Document:

Exhibit 10.1

 

FORM OF 

AMENDED AND RESTATED SUPPORT AGREEMENT

 

This AMENDED AND RESTATED SUPPORT AGREEMENT
(this “Agreement”), dated as of June     ,
2008, is entered into by and among L-1 Identity Solutions, Inc., a
Delaware corporation (“Parent”), Dolomite Acquisition Co., a Delaware
corporation and a wholly-owned subsidiary of Parent (“Merger Sub”), and                                
(“Stockholder”).  Capitalized
terms used but not defined in this Agreement have the meanings ascribed thereto
in the Merger Agreement (as defined below).

 

WHEREAS, Parent, Merger Sub and Digimarc
Corporation, a Delaware corporation (the “Company”), entered into an
Agreement and Plan of Merger, dated as of March 23, 2008 (the “Original
Merger Agreement”), pursuant to which, among other things, Parent would
acquire the Company following the Spin-Off by means of a merger transaction, on
the terms and subject to the conditions set forth in the Original Merger
Agreement;

 

WHEREAS, concurrently with the execution of
the Original Merger Agreement, Parent, Merger Sub and Stockholder entered into
that certain Support Agreement, dated as of March 23, 2008 (the “Support
Agreement”);

 

WHEREAS, concurrently with the execution of
this Agreement, the Company, Parent and Merger Sub are entering into an Amended
and Restated Agreement and Plan of Merger of even date herewith (the “Merger
Agreement”), which provides, among other things, for the Offer and the
Merger;

 

WHEREAS, as of the date hereof, Stockholder
is the record and beneficial owner of               
shares of Company Common Stock (such shares of Company Common Stock, together
with any other shares of Company Common Stock acquired by Stockholder after the
date hereof, being collectively referred to herein as the “Stockholder
Shares”); and

 

WHEREAS, as a condition to their willingness
to enter into the Merger Agreement, Parent and Merger Sub desire to amend and
restate the Support Agreement and have required that Stockholder enter into
this Agreement and, in order to induce Parent and Merger Sub to enter into the
Merger Agreement, Stockholder is willing to enter into this Agreement.

 

NOW, THEREFORE, in consideration of the
foregoing and the mutual covenants and agreements contained herein, the parties
hereto, intending to be legally bound hereby, agree as follows:

 

(a)           Stockholder Shares. Unless
this Agreement shall have been terminated in accordance with its terms,
Stockholder shall (a) as promptly as practicable and in any event within
ten (10) Business Days of the commencement of the Offer, validly tender
all of the Stockholder Shares pursuant to and in accordance with the terms of
the Offer, and (b) not withdraw any tendered Stockholder Shares from the
Offer.

 

(b)           Company Restricted Stock and
Company Stock Options. Notwithstanding anything to the contrary in Section 1(a),
Stockholder shall not be required to

 

 

tender any Stockholder Shares which (i) are
Company Restricted Stock or subject to Company Stock Options and (ii) have
not vested at the time Stockholder validly tenders all of the Stockholder
Shares pursuant to Section 1(a)(i) (“Unvested Stockholder Shares”);
provided, however, that as promptly as practicable and in any
event on the Business Day on which any Unvested Stockholder Shares vest (or the
next Business Day if the vesting date is no a Business Day), Stockholder shall
validly tender all vested Stockholder Shares pursuant to and in accordance with
the terms of the Offer.

 

2.               Representations
and Warranties of Stockholder. 
Stockholder hereby represents and warrants to Parent and Merger Sub as
follows:

 

(a)           Authority.  Stockholder has all necessary power and
authority to execute and deliver this Agreement and to perform his obligations
hereunder.  The execution, delivery and
performance by Stockholder of this Agreement and the transactions contemplated
hereby have been duly authorized and approved by all necessary action on the
part of Stockholder and no further action on the part of Stockholder is
necessary to authorize the execution and delivery by Stockholder of this Agreement
or the performance by Stockholder of his obligations hereunder.  This Agreement has been duly executed and
delivered by Stockholder and, assuming due and valid authorization, execution
and delivery hereof by Parent and Merger Sub, constitutes a valid and binding
obligation of Stockholder, enforceable against Stockholder in accordance with
its terms, except as such enforceability may be limited by bankruptcy,
insolvency, moratorium or other similar Laws affecting or relating to creditors’
rights generally and by general principles of equity.

