to take any action in
\nconnection therewith unless and until it has received such notice in writing.\n<\/p>\n

SECTION 20.<\/strong> MERGER OR CONSOLIDATION OR CHANGE OF
\nNAME OF RIGHTS AGENT<\/strong><\/p>\n<\/p>\n

(a) Any Person into which the Rights Agent or any successor Rights Agent may
\nbe merged or with which it may be consolidated, or any Person resulting from any
\nmerger or consolidation to which the Rights Agent or any successor Rights Agent
\nshall be a party, or any Person succeeding to the business of the Rights Agent
\nor any successor Rights Agent, shall be the successor to the Rights Agent under
\nthis Rights Agreement without the execution or filing of any paper or any
\nfurther act on the part of any of the parties to this Rights Agreement;
\nprovided, however<\/em>, that such Person would be eligible for appointment
\nas a successor Rights Agent under the provisions of Section 22 hereof. In case
\nat the time such successor Rights Agent shall succeed to the agency created by
\nthis Rights Agreement, any of the Rights Certificates shall have been
\ncountersigned but not delivered, any such successor Rights Agent may adopt the
\ncountersignature of the predecessor Rights Agent and deliver such Rights
\nCertificates so countersigned; and, in case at that time any of the Rights
\nCertificates shall not have been countersigned, any successor Rights Agent may
\ncountersign such Rights Certificates either in the name of the predecessor
\nRights Agent or in the name of the successor Rights Agent; and, in all such
\ncases, such Rights Certificates shall have the full force provided in the Rights
\nCertificates and in this Rights Agreement.<\/p>\n

(b) In case at any time the name of the Rights Agent shall be changed and at
\nsuch time any of the Rights Certificates shall have been countersigned but not
\ndelivered, the Rights Agent may adopt the countersignature under its prior name
\nand deliver Rights Certificates so countersigned; and, in case at that time any
\nof the Rights Certificates shall not have been countersigned, the Rights Agent
\nmay countersign such Rights Certificates either in its prior name or in its
\nchanged name; and, in all such cases, such Rights Certificates shall have the
\nfull force provided in the Rights Certificates and in this Rights Agreement.\n<\/p>\n

SECTION 21.<\/strong> RIGHTS AND DUTIES OF RIGHTS
\nAGENT<\/strong><\/p>\n<\/p>\n

The Rights Agent undertakes to perform only the duties and obligations,
\nexpressly imposed by this Rights Agreement (and no implied duties or
\nobligations) upon the following terms and conditions, by all of which the
\nCompany and the holders of the Rights Certificates (or, prior to the
\nDistribution Date, of the Common Stock), by their acceptance thereof, shall be
\nbound:<\/p>\n

(a) The Rights Agent may consult with legal counsel of its choice (who may be
\nlegal counsel for the Company, or may be an employee of the Rights Agent), and
\nthe advice or opinion of such counsel shall be full and complete authorization
\nand protection to the Rights Agent, and the Rights Agent shall incur no
\nliability for or in respect of any action taken, suffered or omitted by it in
\naccordance with such advice or opinion.<\/p>\n

26<\/p>\n

\n

<\/p>\n

(b) Whenever in the performance of its duties under this Rights Agreement the
\nRights Agent shall deem it necessary or desirable that any fact or matter
\n(including, without limitation, the identity of any Acquiring Person and the
\ndetermination of “current market price”) be proved or established by the Company
\nprior to taking, suffering or omitting any action under this Rights Agreement,
\nsuch fact or matter (unless other evidence in respect thereof be specifically
\nprescribed in this Rights Agreement) may be deemed to be conclusively proved and
\nestablished by a certificate signed by any one of the Chairman of the Board, any
\nVice Chairman of the Board, the Chief Executive Officer, the President, the
\nChief Financial Officer, a Vice President (whether preceded by any additional
\ntitle), the Treasurer or the Secretary of the Company and delivered to the
\nRights Agent, and such certificate shall be full and complete authorization and
\nprotection to the Rights Agent, and the Rights Agent shall incur no liability
\nfor or in respect of any action taken or suffered or omitted to be taken by it
\nunder the provisions of this Rights Agreement in reliance upon such certificate.\n<\/p>\n

(c) The Rights Agent shall be liable under this Rights Agreement to the
\nCompany and any other Person only for its own gross negligence, bad faith or
\nwillful misconduct. Anything in this Rights Agreement to the contrary
\nnotwithstanding, in no event shall the Rights Agent be liable for special,
\npunitive, indirect, incidental or consequential loss or damage of any kind
\nwhatsoever (including, but not limited to, lost profits), even if the Rights
\nAgent has been advised of the possibility or likelihood of such loss or damage.
\nAny liability of the Rights Agent under this Agreement will be limited to the
\namount of annual fees paid by the Company to the Rights Agent.<\/p>\n

(d) The Rights Agent shall not have any liability for, nor be liable for or
\nby reason of any of the statements of fact or recitals contained in this Rights
\nAgreement or in the Rights Certificates (except as to its countersignature
\nthereof) or be required to verify the same, but all such statements and recitals
\nare and shall be deemed to have been made by the Company only.<\/p>\n

(e) The Rights Agent shall not have any liability for, nor be under any
\nresponsibility in respect of the validity of this Rights Agreement or the
\nexecution and delivery hereof (except the due execution of this Rights Agreement
\nby the Rights Agent) or in respect of the validity or execution of any Rights
\nCertificate (except its countersignature thereof); it shall not be responsible
\nfor any breach by the Company of any covenant or condition contained in this
\nRights Agreement or in any Rights Certificate; it shall not be responsible for
\nany change or adjustment in the terms of the Rights including any adjustment
\nrequired under the provisions of Section 11 or 12 hereof or for the manner,
\nmethod or amount of any such adjustment or the ascertaining of the existence of
\nfacts that would require any such adjustment (except with respect to the
\nexercise of Rights evidenced by Rights Certificates after actual notice of any
\nsuch adjustment, upon which the Rights Agent may rely); it shall not by any act
\nunder this Rights Agreement be deemed to make any representation or warranty as
\nto the authorization or reservation of any Preferred Shares or Common Stock to
\nbe issued pursuant to this Rights Agreement or any Rights Certificate or as to
\nwhether any Preferred Shares or Common Stock will, when so issued, be validly
\nauthorized and issued, fully paid and nonassessable; and it shall not be
\nresponsible for any<\/p>\n

27<\/p>\n

\n

<\/p>\n

change in the exercisability of the Rights (including the Rights becoming
\nnull and void hereunder).<\/p>\n

(f) The Company agrees that it shall perform, execute, acknowledge and
\ndeliver or cause to be performed, executed, acknowledged and delivered all such
\nfurther and other acts, instruments and assurances as may reasonably be required
\nby the Rights Agent for the carrying out or performing by the Rights Agent of
\nthe provisions of this Rights Agreement.<\/p>\n

(g) The Rights Agent is hereby authorized and directed to accept instructions
\nwith respect to the performance of its duties under this Rights Agreement from
\nany one of the Chairman of the Board, any Vice Chairman of the Board, the Chief
\nExecutive Officer, the President, the Chief Financial Officer, a Vice President
\n(whether preceded by any additional title), the Treasurer or the Secretary of
\nthe Company, and to apply to such officers for advice or instructions in
\nconnection with its duties, and such advice or instructions shall be full
\nauthorization and protection to the Rights Agent and the Rights Agent shall
\nincur no liability (i) for or in respect of any action taken, suffered or
\nomitted by it, in accordance with the advice or instructions of any such officer
\nor (ii) in failing to take action prior to receiving such advice or instruction.
\nThe Rights Agent shall be fully authorized and protected in relying upon the
\nmost recent instructions received by any such officer. Any application by the
\nRights Agent for written instructions from the Company may, at the option of the
\nRights Agent, set forth in writing any action proposed to be taken, suffered or
\nomitted by the Rights Agent under this Rights Agreement and the date on and\/or
\nafter which such action shall be taken or suffered or such omission shall be
\neffective. The Rights Agent shall not be liable for any action taken or suffered
\nby, or omission or, the Rights Agent in accordance with a proposal included in
\nany such application on or after the date specified therein (which date shall
\nnot be less than five Business Days after the date any such officer of the
\nCompany actually receives such application, unless any such officer shall have
\nconsented in writing to an earlier date) unless, prior to taking, suffering or
\nomitting any such action (or the effective date in case of an omission), the
\nRights Agent has received written instructions in response to such application
\nspecifying the action to be taken, suffered or omitted.<\/p>\n

