Exhibit 4.1


 


SECOND AMENDMENT OF RIGHTS AGREEMENT


 


THIS SECOND AMENDMENT  OF RIGHTS AGREEMENT (this
“Amendment”), effective as of June 29, 2008, is made by Digimarc
Corporation, a Delaware corporation (the “Company”), and acknowledged by
Computershare Trust Company N.A. (formerly EquiServe Trust Company, N.A., the “Rights
Agent”).


 


NOW,
THEREFORE, for
good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties agree as follows:


 


1.     Amendments


 


(a)           Subject
to the terms hereof, pursuant to Section 26 of that certain Rights
Agreement, dated as of November 16, 2004, by and between the Company and
the Rights Agent, as amended by a First Amendment of Rights Agreement effective
as of March 23, 2008 (as amended, the “Rights Agreement”), the
parties hereby amend the Rights Agreement to replace Section 36
(Transactional Exemption) in its entirety with the following section:


 


“SECTION 36. 
Transactional Exemption.


 


(a)           Notwithstanding anything to the contrary
in this Agreement, the execution, delivery or performance by the respective
parties thereto of, and the consummation of the merger or any other
transactions contemplated by, that certain Amended and Restated Agreement
and Plan of Merger dated as of June 29, 2008, as amended from time to time
(the “Merger Agreement”), by and among the Company, L-1 Identity
Solutions, Inc. (“Parent”) and Dolomite Acquisition Co., a Delaware
corporation and wholly owned subsidiary of Parent, including but not limited
to, the tender offer (the “Offer”) to purchase all outstanding shares of
common stock, par value $0.001 per share, of the Company or other actions
effected pursuant to the Offer the execution, delivery and performance by the
respective parties thereto of the Support Agreement and the Spin-Off Agreements
(as such terms are defined in the Merger Agreement) (the Merger Agreement, the
Spin-Off Agreements and all other ancillary documents relating to the
transactions contemplated therein are collectively referred to herein as the “Transaction
Agreements”), shall not cause any Person to become an “Acquiring Person”
(as that term is defined in Section 1 hereof), or give rise to any event
that, through passage of time or otherwise, would result in the occurrence of a
“Stock Acquisition Date,” a “Distribution Date,” a “Section 11(a)(ii) Event”
or a “Section 13 Event” (as those terms are defined in Sections 1,
3(a), 11(a)(ii) and 13(a) hereof, respectively).


 

















 


(b)           Notwithstanding anything to the contrary
in this Agreement, the provisions of Section 11 hereof shall be deemed not
to apply to the merger or any other transactions contemplated by the
Transaction Agreements.”


 


2.     Condition to Effectiveness


 


This Amendment shall become effective on June 29,
2008, immediately prior to the first to occur of (a) the execution and
delivery of the Support Agreement, or (b) the execution and delivery of
the Merger Agreement by each of the parties thereto.  By execution hereof, the Rights Agent hereby
acknowledges that it has received written notice of the Amendment; provided,
however, that the Rights Agent shall not be deemed to have any knowledge
of the effectiveness of this Amendment prior to the date of the execution of
this Amendment.


 


3.     Reference to and Effect on Rights Agreement


 


Each reference in the Rights Agreement to “this
Agreement,” “hereunder,” “hereof,” “herein” or any other expression of like
import referring to the Rights Agreement shall mean and be a reference to the
Rights Agreement as amended by this Amendment.


 


4.     Governing Law


 


This Second Amendment of Rights Agreement shall be
governed by, and construed in accordance with, the laws of the State of
Delaware applicable to contracts executed in and to be performed entirely in
such State.


 


5.     Continuing Effect


 


The Rights Agreement, except as amended hereby,
shall remain in full force and effect.


 


[THE REMAINDER OF THIS PAGE IS INTENTIONALLY
LEFT BLANK]


 


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IN WITNESS WHEREOF, the Company has executed this
Amendment on June 29, 2008.


 


	
   

  	
  DIGIMARC CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Robert Chamness

  
	
   

  	
   

  	
   Name: Robert Chamness

  
	
   

  	
   

  	
   Title: Chief Legal Officer and Secretary

  



 


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  Acknowledged by:

  	
   

  
	
   

  	
   

  
	
  COMPUTERSHARE TRUST
  COMPANY N.A.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ Katherine Anderson

  	
   

  
	
   

  	
   Name: Katherine Anderson

  	
   

  
	
   

  	
   Title: Manager Director

  	
   

  



 


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