 

(b)           Consents and Approvals; No
Violations.  Except for any required
filings pursuant to federal and state securities Laws, no consents or approvals
of, or filings, declarations or registrations with, any Governmental Authority
are necessary for the performance by Stockholder of his obligations under this
Agreement, other than such consents, approvals, filings, declarations or
registrations that, if not obtained, made or given, would not, individually or
in the aggregate, reasonably be expected to prevent or materially delay the
performance by Stockholder of any of his obligations under this Agreement.  Neither the execution of this Agreement by
Stockholder nor the consummation of the transactions contemplated hereby will
result in a breach or violation of the terms of any agreement to which the
Stockholder is bound or is a party or any Law or order applicable to
Stockholder, except for such breaches or violations as would not, individually
or in the aggregate, reasonably be expected to prevent or materially delay the
performance by Stockholder of any of his obligations under this Agreement.

 

(c)           Ownership of Shares.  Stockholder owns, beneficially and of record,
all of the Stockholder Shares free and clear of any proxy, voting restriction,
adverse claim or other Lien (other than proxies and restrictions in favor of
Parent and Merger Sub pursuant to this Agreement and except for such transfer
restrictions of general applicability as may be provided under the Securities
Act and the “blue sky” Laws of the various states of the United States,
collectively “Permitted Liens”). 
Without limiting the foregoing, except for Permitted Liens, Stockholder
has sole voting power and sole power of disposition with respect to all
Stockholder Shares, with no restrictions on Stockholder’s rights of voting or
disposition pertaining thereto, and no Person other than Stockholder has any
right to direct or approve the voting or disposition of any Stockholder
Shares.  Except as set forth on Exhibit A
hereto, as of

 

2

 

the date hereof, Stockholder does not own,
beneficially or of record, or have the right to acquire, any securities of the
Company other than the Stockholder Shares.

 

(d)           Brokers.  No broker, investment banker, financial
advisor or other Person is entitled to any broker’s, finder’s, financial
advisor’s or other similar fee or commission that is payable by the Company,
Parent or any of their respective Subsidiaries in connection with the transactions
contemplated by the Merger Agreement based upon arrangements made by or on
behalf of Stockholder.

 

(e)           Reliance by Parent.  Stockholder understands and acknowledges that
Parent is entering into the Merger Agreement in reliance upon Stockholder’s
execution and delivery of this Agreement.

 

(f)            Compliance with Support Agreement.  From March 23, 2008 to and including the
date of this Agreement, Stockholder has complied in all respects with the terms
and conditions of the Support Agreement.

 

3.     Representation and Warranties of Parent
and Merger Sub.  Parent and Merger
Sub jointly and severally represent and warrant to Stockholder as follows:

 

(a)           Authority.  This Agreement has been authorized by all
necessary action on the part of each of Parent and Merger Sub and has been duly
executed by a duly authorized officer of each of Parent and Merger Sub.

 

(b)           No Violations.  This Agreement constitutes the legal, valid
and binding obligation of each of Parent and Merger Sub, enforceable against
each of them in accordance with its terms, except as such enforceability may be
limited by bankruptcy, insolvency, moratorium or other similar Laws affecting
or relating to creditors’ rights generally and by general principles of
equity.  Neither the execution of this Agreement
by Parent and Merger Sub nor the consummation of the transactions contemplated
hereby will result in a breach or violation of the terms of any agreement by
which Parent or Merger Sub is bound or of any Law or order applicable to Parent
or Merger Sub.

 

4.               Additional
Covenants of the Stockholder. 
Subject to Section 7(a) hereof, Stockholder hereby covenants
and agrees that:

 

(a)           Voting.  From the date hereof until any termination of
this Agreement in accordance with its terms, at any meeting of the stockholders
of the Company however called (or any action by written consent in lieu of a
meeting) or any adjournment or postponement thereof, Stockholder shall vote all
Stockholder Shares or, as appropriate, execute written consents in respect
thereof, (i) in favor of the adoption of the Merger Agreement and the
approval of the transactions contemplated thereby, (ii) in favor of the
Restructuring and the Spin-Off (to the extent to be voted upon by the Company’s
stockholders), (iii) against any agreement (including, without limitation,
any amendment of any agreement), amendment of the Company Charter Documents or
other action that is intended or could reasonably be expected to prevent,
impede, interfere with, materially delay, postpone or discourage the consummation
of the Merger and (iv) against any Takeover Proposal.  Any such vote shall be cast (or consent shall
be given) by Stockholder in

 

3

 

accordance with such procedures relating
thereto so as to ensure that it is duly counted, including for purposes of
determining that a quorum is present and for purposes of recording the results
of such vote or consent.