(h) The Rights Agent and any shareholder, Affiliate, director, officer or
\nemployee of the Rights Agent may buy, sell or deal in any of the Rights or other
\nsecurities of the Company or become pecuniarily interested in any transaction in
\nwhich the Company may be interested, or contract with or lend money to the
\nCompany or otherwise act as fully and freely as though the Rights Agent were not
\nthe Rights Agent under this Rights Agreement. Nothing in this Rights Agreement
\nshall preclude the Rights Agent or any such shareholder, Affiliate, director,
\nofficer or employee from acting in any other capacity for the Company or for any
\nother Person.<\/p>\n

(i) The Rights Agent may execute and exercise any of the rights or powers
\nhereby vested in it or perform any duty under this Rights Agreement either
\nitself (through its directors, officers and employees) or by or through its
\nattorneys or agents, and the Rights Agent shall not be answerable or accountable
\nfor any act, omission, default, neglect or misconduct of any such attorneys or
\nagents or for any loss to the Company or any other Person resulting from any
\nsuch act, omission, default, neglect or misconduct absent any gross<\/p>\n

28<\/p>\n

\n

<\/p>\n

negligence, bad faith or willful misconduct in the selection and continued
\nemployment thereof.<\/p>\n

(j) No provision of this Rights Agreement shall require the Rights Agent to
\nexpend or risk its own funds or otherwise incur any financial liability in the
\nperformance of any of its duties hereunder or in the exercise of its rights if
\nit believes that repayment of such funds or adequate indemnification against
\nsuch risk or liability is not reasonably assured to it.<\/p>\n

(k) If, with respect to any Rights Certificate surrendered to the Rights
\nAgent for exercise or transfer, the certificate attached to the form of
\nassignment or form of election to purchase, as the case may be, has not been
\ncompleted, the Company and the Rights Agent will deem the beneficial owner of
\nthe rights evidenced by such Rights Certificate to be an Acquiring Person or an
\nAffiliate or Associate thereof and such assignment or election to purchase will
\nnot be honored.<\/p>\n

SECTION 22.<\/strong> CHANGE OF RIGHTS AGENT<\/strong><\/p>\n<\/p>\n

The Rights Agent or any successor Rights Agent may resign and be discharged
\nfrom its duties under this Rights Agreement upon thirty (30) days153 notice in
\nwriting mailed to the Company and to each transfer agent of the Common Stock or
\nthe Preferred Shares known to the Rights Agent by registered or certified mail,
\nand to the holders of the Rights Certificates (or, prior to the Distribution
\nDate, of the Common Stock) by first-class mail. In the event the transfer agency
\nrelationship in effect between the Company and the Rights Agent terminates, the
\nRights Agent will be deemed to have resigned automatically and be discharged
\nfrom its duties under this Agreement as of the effective date of such
\ntermination, and the Company shall be responsible for sending any required
\nnotice. The Company may remove the Rights Agent or any successor Rights Agent
\nupon thirty (30) days153 notice in writing mailed to the Rights Agent or successor
\nRights Agent, as the case may be, and to each transfer agent of the Common Stock
\nor the Preferred Shares by registered or certified mail, and to the holders of
\nthe Rights Certificates (or, prior to the Distribution Date, of the Common
\nStock) by first-class mail. If the Rights Agent shall resign or be removed or
\nshall otherwise become incapable of acting, the Company shall appoint a
\nsuccessor to the Rights Agent. If the Company shall fail to make such
\nappointment within a period of thirty (30) days after giving notice of such
\nremoval or after it has been notified in writing of such resignation or
\nincapacity by the resigning or incapacitated Rights Agent or by the holder of a
\nRights Certificate (or, prior to the Distribution Date, of Common Stock) (who
\nshall, with such notice, submit his, her or its Rights Certificate or, prior to
\nthe Distribution Date, the certificate representing his, her or its Common
\nStock, for inspection by the Company), then the registered holder of any Rights
\nCertificate (or, prior to the Distribution Date, of the Common Stock) may apply
\nto any court of competent jurisdiction for the appointment of a new Rights
\nAgent. Any successor Rights Agent, whether appointed by the Company or by such a
\ncourt, shall be either (A) a Person in good standing organized and doing
\nbusiness under the laws of the United States or of any state of the United
\nStates so long as such Person is subject to supervision or examination by
\nfederal or state authority and which has at the time of its appointment as
\nRights Agent a combined capital and surplus of at least fifty million dollars
\n($50,000,000), or (B) an Affiliate of a Person described in clause (A) of this\n<\/p>\n

29<\/p>\n

\n

<\/p>\n

sentence. After appointment, the successor Rights Agent shall be vested with
\nthe same powers, rights, duties and responsibilities as if it had been
\noriginally named as Rights Agent without further act or deed; provided,
\nhowever<\/em>, that the predecessor Rights Agent shall deliver and transfer to
\nthe successor Rights Agent any property at the time held by it under this Rights
\nAgreement, and execute and deliver any further assurance, conveyance, act or
\ndeed necessary for the purpose. Not later than the effective date of any such
\nappointment, the Company shall file notice thereof in writing with the
\npredecessor Rights Agent and each transfer agent of the Common Stock and the
\nPreferred Shares, and mail a notice thereof in writing to the registered holders
\nof the Rights Certificates (or, prior to the Distribution Date, of the Common
\nStock). Failure to give any notice provided for in this Section 22, however, or
\nany defect therein shall not affect the legality or validity of the resignation
\nor removal of the Rights Agent or the appointment of the successor Rights Agent,
\nas the case may be.<\/p>\n

SECTION 23.<\/strong> ISSUANCE OF ADDITIONAL RIGHTS AND RIGHTS
\nCERTIFICATES<\/strong><\/p>\n<\/p>\n

Notwithstanding any of the provisions of this Rights Agreement or of the
\nRights to the contrary, the Company may, at its option, issue new Rights
\nCertificates evidencing Rights in such form as may be approved by its Board of
\nDirectors to reflect any adjustment or change made in accordance with the
\nprovisions of this Rights Agreement. In addition, in connection with the
\nissuance or sale of Common Stock following the Distribution Date and prior to
\nthe earlier of the Redemption Date and the Expiration Date, the Company (a)
\nshall issue, with respect to Common Stock so issued or sold pursuant to the
\nexercise of stock options or under any employee plan or arrangement, or upon the
\nexercise, conversion or exchange of securities, notes or debentures issued by
\nthe Company, and (b) may issue, in any other case, if deemed necessary or
\nappropriate by the Company153s Board of Directors, Rights Certificates
\nrepresenting the appropriate number of Rights in connection with such issuance
\nor sale; provided, however<\/em>, that (i) no such Rights Certificate shall
\nbe issued if, and to the extent that, the Company shall be advised by counsel
\nthat such issuance would create a significant risk of material adverse tax
\nconsequences to the Company or the Person to whom such Rights Certificate would
\nbe issued, (ii) no such Rights Certificate shall be issued if, and to the extent
\nthat, appropriate adjustment shall otherwise have been made in lieu of the
\nissuance thereof, and (iii) no such Rights Certificate shall be issued to an
\nAcquiring Person or an Affiliate or Associate of any Acquiring Person.<\/p>\n

SECTION 24.<\/strong> REDEMPTION AND TERMINATION<\/strong><\/p>\n<\/p>\n

(a) The Company153s Board of Directors may, at its option, at any time prior to
\nthe earlier of (i) such time as any Person becomes an Acquiring Person and (ii)
\nthe Close of Business on the Expiration Date, order the redemption of all, but
\nnot fewer than all, the then outstanding Rights at the Redemption Price (the
\ndate of such redemption being the “Redemption Date<\/em><\/strong>“),
\nand the Company, at its option, may pay the Redemption Price either in cash or
\nin Common Shares or other securities of the Company deemed by the Board of
\nDirectors, in the exercise of its sole discretion, to be at least equivalent in
\nvalue to the Redemption Price. The redemption of the Rights by the Board of
\nDirectors may be made<\/p>\n