 

(b)           Irrevocable Proxy.  In order to secure the performance of such
Stockholder’s obligations under this Agreement, by entering into this
Agreement, such Stockholder hereby irrevocably grants a proxy appointing each
executive officer of Parent as such Stockholder’s attorney-in-fact and proxy,
with full power of substitution, for and in his name, to vote, express consent or dissent, or
otherwise to exercise all voting and related rights with respect to the
Stockholder Shares at every annual, special or adjourned meeting of the
stockholders of the Company, and in every written consent in lieu of any such
meeting, as specifically set forth in Section 4(a) as to the matters
specified in Section 4(a).  The
proxy granted by such Stockholder pursuant to this Section 4(b) shall be
revoked upon termination of this Agreement in accordance with its terms and the
provisions of Section 212(e) of the DGCL.  Such Stockholder hereby revokes any and all
previous proxies granted with respect to the Stockholder Shares.

 

(c)           Restriction on Transfer; Proxies;
Non-Interference.  From the date
hereof until any termination of this Agreement in accordance with its terms,
except as provided hereunder or under the Merger Agreement, such Stockholder
shall not, directly or indirectly, (i) sell, transfer (including by
operation of Law), give, pledge, encumber, assign or otherwise dispose of
(including, without limitation, any Constructive Disposition (as defined
below)), or enter into any Contract, option or other arrangement or
understanding with respect to the sale, transfer, gift, pledge, encumbrance,
assignment or other disposition of, any Stockholder Shares (or any right, title
or interest thereto or therein), (ii) deposit any Stockholder Shares into
a voting trust or grant any proxies or enter into a voting agreement, power of
attorney or voting trust with respect to any Stockholder Shares, (iii) take
any action that would make any representation or warranty of Stockholder set
forth in this Agreement untrue or incorrect in any material respect or have the
effect of preventing, disabling or delaying Stockholder from performing any of
his obligations under this Agreement or (iv) agree (whether or not in
writing) to take any of the actions referred to in the foregoing clauses (i), (ii) or
(iii) of this Section 4(c).  As
used herein, the term “Constructive Disposition” means, with respect to
any Stockholder Shares, a short sale with respect to such security, entering
into or acquiring an offsetting derivative contract with respect to such
security, entering into or acquiring a futures or forward contract to deliver
such security or entering into any other hedging or other derivative
transaction that has the effect of materially changing the economic benefits
and risks of ownership.  Any attempted
transfer of the Stockholder Shares or any interest therein in violation of this
Section 4(c) shall be null and void. 
In furtherance of this Agreement, such Stockholder shall and hereby does
authorize the Company and Merger Sub’s counsel to notify the Company’s transfer
agent that there is a stop transfer restriction with respect to all of the
Stockholder Shares (and that this Agreement places limits on the voting and
transfer of the Stockholder Shares); provided, however, that any such stop
transfer restriction shall terminate upon the termination of this Agreement in
accordance with its terms and, upon such event, Parent shall notify the Company’s
transfer agent of such termination. 
Notwithstanding anything herein to the contrary, in connection with the
exercise of a Company Stock Option (cashless or otherwise), (A) Stockholder
may sell Stockholder Shares in open market transactions in an amount necessary
to satisfy the

 

4

 

payment of any transaction costs and any tax
liability incurred by Stockholder in connection with such exercise and (B) Stockholder
may pledge Stockholder Shares as collateral for loans used to fund exercise of
Company Stock Options.

 

(d)           No Solicitation.  Stockholder acknowledges and agrees that it
has reviewed and understands Section 6.3 of the Merger Agreement and
hereby agrees from the date hereof until the termination of this Agreement that
it shall be bound by Section 6.3 of the Merger Agreement to the same
extent as if Stockholder were bound by the Company’s obligations thereunder.

 

(e)           Appraisal Rights.  Stockholder agrees not to exercise any
appraisal rights in respect of the Stockholder Shares which may arise with
respect to the Restructuring, the Spin-Off or the Merger.

 

(f)            Legends.  If requested by Parent, Stockholder agrees to
cause all certificates representing Stockholder Shares to bear a prominent
legend stating that such Stockholder Shares are subject to the transfer, voting
and other restrictions described in this Agreement.