30<\/p>\n

\n

<\/p>\n

effective at such time, on such basis and with such conditions as the Board
\nof Directors in its sole discretion may establish.<\/p>\n

(b) Immediately upon the action of the Company153s Board of Directors ordering
\nthe redemption of the Rights, and without any further action and without any
\nnotice, the right to exercise the Rights will terminate and the only right
\nthereafter of the holders of Rights shall be to receive the Redemption Price.
\nWithin ten (10) Business Days after the action of the Company153s Board of
\nDirectors ordering the redemption of the Rights, the Company shall give notice
\nof such redemption to the Rights Agent and to the holders of the then
\noutstanding Rights by mailing such notice to all such holders at their last
\naddresses as they appear upon the registry books of the Rights Agent or, prior
\nto the Distribution Date, on the registry books of the transfer agent for the
\nCommon Stock. Each such notice of redemption will state the method by which
\npayment of the Redemption Price will be made. The notice, if mailed in the
\nmanner provided in this Rights Agreement, shall be conclusively presumed to have
\nbeen duly given, whether or not the holder of Rights receives such notice. In
\nany case, failure to give such notice by mail, or any defect in the notice, to
\nany particular holder of Rights shall not affect the sufficiency of the notice
\nto other holders of Rights.<\/p>\n

SECTION 25.<\/strong> NOTICES<\/strong><\/p>\n<\/p>\n

Notices or demands authorized by this Rights Agreement to be given or made by
\nthe Rights Agent or by the holder of a Rights Certificate (or, prior to the
\nDistribution Date, of Common Stock) to or on the Company shall be sufficiently
\ngiven or made if delivered by facsimile transmission (provided confirmation of
\nreceipt is received immediately thereafter) or sent by first-class mail or
\novernight delivery service, postage prepaid, addressed (until another address is
\nfiled in writing with the Rights Agent) as follows:<\/p>\n

Digimarc Corporation<\/p>\n

9405 SW Gemini Drive<\/p>\n

Beaverton, OR 97008<\/p>\n

Attention: Secretary<\/p>\n

Subject to the provisions of Section 22 hereof, notices or demands authorized
\nby this Rights Agreement to be given or made by the Company or by the holder of
\na Rights Certificate (or, prior to the Distribution Date, of Common Stock) to or
\non the Rights Agent shall be sufficiently given or made if delivered by
\nfacsimile transmission (provided confirmation of receipt is received immediately
\nthereafter) or sent by first-class mail or overnight delivery service, postage
\nprepaid, addressed (until another address is filed in writing with the Company)
\nas follows:<\/p>\n

Computershare Trust Company, N.A.
\n250 Royall Street
\nCanton, MA 02021
\nAttention: Client Services<\/p>\n

31<\/p>\n

\n

Notices or demands authorized by this Rights Agreement to be given or made by
\nthe Company or the Rights Agent to any holder of a Rights Certificate (or, prior
\nto the Distribution Date, of Common Stock) shall be sufficiently given or made
\nif sent by first-class mail, postage prepaid, addressed to such holder at such
\nholder153s address as shown on the registry books of the Rights Agent or, prior to
\nthe Distribution Date, on the registry books of the transfer agent for the
\nCommon Stock.<\/p>\n

SECTION 26.<\/strong> SUPPLEMENTS AND AMENDMENTS<\/strong><\/p>\n<\/p>\n

At any time prior to the time any Person becomes an Acquiring Person and
\nsubject to the last two sentences of this Section 26, the Company may in its
\nsole and absolute discretion, and the Rights Agent shall if the Company so
\ndirects, subject to the other terms and conditions of this Rights Agreement,
\nsupplement or amend any provision of this Rights Agreement (including, without
\nlimitation, the date on which the Distribution Date or the Expiration Date shall
\noccur, the amount of the Purchase Price, the definition of “Acquiring Person,”
\nthe time during which the Rights may be redeemed pursuant to Section 24 hereof
\nor any provision of the Certificate of Designation) without the approval of any
\nholder of the Rights, which amendment or supplement shall be effective as of the
\ndate of execution of such amendment or supplement by the Company. From and after
\nthe time any Person becomes an Acquiring Person and subject to applicable law
\nand the last two sentences of this Section 26, the Company may in its sole and
\nabsolute discretion, and the Rights Agent shall if the Company so directs, amend
\nthis Rights Agreement without the approval of any holder of Rights Certificates
\nto (a) cure any ambiguity or correct or supplement any provision contained in
\nthis Rights Agreement that may be defective or inconsistent with any other
\nprovision of this Rights Agreement or (b) make any other provision in regard to
\nmatters or questions arising under this Rights Agreement that the Company may
\ndeem necessary or desirable and that shall not adversely affect the interests of
\nthe Rights Agent or the holders of Rights Certificates (other than an Acquiring
\nPerson or an Affiliate or Associate of an Acquiring Person), which amendment
\nshall be effective as of the date of execution of such amendment by the Company.
\nAny supplement or amendment adopted during any period after any Person has
\nbecome an Acquiring Person but prior to the Distribution Date shall be null and
\nvoid unless such supplement or amendment could have been adopted under the prior
\nsentence from and after the Distribution Date. Upon the receipt of a certificate
\nfrom an appropriate officer of the Company which states that the proposed
\nsupplement or amendment is in compliance with the terms of this Section 26, the
\nRights Agent shall acknowledge such supplement or amendment. In addition,
\nnotwithstanding anything to the contrary contained in this Rights Agreement, no
\nsupplement or amendment to this Rights Agreement shall be made which reduces the
\nRedemption Price (except as required by Section 12(a) hereof). Any supplement or
\namendment that affects the Rights Agent153s own rights, duties, obligations or
\nimmunities under this Rights Agreement shall not be effective until such
\nsupplement or amendment has been executed by each of the Company and the Rights
\nAgent.<\/p>\n

32<\/p>\n

\n


\n<\/strong><\/p>\n

SECTION 27.<\/strong> SUCCESSORS<\/strong><\/p>\n<\/p>\n

All the covenants and provisions of this Rights Agreement by or for the
\nbenefit of the Company or the Rights Agent shall bind and inure to the benefit
\nof their respective successors and assigns under this Rights Agreement.<\/p>\n

SECTION 28.<\/strong> BENEFITS OF THIS RIGHTS AGREEMENT;
\nDETERMINATIONS AND ACTIONS BY THE COMPANY153S BOARD OF DIRECTORS<\/strong><\/p>\n<\/p>\n

(a) Nothing in this Rights Agreement shall be construed to give to any Person
\nother than the Company, the Rights Agent and the registered holders of the
\nRights Certificates (and, prior to the Distribution Date, of the Common Stock)
\nany legal or equitable right, remedy or claim under this Rights Agreement;
\nprovided, however<\/em>, that this Rights Agreement shall be for the sole and
\nexclusive benefit of the Company, the Rights Agent and the registered holders of
\nthe Rights Certificates (and, prior to the Distribution Date, of the Common
\nStock).<\/p>\n

(b) Except as explicitly otherwise provided in this Rights Agreement, the
\nCompany153s Board of Directors shall have the exclusive power and authority to
\nadminister this Rights Agreement and to exercise all rights and powers
\nspecifically granted to the Company153s Board of Directors or to the Company, or
\nas may be necessary or advisable in the administration of this Rights Agreement,
\nincluding, without limitation, the right and power to (i) interpret the
\nprovisions of this Rights Agreement and (ii) make all determinations or
\ncalculations deemed necessary or advisable for the administration of this Rights
\nAgreement (including, without limitation, a determination to redeem or not
\nredeem the Rights or to amend this Rights Agreement and a determination of
\nwhether there is an Acquiring Person). All such actions, calculations,
\ninterpretations and determinations (including, for purposes of clause (y) below,
\nall omissions with respect to the foregoing) that are done or made by the Board
\nof Directors in good faith, shall (x) be final, conclusive and binding on the
\nCompany, the Rights Agent, the holders of the Rights, as such, and all other
\nPersons, and (y) not subject the Board of Directors to any liability to the
\nholders of the Rights. The Rights Agent shall always be entitled to assume that
\nthe Board of Directors acted in good faith and shall be fully protected and
\nincur no liability in reliance thereon.<\/p>\n