 

5.               No Ownership
Interest.  Nothing contained in this
Agreement shall be deemed to vest in either Parent or Merger Sub any direct or
indirect ownership or incidence of ownership of or with respect to any
Stockholder Shares.  All rights,
ownership and economic benefits of and relating to the Stockholder Shares shall
remain vested in and belong to Stockholder, and neither Parent nor Merger Sub
shall have any authority to exercise any power or authority to direct
Stockholder in the voting of any of the Stockholder Shares, except as otherwise
specifically provided herein, or in the performance of the Stockholder’s duties
or responsibilities as a stockholder of the Company.

 

6.               Termination.  This Agreement shall terminate on the first
to occur of (a) the written consent of Parent, Merger Sub and Stockholder
to terminate this Agreement, (b) the termination of the Merger Agreement
in accordance with its terms (c) the acceptance by Parent or Merger Sub of
all tendered Stockholder Shares in the Offer and (d) the Effective
Time.  Notwithstanding the foregoing, (i) nothing
herein shall relieve any party from liability for fraud or any willful breach
of this Agreement and (ii) the provisions of this Section 6 and Section 7
of this Agreement shall survive any termination of this Agreement.

 

7.               Miscellaneous.

 

(a)           Action in Stockholder Capacity
Only.  The parties acknowledge that
this Agreement is entered into by Stockholder in his capacity as owner of the
Stockholder Shares and that nothing in this Agreement shall in any way restrict
or limit any director or officer of the Company from taking any action in his
capacity as a director or officer of the Company that is necessary for him to
comply with his fiduciary duties as a director or officer of the Company,
including, without limitation, participating in his capacity as a director of
the Company in any discussions or negotiations of the Merger Agreement.

 

5

 

(b)           Expenses.  Except as otherwise expressly provided in
this Agreement, all costs and expenses incurred in connection with the
transactions contemplated by this Agreement shall be paid by the party
incurring such costs and expenses.

 

(c)           Additional Shares.  Until any termination of this Agreement in
accordance with its terms, Stockholder shall promptly notify Parent of the
number of shares of Company Common Stock, if any, as to which Stockholder
acquires record or beneficial ownership after the date hereof.  Any shares of Company Common Stock as to
which Stockholder acquires record or beneficial ownership after the date hereof
and prior to termination of this Agreement shall be Stockholder Shares for
purposes of this Agreement.  Without
limiting the foregoing, in the event of any stock split, stock dividend or
other change in the capital structure of the Company affecting the Company
Common Stock, the number of shares of Company Common Stock constituting
Stockholder Shares shall be adjusted appropriately and this Agreement and the
obligations hereunder shall attach to any additional shares of Company Common
Stock or other voting securities of the Company issued to Stockholder in
connection therewith.

 

(d)           Definition of “Beneficial
Ownership”.  For purposes of this
Agreement, “beneficial ownership” with respect to (or to “own beneficially”)
any securities shall mean having “beneficial ownership” of such securities (as
determined pursuant to Rule 13d-3 under the Exchange Act), including
pursuant to any agreement, arrangement or understanding, whether or not in
writing.

 

(e)           Further Assurances.  From time to time, at the request of Parent
and without further consideration, Stockholder shall execute and deliver such
additional documents and take all such further action as may be reasonably
required to consummate and make effective, in the most expeditious manner
practicable, the transactions contemplated by this Agreement.

 

(f)            Amendments; Waiver.  This Agreement may not be amended or
supplemented, except by a written agreement executed by the parties
hereto.  Any party to this Agreement may (i) waive
any inaccuracies in the representations and warranties of any other party hereto
or extend the time for the performance of any of the obligations or acts of any
other party hereto or (ii) waive compliance by the other party with any of
the agreements contained herein. 
Notwithstanding the foregoing, no failure or delay by Parent or Merger
Sub in exercising any right hereunder shall operate as a waiver thereof nor
shall any single or partial exercise thereof preclude any other or further
exercise thereof or the exercise of any other right hereunder.  Any agreement on the part of a party hereto
to any such extension or waiver shall be valid only if set forth in an
instrument in writing signed on behalf of such party.

 

(g)           Governing Law; Enforcement;
Jurisdiction; Waiver of Jury Trial.

 

(i)            This 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 within that State.