(c) Nothing contained in this Rights Agreement shall be deemed to be in
\nderogation of the obligation of the Board of Directors to exercise its fiduciary
\nduty. Without limiting the foregoing, nothing contained herein shall be
\nconstrued to suggest or imply that the Board of Directors shall not be entitled
\nto reject any tender offer or other acquisition proposal, or to recommend that
\nholders of Common Stock reject any tender offer, or to take any other action
\n(including the commencement, prosecution, defense or settlement of any
\nlitigation and the submission of additional or alternative offers or other
\nproposals) with respect to any tender offer or other acquisition proposal that
\nthe Board of Directors believes is necessary or appropriate in the exercise of
\nsuch fiduciary duty.<\/p>\n

33<\/p>\n

\n


\n<\/strong><\/p>\n

SECTION 29.<\/strong> SEVERABILITY<\/strong><\/p>\n<\/p>\n

If any term, provision, covenant or restriction of this Rights Agreement is
\nheld by a court of competent jurisdiction or other authority to be invalid, void
\nor unenforceable, the remainder of the terms, provisions, covenants and
\nrestrictions of this Rights Agreement shall remain in full force and effect and
\nshall in no way be affected, impaired or invalidated.<\/p>\n

SECTION 30.<\/strong> GOVERNING LAW<\/strong><\/p>\n<\/p>\n

This Rights Agreement, each Right and each Rights Certificate issued under
\nthis Rights Agreement shall be deemed to be a contract made under the laws of
\nthe state of Delaware and for all purposes shall be governed by, and construed
\nin accordance with the laws of the State of Delaware applicable to contracts to
\nbe made and performed entirely within the State of Delaware.<\/p>\n

SECTION 31.<\/strong> COUNTERPARTS; EFFECTIVENESS<\/strong><\/p>\n<\/p>\n

This Rights Agreement may be executed in any number of counterparts, each of
\nwhich shall for all purposes be deemed to be an original, and all of which shall
\ntogether constitute but one and the same instrument. This Rights Agreement shall
\nbe effective as of the date of this Rights Agreement, upon the time of the
\ncompletion of the DMRC Merger on such date.<\/p>\n

SECTION 32.<\/strong> DESCRIPTIVE HEADINGS<\/strong><\/p>\n<\/p>\n

Descriptive headings of the several Sections of this Rights Agreement are
\ninserted for convenience only and shall not control or affect the meaning or
\nconstruction of any of the provisions of this Rights Agreement.<\/p>\n

SECTION 33.<\/strong> FORCE MAJEURE<\/strong><\/p>\n

Notwithstanding anything to the contrary contained herein, the Rights Agent
\nshall not be liable for any delays or failures in performance resulting from
\nacts beyond its reasonable control including, without limitation, acts of God,
\nterrorist acts, shortage of supply, breakdowns or malfunctions, or loss of data
\ndue to power failures or mechanical difficulties with information storage or
\nretrieval systems, labor difficulties, war, or civil unrest.<\/p>\n

34<\/p>\n

\n

<\/p>\n

IN WITNESS WHEREOF, the parties hereto have caused this Rights Agreement to
\nbe duly executed as of the day and year first above written.<\/p>\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
<\/td>\n\n

DMRC CORPORATION<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n<\/tr>\n
<\/td>\n<\/td>\n<\/tr>\n
<\/td>\n\n

By:<\/p>\n<\/td>\n

\n

\/s\/ Robert Chamness<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
<\/td>\n<\/td>\n\n

Name: Robert Chamness<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n\n

Its: Chief Legal Officer and Secretary<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n<\/tr>\n
<\/td>\n<\/td>\n<\/tr>\n
<\/td>\n\n

COMPUTERSHARE TRUST COMPANY, N.A.,
\nas Rights Agent<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n<\/tr>\n
<\/td>\n<\/td>\n<\/tr>\n
<\/td>\n\n

By:<\/p>\n<\/td>\n

\n

\/s\/ Michael J. Lang<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
<\/td>\n<\/td>\n\n

Name: Michael J. Lang<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n\n

Its: Senior Vice President<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

35<\/p>\n

\n

<\/p>\n

EXHIBIT INDEX<\/strong><\/p>\n\n\n\n\n\n\n\n\n\n
\n

Exhibit<\/strong><\/p>\n<\/td>\n

<\/td>\n\n

Description<\/strong><\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
\n

A<\/p>\n<\/td>\n

<\/td>\n\n

Certificate of Designation<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
\n

B<\/p>\n<\/td>\n

<\/td>\n\n

Form of Rights Certificate<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
\n

C<\/p>\n<\/td>\n

<\/td>\n\n

Summary of Rights to Purchase Preferred Shares<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

\n

<\/p>\n

EXHIBIT A<\/strong><\/p>\n

Certificate of Designation<\/strong><\/p>\n

1.<\/strong> Designation of Rights and Preferences of Series R
\nParticipating Cumulative Preferred Stock<\/strong><\/p>\n<\/p>\n

The following series of Preferred Stock is hereby designated, which series
\nshall have the rights, preferences and privileges and limitations set forth
\nbelow:<\/p>\n

1.1<\/strong> Designation of Series R Participating Cumulative
\nPreferred Stock<\/strong><\/p>\n<\/p>\n

The shares of such series shall be designated the “Series R Participating
\nCumulative Preferred Stock” (the “Series R Preferred Stock”), $0.001 par value
\nper share. The number of shares initially constituting the Series R Preferred
\nStock shall be 500,000. Such number of shares may be decreased by resolution of
\nthe Board of Directors; provided, however<\/em>, that no decrease shall
\nreduce the number of shares of Series R Preferred Stock to a number less than
\nthe number of shares then outstanding plus the number of shares reserved for
\nissuance upon the exercise of outstanding options, rights or warrants or upon
\nthe conversion of any outstanding securities issued by the Corporation
\nconvertible into Series R Preferred Stock.<\/p>\n

1.2<\/strong> Dividends and Distributions<\/strong><\/p>\n<\/p>\n

(a) Subject to the prior and superior rights of the holders of shares of any
\nother series of Preferred Stock or other class of capital stock of the
\nCorporation ranking prior and superior to the shares of Series R Preferred Stock
\nwith respect to dividends, the holders of shares of Series R Preferred Stock
\nshall be entitled to receive, when, as, and if declared by the Board of
\nDirectors, out of the assets of the Corporation legally available therefor,
\nquarterly dividends payable in cash on the last day of each fiscal quarter in
\neach year, or such other dates as the Corporation153s Board of Directors shall
\napprove (each such date being referred to in this Designation as a “Quarterly
\nDividend Payment Date”), commencing on the first Quarterly Dividend Payment Date
\nafter the first issuance of a share or a fraction of a share of Series R
\nPreferred Stock, in an amount per share (rounded to the nearest cent) equal to
\nthe greater of (i) $0.001 and (ii) the Formula Number (as hereinafter defined)
\nthen in effect times the cash dividends then to be paid on each share of Common
\nStock. In addition, if the Corporation shall pay any dividend or make any
\ndistribution on the Common Stock payable in assets, securities or other forms of
\nnoncash consideration (other than dividends or distributions solely in shares of
\nCommon Stock), then, in each such case, the Corporation shall simultaneously pay
\nor make on each outstanding whole share of Series R Preferred Stock a dividend
\nor distribution in like kind equal to the Formula Number then in effect times
\nsuch dividend or distribution on each share of Common Stock. As used in this
\nDesignation and in the Rights Agreement, the “Formula Number” shall be 100;
\nprovided, however<\/em>, that if at any time after the completion of the DMRC
\nMerger the Corporation shall (i) declare or pay any dividend on the Common Stock
\npayable in shares of Common Stock or make any distribution on the Common Stock
\nin shares of Common Stock, (ii) subdivide (by a stock split or otherwise) the
\noutstanding shares of Common Stock into a larger number of shares of<\/p>\n

A-1<\/p>\n

\n

<\/p>\n

Common Stock, or (iii) combine (by a reverse stock split or otherwise) the
\noutstanding shares of Common Stock into a smaller number of shares of Common
\nStock, then in each such event the Formula Number shall be adjusted to a number
\ndetermined by multiplying the Formula Number in effect immediately prior to such
\nevent by a fraction, the numerator of which is the number of shares of Common
\nStock that are outstanding immediately after such event and the denominator of
\nwhich is the number of shares of Common Stock that are outstanding immediately
\nprior to such event (and rounding the result to the nearest whole number); and
\nprovided further<\/em>, that if at any time after the Completion of the DMRC
\nMerger the Corporation shall issue any shares of its capital stock in a merger,
\nreclassification or change of the outstanding shares of Common Stock, then in
\neach such event the Formula Number shall be appropriately adjusted to reflect
\nsuch merger, reclassification or change so that each share of Preferred Stock
\ncontinues to be the economic equivalent of a Formula Number of shares of Common
\nStock prior to such merger, reclassification or change.<\/p>\n

(b) The Corporation shall declare a dividend or distribution on the Series R
\nPreferred Stock as provided in Section 1.2(a) immediately prior to or at the
\nsame time it declares a dividend or distribution on the Common Stock (other than
\na dividend or distribution solely in shares of Common Stock); provided,
\nhowever<\/em>, that in the event no dividend or distribution (other than a
\ndividend or distribution in shares of Common Stock) shall have been declared on
\nthe Common Stock during the period between any Quarterly Dividend Payment Date
\nand the next subsequent Quarterly Dividend Payment Date, a dividend of $0.001
\nper share on the Series R Preferred Stock shall nevertheless be payable on such
\nsubsequent Quarterly Dividend Payment Date. The Corporation153s Board of Directors
\nmay fix a record date for the determination of holders of shares of Series R
\nPreferred Stock entitled to receive a dividend or distribution declared thereon,
\nwhich record date shall be the same as the record date for any corresponding
\ndividend or distribution on the Common Stock and which shall not be more than 60
\ndays prior to the date fixed for payment thereof.<\/p>\n

(c) Dividends shall begin to accrue and be cumulative on outstanding shares
\nof Series R Preferred Stock from and after the Quarterly Dividend Payment Date
\nnext preceding the date of original issue of such shares of Series R Preferred
\nStock; provided, however<\/em>, that dividends on such shares that are
\noriginally issued after the record date for the determination of holders of
\nshares of Series R Preferred Stock entitled to receive a quarterly dividend on
\nor prior to the next succeeding Quarterly Dividend Payment Date shall begin to
\naccrue and be cumulative from and after such Quarterly Dividend Payment Date.
\nNotwithstanding the foregoing, dividends on shares of Series R Preferred Stock
\nthat are originally issued prior to the record date for the determination of
\nholders of shares of Series R Preferred Stock entitled to receive a quarterly
\ndividend on or prior to the first Quarterly Dividend Payment Date shall be
\ncalculated as if cumulative from and after the last day of the fiscal quarter
\n(or such other Quarterly Dividend Payment Date as the Corporation153s Board of
\nDirectors shall approve) next preceding the date of original issuance of such
\nshares. Accrued but unpaid dividends shall not bear interest. Dividends paid on
\nthe shares of Series R Preferred Stock in an amount less than the total amount
\nof such dividends at the time accrued and payable on such shares shall be
\nallocated pro rata on a share-by-share basis among all such shares at the time
\noutstanding.<\/p>\n

A-2<\/p>\n

\n

<\/p>\n

(d) So long as any shares of Series R Preferred Stock are outstanding, no
\ndividends or other distributions shall be declared, paid or distributed, or set
\naside for payment or distribution, on the Common Stock unless, in each case, the
\ndividend required by this Section 1.2 to be declared on the Series R Preferred
\nStock shall have been declared.<\/p>\n

(e) The holders of shares of Series R Preferred Stock shall not be entitled
\nto receive any dividends or other distributions except as provided in this
\nDesignation.<\/p>\n

1.3<\/strong> Voting Rights<\/strong><\/p>\n<\/p>\n

The holders of shares of Series R Preferred Stock shall have the following
\nvoting rights:<\/p>\n

(a) Each holder of Series R Preferred Stock shall be entitled to a number of
\nvotes equal to the Formula Number then in effect for each share of Series R
\nPreferred Stock held of record on each matter on which holders of the Common
\nStock or stockholders generally are entitled to vote, multiplied by the maximum
\nnumber of votes per share that any holders of the Common Stock or stockholders
\ngenerally then have with respect to such matter (assuming any holding period or
\nother requirement to vote a greater number of shares is satisfied).<\/p>\n

(b) Except as otherwise provided in this Designation or by applicable law,
\nthe holders of shares of Series R Preferred Stock and the holders of shares of
\nCommon Stock and any other capital stock of the Corporation having general
\nvoting rights shall vote together as one class for the election of directors of
\nthe Corporation and on all other matters submitted to a vote of stockholders of
\nthe Corporation.<\/p>\n

(c) Except as provided in this Designation or by applicable law, holders of
\nSeries R Preferred Stock shall have no special voting rights and their consent
\nshall not be required (except to the extent they are entitled to vote with
\nholders of Common Stock as set forth in this Designation) for authorizing or
\ntaking any corporate action.<\/p>\n

1.4<\/strong> Certain Restrictions<\/strong><\/p>\n<\/p>\n

(a) Whenever quarterly dividends or other dividends or distributions payable
\non the Series R Preferred Stock as provided in Section 1.2 are in arrears,
\nthereafter and until all accrued and unpaid dividends and distributions, whether
\nor not declared, on shares of Series R Preferred Stock outstanding shall have
\nbeen paid in full, the Corporation shall not:<\/p>\n

(i) declare or pay dividends on, make any other distributions on, or redeem
\nor purchase or otherwise acquire for consideration any shares of stock ranking
\njunior (either as to dividends or upon liquidation, dissolution or winding up)
\nto the Series R Preferred Stock;<\/p>\n

(ii) declare or pay dividends on or make any other distributions on any
\nshares of stock ranking on a parity (either as to dividends or upon liquidation,\n<\/p>\n

A-3<\/p>\n

\n

<\/p>\n

dissolution or winding up) with the Series R Preferred Stock, except
\ndividends paid ratably on the Series R Preferred Stock and all such parity stock
\non which dividends are payable or in arrears in proportion to the total amounts
\nto which the holders of all such shares are then entitled;<\/p>\n

(iii) redeem or purchase or otherwise acquire for consideration shares of any
\nstock ranking junior (either as to dividends or upon liquidation, dissolution or
\nwinding up) with the Series R Preferred Stock; provided, however<\/em>, that
\nthe Corporation may at any time redeem, purchase or otherwise acquire shares of
\nany such junior stock in exchange for shares of any stock of the Corporation
\nranking junior (either as to dividends or upon dissolution, liquidation or
\nwinding up) to the Series R Preferred Stock; or<\/p>\n

(iv) redeem or purchase or otherwise acquire for consideration any shares of
\nSeries R Preferred Stock, or any shares of stock ranking on a parity with the
\nSeries R Preferred Stock, except in accordance with a purchase offer made in
\nwriting or by publication (as determined by the Corporation153s Board of
\nDirectors) to all holders of such shares upon such terms as the Corporation153s
\nBoard of Directors, after consideration of the respective annual dividend rates
\nand other relative rights and preferences of the respective Preferred Stock
\nclasses, shall determine in good faith will result in fair and equitable
\ntreatment among the respective series or classes.<\/p>\n

(b) The Corporation shall not permit any subsidiary of the Corporation to
\npurchase or otherwise acquire for consideration any shares of stock of the
\nCorporation unless the Corporation could, under paragraph (a) of this Section
\n1.4, purchase or otherwise acquire such shares at such time and in such manner.\n<\/p>\n

1.5<\/strong> Liquidation Rights<\/strong><\/p>\n<\/p>\n

Upon the liquidation, dissolution or winding up of the Corporation, whether
\nvoluntary or involuntary, no distribution shall be made to (a) the holders of
\nshares of stock ranking junior (either as to dividends or upon liquidation,
\ndissolution or winding up) to the Series R Preferred Stock unless, prior
\nthereto, the holders of shares of Series R Preferred Stock shall have received
\nan amount equal to the greater of (i) $0.001 per share and (ii) the accrued and
\nunpaid dividends and distributions thereon, whether or not declared, to the date
\nof such payment, plus an aggregate amount per share equal to the Formula Number
\nthen in effect times the aggregate amount to be distributed per share to holders
\nof Common Stock or (b) the holders of shares of stock ranking on a parity
\n(either as to dividends or upon liquidation, dissolution or winding up) with the
\nSeries R Preferred Stock, except distributions made ratably on the Series R
\nPreferred Stock and all other such parity stock in proportion to the total
\namounts to which the holders of all such shares are entitled upon such
\nliquidation, dissolution or winding up.<\/p>\n

1.6<\/strong> Consolidation, Merger, etc.<\/strong><\/p>\n<\/p>\n

In case the Corporation shall enter into any consolidation, merger,
\ncombination or other transaction in which the shares of Common Stock are
\nexchanged for or changed into<\/p>\n

A-4<\/p>\n

\n

<\/p>\n

other stock or securities, cash and\/or any other property, then in any such
\ncase the then outstanding shares of Series R Preferred Stock shall at the same
\ntime be similarly exchanged or changed into an amount per share equal to the
\nFormula Number then in effect times the aggregate amount of stock, securities,
\ncash and\/or any other property (payable in kind), as the case may be, into which
\nor for which each share of Common Stock is exchanged or changed. In the event
\nboth this Section 1.6 and Section 1.2 appear to apply to a transaction, this
\nSection 1.6 will control.<\/p>\n

1.7<\/strong> No Redemption; No Sinking Fund<\/strong><\/p>\n<\/p>\n

(a) The shares of Series R Preferred Stock shall not be subject to redemption
\nby the Corporation or at the option of any holder of Series R Preferred Stock;
\nprovided, however<\/em>, that the Corporation may purchase or otherwise
\nacquire outstanding shares of Series R Preferred Stock in the open market or by
\noffer to any holder or holders of shares of Series R Preferred Stock.<\/p>\n

(b) The shares of Series R Preferred Stock shall not be subject to or
\nentitled to the operation of a retirement or sinking fund.<\/p>\n

1.8<\/strong> Ranking<\/strong><\/p>\n<\/p>\n

The Series R Preferred Stock shall rank junior to all other series of
\nPreferred Stock of the Corporation, unless the Corporation153s Board of Directors
\nshall specifically determine otherwise in fixing the powers, preferences and
\nrelative, participating, optional and other special rights of the shares of such
\nPreferred Stock and the qualifications, limitations and restrictions thereof.\n<\/p>\n

1.9<\/strong> Fractional Shares<\/strong><\/p>\n<\/p>\n

The Series R Preferred Stock shall be issuable upon exercise of the Rights
\nissued pursuant to the Rights Agreement in whole shares or in any fractional
\nshare that is one one-hundredth (1\/100th) of a share or any integral multiple of
\nsuch fraction, and shall entitle the holder, in proportion to such holder153s
\nfractional shares, to receive dividends, exercise voting rights, participate in
\ndistributions and have the benefit of all other rights of holders of Series R
\nPreferred Stock. In lieu of fractional shares, the Corporation, prior to the
\nfirst issuance of a share or a fractional share of Series R Preferred Stock, may
\nelect to (a) make a cash payment as provided in the Rights Agreement for a
\nfractional share other than one one-hundredth (1\/100th) of a share or any
\nintegral multiple thereof or (b) issue depository receipts evidencing such
\nauthorized fractional share of Series R Preferred Stock pursuant to an
\nappropriate agreement between the Corporation and a depository selected by the
\nCorporation; provided, however<\/em>, that such agreement shall provide that
\nthe holders of such depository receipts shall have all the rights, privileges
\nand preferences to which they are entitled as holders of the Series R Preferred
\nStock.<\/p>\n

A-5<\/p>\n

\n

1.10<\/strong> Reacquired Shares<\/strong><\/p>\n<\/p>\n

Any shares of Series R Preferred Stock purchased or otherwise acquired by the
\nCorporation in any manner whatsoever shall be retired and canceled promptly
\nafter the acquisition thereof. All such shares shall upon their cancellation
\nbecome authorized but unissued shares of Preferred Stock, without designation as
\nto series until such shares are once more designated as part of a particular
\nSeries by the Corporation153s Board of Directors pursuant to the provisions of
\nArticle VI of the Certificate of Incorporation.<\/p>\n

1.11<\/strong> Amendment<\/strong><\/p>\n<\/p>\n

None of the powers, preferences and relative, participating, optional and
\nother special rights of the Series R Preferred Stock as provided in this
\nDesignation or in the Certificate of Incorporation shall be amended in any
\nmanner that would alter or change the powers, preferences, rights or privileges
\nof the holders of Series R Preferred Stock so as to affect them adversely
\nwithout the affirmative vote of the holders of at least two-thirds of the
\noutstanding shares of Series R Preferred Stock, voting as a separate class.<\/p>\n

A-6<\/p>\n

\n

<\/p>\n

EXHIBIT B<\/strong><\/p>\n\n\n\n
\n

Certificate No. R-<\/p>\n<\/td>\n

\n

Rights<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

NOT EXERCISABLE AFTER [ ] [ ], 20[ ] OR EARLIER IF REDEMPTION OR EXCHANGE
\nOCCURS. THE RIGHTS ARE SUBJECT TO REDEMPTION AT THE OPTION OF THE COMPANY AT
\n$0.001 PER RIGHT AND TO EXCHANGE ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT.\n<\/p>\n

RIGHTS BENEFICIALLY OWNED BY AN ACQUIRING PERSON OR AN AFFILIATE OR
\nASSOCIATE OF AN ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN THE RIGHTS
\nAGREEMENT) AND BY ANY SUBSEQUENT HOLDER OF SUCH RIGHTS ARE NULL AND VOID AND
\nNONTRANSFERABLE.<\/strong><\/p>\n

RIGHTS CERTIFICATE<\/strong><\/p>\n

\n

DIGIMARC CORPORATION<\/strong><\/p>\n

\n

This certifies that , or registered assigns, is the registered owner of the
\nnumber of Rights set forth above, each of which entitles the owner thereof,
\nsubject to the terms, provisions and conditions of the Rights Agreement, dated
\nas of July 31, 2008, 2008 (the “Rights Agreement<\/em><\/strong>“),
\nbetween DIGIMARC CORPORATION, a Delaware corporation (the
\n“Company<\/em><\/strong>“), and Computershare Trust Company, N.A., a
\nfederally chartered trust company as Rights Agent (the “Rights
\nAgent<\/em><\/strong>“), unless the Rights evidenced hereby have been previously
\nredeemed by the Company, to purchase from the Company at any time after the
\nDistribution Date (as such term is defined in the Rights Agreement) and prior to
\n5:00 P.M., Portland, Oregon time, on July 31, 2018 at the office of the Rights
\nAgent designated for such purpose, or at the office of its successor as Rights
\nAgent, one one-hundredth (1\/100) of a fully paid non-assessable share of Series
\nR Participating Cumulative Preferred Stock, $0.001 par value per share (the
\n“Preferred Shares<\/em><\/strong>“), of the Company, at a purchase
\nprice of $100.00 per one one-hundredth of a Preferred Share (the
\n“Purchase Price<\/em><\/strong>“), upon presentation and surrender of
\nthis Rights Certificate with the Form of Election to Purchase duly executed. The
\nnumber of Rights evidenced by this Rights Certificate (and the number of
\none-hundredths of a Preferred Share that may be purchased upon exercise hereof)
\nset forth above, and the Purchase Price set forth above, are the number and
\nPurchase Price as of July 31, 2008, based on the Preferred Shares as constituted
\nat such date. As provided in the Rights Agreement, the Purchase Price and the
\nnumber of one one-hundredths of a Preferred Share that may be purchased upon the
\nexercise of the Rights evidenced by this Rights Certificate are subject to
\nmodification and adjustment upon the happening of certain events.<\/p>\n

If the Rights evidenced by this Rights Certificate are at any time
\nbeneficially owned by an Acquiring Person or an Affiliate or Associate of an
\nAcquiring Person (as such terms<\/p>\n

B-1<\/p>\n

\n

<\/p>\n

are defined in the Rights Agreement), such Rights shall be null and void and
\nnontransferable and the holder of any such Right (including any purported
\ntransferee or subsequent holder) shall not have any right to exercise or
\ntransfer any such Right.<\/p>\n

This Rights Certificate is subject to all the terms, provisions and
\nconditions of the Rights Agreement, which terms, provisions and conditions are
\nhereby incorporated herein by reference and made a part hereof and to which
\nRights Agreement reference is hereby made for a full description of the rights,
\nlimitations of rights, obligations, duties and immunities hereunder of the
\nRights Agent, the Company and the holders of the Rights Certificates. Copies of
\nthe Rights Agreement are on file at the principal executive offices of the
\nCompany.<\/p>\n

This Rights Certificate, with or without other Rights Certificates, upon
\nsurrender at the office of the Rights Agent designated for such purpose, may be
\nexchanged for another Rights Certificate or Rights Certificates of like tenor
\nand date evidencing rights entitling the holder to purchase a like aggregate
\nnumber of Preferred Shares as the Rights evidenced by the Rights Certificate or
\nRights Certificates surrendered shall have entitled such holder to purchase. If
\nthis Rights Certificate shall be exercised in part, the holder shall be entitled
\nto receive upon surrender hereof another Rights Certificate or Rights
\nCertificates for the number of whole Rights not exercised.<\/p>\n

Subject to the provisions of the Rights Agreement, the Rights evidenced by
\nthis Certificate (i) may be redeemed by the Company at a redemption price (in
\ncash or shares of Common Stock or other securities of the Company deemed by the
\nCompany153s Board of Directors to be at least equivalent in value) of $0.001 per
\nRight (subject to adjustment, as provided in the Rights Agreement) or (ii) may
\nbe exchanged in whole or in part for shares of the Company153s Common Stock,
\n$0.001 par value per share, or for Preferred Shares.<\/p>\n

The Company may, but shall not be required to, issue fractions of Preferred
\nShares or distribute certificates that evidence fractions of Preferred Shares
\nupon the exercise of any Right or Rights evidenced hereby. In lieu of issuing
\nfractional shares, the Company may elect to make a cash payment as provided in
\nthe Rights Agreement for fractions of a share other than one one-hundredth
\n(1\/100) of a share or any integral multiple thereof or to issue certificates or
\nutilize a depository arrangement as provided in the terms of the Rights
\nAgreement and the Preferred Shares.<\/p>\n

No holder of this Rights Certificate shall be entitled to vote or receive
\ndividends or be deemed for any purpose the holder of the Preferred Shares or of
\nany other securities of the Company that may at any time be issuable on the
\nexercise hereof, nor shall anything contained in the Rights Agreement or herein
\nbe construed to confer upon the holder hereof, as such, any of the rights of a
\nshareholder of the Company or any right to vote for the election of directors or
\nupon any matter submitted to shareholders at any meeting thereof, or to give or
\nwithhold consent to any corporate action, or to receive notice of meetings or
\nother actions affecting, shareholders (except as provided in the Rights
\nAgreement), or to receive dividends or subscriptions rights, or otherwise, until
\nthe Right or Rights evidenced by this Rights Certificate shall have been
\nexercised as provided in the Rights Agreement.<\/p>\n

B-2<\/p>\n

\n

<\/p>\n

This Rights Certificate shall not be valid or obligatory for any purpose
\nuntil it shall have been countersigned by the Rights Agent.<\/p>\n

WITNESS the facsimile signature of the proper officers of the Company and its
\ncorporate seal, if any. Dated as of , .<\/p>\n\n\n\n\n\n\n\n
<\/td>\n\n

DIGIMARC CORPORATION<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n<\/tr>\n
<\/td>\n<\/td>\n<\/tr>\n
<\/td>\n\n

By:<\/p>\n<\/td>\n

<\/td>\n<\/tr>\n
<\/td>\n\n

Its:<\/p>\n<\/td>\n

<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

COUNTERSIGNED:<\/p>\n

COMPUTERSHARE TRUST COMPANY, N.A.
\nas Rights Agent<\/p>\n\n\n\n\n\n
\n

By:<\/p>\n<\/td>\n

<\/td>\n<\/td>\n<\/tr>\n
\n

Its:<\/p>\n<\/td>\n

<\/td>\n<\/td>\n<\/tr>\n
<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

B-3<\/p>\n

\n

<\/p>\n

:Form of Reverse Side of Rights Certificate:<\/p>\n

FORM OF ASSIGNMENT<\/strong><\/p>\n

\n

(To be executed by the registered holder if such holder desires to transfer
\nthe Rights Certificate)<\/p>\n

FOR VALUE RECEIVED hereby sells, assigns and transfer unto<\/p>\n

(Please print name and address of transferee)<\/p>\n

this Rights Certificate, together with all right, title and interest therein,
\nand does hereby irrevocably constitute and appoint as attorney, to transfer this
\nRights Certificate on the books of the within-named Company, with full power of
\nsubstitution.<\/p>\n

The undersigned hereby certifies that (1) the Rights evidenced by this Rights
\nCertificate are not being sold, assigned or transferred by or on behalf of a
\nPerson who is or was an Acquiring Person or an Affiliate or Associate thereof
\n(as such terms are defined in the Rights Agreement), (2) this Rights Certificate
\nis not being sold, assigned or transferred to or on behalf of any such Acquiring
\nPerson, Affiliate or Associate, and (3) after inquiry and to the best knowledge
\nof the undersigned, the undersigned did not acquire the Rights evidenced by this
\nRights Certificate from any Person who is or was an Acquiring Person or an
\nAffiliate or Associate thereof (as such terms are defined in the Rights
\nAgreement).<\/p>\n\n\n\n\n\n\n\n\n\n
\n

Dated:<\/p>\n<\/td>\n

<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
<\/td>\n<\/td>\n<\/td>\n\n

Signature :<\/p>\n<\/td>\n

<\/td>\n<\/tr>\n
<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
\n

Signature Guarantee*<\/p>\n<\/td>\n

<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n
\n

*Signatures must be guaranteed by a participant in the Securities Transfer
\nAgent Medallion Program, the Stock Exchanges Medallion Program or the New York
\nStock Exchange, Inc. Medallion Signature Program.<\/p>\n

B-4<\/p>\n

\n

<\/p>\n

:Form of Reverse Side of Rights Certificate:<\/p>\n

(continued)<\/p>\n

FORM OF ELECTION TO PURCHASE<\/strong><\/p>\n

\n

(To be executed if holder desires to exercise Rights represented by the
\nRights Certificate)<\/p>\n

To: DIGIMARC CORPORATION<\/p>\n

The undersigned hereby irrevocably elects to exercise Rights represented by
\nthis Rights Certificate to purchase the Preferred Shares issuable upon the
\nexercise of such Rights and requests that certificates for such Preferred Shares
\nbe issued in the name of:<\/p>\n

Please insert social security or other identifying number<\/p>\n

(Please print name and address)<\/p>\n

If such number of Rights shall not be all the Rights evidenced by this Rights
\nCertificate, a new Rights Certificate for the balance remaining of such Rights
\nshall be registered in the name of and delivered to:<\/p>\n

Please insert social security or other identifying number<\/p>\n

(Please print name and address)<\/p>\n

The undersigned hereby certifies that (1) the Rights evidenced by this Rights
\nCertificate are not beneficially owned by an Acquiring Person or an Affiliate or
\nAssociate thereof (as such terms are defined in the Rights Agreement), and (2)
\nafter inquiry and to the best knowledge of the undersigned, the undersigned did
\nnot acquire the Rights evidenced by this Rights Certificate from any Person who
\nis or was an Acquiring Person or an Affiliate or Associate thereof (as such
\nterms are defined in the Rights Agreement).<\/p>\n\n\n\n\n\n\n\n\n\n
\n

Dated:<\/p>\n<\/td>\n

<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
<\/td>\n<\/td>\n<\/td>\n\n

Signature :<\/p>\n<\/td>\n

<\/td>\n<\/tr>\n
<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
\n

Signature Guarantee*<\/p>\n<\/td>\n

<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n
\n

*Signatures must be guaranteed by a participant in the Securities Transfer
\nAgent Medallion Program, the Stock Exchanges Medallion Program or the New York
\nStock Exchange, Inc. Medallion Signature Program.<\/p>\n

B-5<\/p>\n

\n

<\/p>\n

:Form of Reverse Side of Rights Certificate:<\/p>\n

(continued)<\/p>\n

NOTICE<\/strong><\/p>\n

\n

The signature in the Form of Assignment or Form of Election to Purchase, as
\nthe case may be, must conform to the name as written on the face of this Rights
\nCertificate in every particular, without alteration or enlargement or any change
\nwhatsoever.<\/p>\n

In the event the certification set forth above in the Form of Assignment
\nor the Form of Election to Purchase, as the case may be, is not completed, the
\nCompany and the Rights Agent will deem the beneficial owner of the Rights
\nevidenced by this Rights Certificate to be an Acquiring Person or an Affiliate
\nor Associate thereof (as defined in the Rights Agreement) and such Assignment or
\nElection to Purchase will not be honored.<\/em><\/p>\n

B-6<\/p>\n

\n

<\/p>\n

EXHIBIT C<\/strong><\/p>\n

DIGIMARC CORPORATION<\/strong><\/p>\n

\n

SHAREHOLDER RIGHTS PLAN<\/strong><\/p>\n

\n

SUMMARY OF RIGHTS
\nTO PURCHASE PREFERRED SHARES<\/strong><\/p>\n

\n\n\n\n\n\n
\n

Distribution and Transfer of Rights; Rights Certificates:<\/em><\/p>\n<\/td>\n

<\/td>\n\n

On July 31, 2008, the Board of Directors (the “Board of
\nDirectors<\/em><\/strong>“) of DMRC Corporation (the
\n“Company<\/em><\/strong>“) authorized the implementation of a
\nShareholder Rights Plan, subject to the completion of the merger of DMRC LLC
\nwith and into the Company, its wholly-owned subsidiary, with the Company being
\nthe surviving company in the merger (the “DMRC
\nMerger<\/em><\/strong>“), and declared a dividend of one preferred share purchase
\nright (a “Right<\/em><\/strong>“) for each outstanding share of common
\nstock, $0.001 par value per share, of the Company (the “Common
\nShares<\/em><\/strong>“), upon completion of the DMRC Merger. Prior to the
\nDistribution Date referred to below, if any, the Rights will be evidenced by and
\ntrade with the certificates for the Common Stock. After the Distribution Date,
\nif any, the Company will cause rights certificates to be delivered to the
\nCompany153s shareholders and the Rights will become transferable apart from the
\nCommon Stock.<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
\n

Distribution Date:<\/em><\/p>\n<\/td>\n

<\/td>\n\n

The Rights will separate from the Common Stock and become exercisable
\nfollowing the earlier of (i) the close of business on the tenth business day
\nafter a public announcement that a person or group (including any affiliate or
\nassociate of such person or group) has acquired beneficial ownership of 15% or
\nmore of the outstanding Common Shares on the date of completion of the DMRC
\nMerger (such person or group being an “Acquiring
\nPerson<\/em><\/strong>“) and (ii) the close of business on such date, if any, as
\nmay be designated by the Board of Directors following the commencement of, or
\nfirst public disclosure of an intent to commence, a tender or exchange offer for
\noutstanding Common Shares which could result in the offeror becoming the
\nbeneficial owner of 15% or more of the outstanding Common Shares (the earlier of
\nsuch dates being the “Distribution Date<\/em><\/strong>“).<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

C-1<\/p>\n

\n\n\n\n\n\n\n\n\n\n\n\n
<\/p>\n

Preferred Shares Purchasable upon Exercise of Rights:<\/em><\/p>\n<\/td>\n

<\/td>\n\n

After the Distribution Date, each Right will entitle the holder to purchase,
\nfor $100.00 (the “Purchase Price<\/em><\/strong>“), one one-hundredth
\n(1\/100) of a share of Series R Participating Cumulative Preferred Stock of the
\nCompany (a “Preferred Share<\/em><\/strong>“) with economic terms
\nsimilar to that of one Common Share.<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
\n

Flip-In Provision:<\/em><\/p>\n<\/td>\n

<\/td>\n\n

In the event a person or group becomes an Acquiring Person, the Rights will
\nentitle each holder of a Right (other than an Acquiring Person (or any affiliate
\nor associate of such Acquiring Person)) to purchase, for the Purchase Price,
\nthat number of Common Shares equivalent to the number of Common Shares which at
\nthe time of the transaction would have a market value of twice the Purchase
\nPrice. Any Rights that are at any time beneficially owned by an Acquiring Person
\n(or any affiliate or associate of an Acquiring Person) will be null and void and
\nnontransferable and any holder of any such Right (including any purported
\ntransferee or subsequent holder) will be unable to exercise or transfer any such
\nRight.<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
\n

Flip-Over Provision:<\/em><\/p>\n<\/td>\n

<\/td>\n\n

If, at any time after any person or group becomes an Acquiring Person, the
\nCompany is acquired in a merger or other business combination with another
\nentity, or if 50% or more of its assets or assets accounting for 50% or more of
\nits net income or revenues are transferred (in one or more transactions), each
\nRight will entitle its holder to purchase, for the Purchase Price, that number
\nof shares of common stock of the person or group engaging in the transaction
\nhaving a then current market value of twice the Purchase Price.<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
\n

Exchange Provisions:<\/em><\/p>\n<\/td>\n

<\/td>\n\n

At any time after any person or group becomes an Acquiring Person, but before
\na person or group becomes the beneficial owner of more than 50% of the Common
\nShares, the Board of Directors may elect to exchange each Right (other than
\nRights that have become null and void and nontransferable as described above)
\nfor consideration per Right consisting of one-half of the number of Common
\nShares that would be issuable at such time on the exercise of one Right and
\nwithout payment of the Purchase Price.<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
\n

Redemption of Rights:<\/em><\/p>\n<\/td>\n

<\/td>\n\n

At any time prior to any person or group becoming an Acquiring Person, the
\nBoard of Directors may redeem the<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

C-2<\/p>\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n
<\/td>\n<\/td>\n\n

Rights in whole, but not in part, at a price of $0.001 per Right, subject to
\nadjustment as provided in the Rights Agreement (the “Redemption
\nPrice<\/em><\/strong>“).<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
\n

Expiration of Rights:<\/em><\/p>\n<\/td>\n

<\/td>\n\n

The Rights are not exercisable until the Distribution Date and will expire on
\nJuly 31, 2018, unless earlier redeemed or exchanged by the Company.<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
\n

Amendment of Terms of Rights:<\/em><\/p>\n<\/td>\n

<\/td>\n\n

The terms of the Rights and the Rights Agreement may be amended without the
\napproval of any holder of the Rights, at any time prior to the Distribution
\nDate.<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
\n

Voting Rights:<\/em><\/p>\n<\/td>\n

<\/td>\n\n

Until a Right is exercised, the holder thereof, as such, will have no rights
\nas a shareholder of the Company, including, without limitation, the right to
\nvote or receive dividends.<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
\n

Antidilution Provisions:<\/em><\/p>\n<\/td>\n

<\/td>\n\n

In order to preserve the actual or potential economic value of the Rights,
\nthe number of Preferred Shares or other securities issuable upon exercise of the
\nRight, the Purchase Price, the Redemption Price and the number of Rights
\nassociated with each outstanding Common Share are all subject to adjustment by
\nthe Board of Directors pursuant to certain customary antidilution provisions.\n<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
\n

Taxes:<\/em><\/p>\n<\/td>\n

<\/td>\n\n

The Rights distribution should not be taxable for federal income tax
\npurposes. Following an event that renders the Rights exercisable or upon
\nredemption of the Rights, shareholders may recognize taxable income.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

The foregoing is a summary of certain principal terms of the Shareholder
\nRights Plan and is qualified in its entirety by reference to the detailed terms
\nof the Rights Agreement. A copy of the Rights Agreement has been filed with the
\nSecurities and Exchange Commission as an exhibit to a Registration Statement on
\nForm 8-A and is available free of charge from the Company.<\/p>\n

C-3<\/p>\n

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