 

6

 

(ii)           All actions and proceedings arising
out of or relating to this Agreement shall be heard and determined in the
Chancery Court of the State of Delaware or any federal court sitting in the
State of Delaware, and the parties hereto hereby irrevocably submit to the
exclusive jurisdiction of such court (and, in the case of appeals, appropriate
appellate courts therefrom) in any such action or proceeding and irrevocably
waive the defense of an inconvenient forum to the maintenance of any such
action or proceeding.  Each party hereby
consents to process being served in any such action or proceeding by the
mailing of a copy thereof to the address set forth in Section 7(j) hereof
and agrees that such service upon receipt shall constitute good and sufficient
service of process or notice thereof. 
Nothing in this Section 7(g) shall affect or eliminate any
right to serve process in any other matter permitted by Law.

 

(iii)          EACH OF THE PARTIES HERETO HEREBY
WAIVES TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW ANY RIGHT IT MAY HAVE
TO A TRIAL BY JURY WITH RESPECT TO ANY LITIGATION DIRECTLY OR INDIRECTLY
ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY OF THE
TRANSACTIONS CONTEMPLATED HEREBY.

 

(h)           Specific Enforcement.  The parties agree that irreparable damage
would occur in the event that any of the provisions of this Agreement were not
performed in accordance with their specific terms or were otherwise
breached.  It is accordingly agreed that
the parties shall be entitled to an injunction or injunctions to prevent breaches
of this Agreement and to enforce specifically the terms and provisions of this
Agreement in the Chancery Court of the State of Delaware or any federal court
sitting in the State of Delaware, without bond or other security being
required, this being in addition to any other remedy to which they are entitled
at Law or in equity.

 

(i)            Entire Agreement; No Third Party
Beneficiaries.  This Agreement
constitutes the entire agreement, and supersedes all prior agreements and
understandings, both written and oral, among the parties, or any of them, with
respect to the subject matter hereof, including, without limitation, the
Support Agreement. This Agreement is not intended to and shall not confer upon
any Person other than the parties hereto any rights hereunder.

 

(j)            Notices.  All notices, requests and other
communications to any party hereunder shall be in writing and shall be deemed
given if delivered personally, facsimiled (which is confirmed), sent by email
(with a return receipt) or sent by overnight courier (providing proof of
delivery) to the parties at the following addresses:

 

	
  If to Parent or Merger Sub, to:

  
	
   

  
	
  L-1 Identity Solutions, Inc.

  
	
  177 Broad St., 12th Floor

  
	
  Stamford, CT 06901

  
	
  Attention: 

  	
  Mark Molina

  
	
  Facsimile:

  	
  (203) 504-1104

  

 

7

 

	
  With a copy (which shall not constitute notice) to:

  
	
   

  
	
  Weil,
  Gotshal & Manges LLP

  
	
  767 Fifth Avenue

  
	
  New York, NY
  10153

  
	
  Attention:  Marita Makinen

  
	
  Facsimile:  (212) 310-8007

  
	
  Email:
  Marita.Makinen@weil.com

  
	
   

  
	
  and

  
	
   

  
	
  Weil, Gotshal & Manges LLP

  
	
  201 Redwood Shores Parkway

  
	
  Redwood Shores, CA 94065

  
	
  Attention: Kyle Krpata

  
	
  Facsimile: 
  (650) 802-3100

  
	
  Email: Kyle.Krpata@weil.com

  
	
   

  
	
  If to Stockholder, to:

  
	
   

  
	
   

  
	
  c/o Digimarc
  Corporation

  
	
  9405 SW Gemini Drive

  
	
  Beaverton,
  OR 97008

  
	
  Facsimile:  (503) 469-4771

  
	
   

  
	
  With a copy (which shall not constitute notice) to:

  
	
   

  
	
  Perkins Coie
  LLP

  
	
  1120 N.W.
  Couch St.

  
	
  Tenth Floor

  
	
  Portland, OR
  97209

  
	
  Attention:
  Roy W. Tucker and John R. Thomas

  
	
  Facsimile:  (503) 727-2222

  
	
  Email:

  	
  rtucker@perkinscoie.com

  
	
   

  	
  jrthomas@perkinscoie.com

  

 

(k)           Severability.  If any term or other provision of this
Agreement is determined by a court of competent jurisdiction to be invalid,
illegal or incapable of being enforced by any rule of Law or public
policy, all other terms, provisions and conditions of this Agreement shall
nevertheless remain in full force and effect. 
Upon such determination that any term or other provision is invalid,
illegal or incapable of being enforced, the parties hereto shall negotiate in
good faith to modify this Agreement so as to effect the original intent of the
parties as closely as possible to the fullest extent permitted by applicable
Law in an acceptable manner to the end that the transactions contemplated
hereby are fulfilled to the extent possible.

 

(l)            Assignment; Binding Effect.  Neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned by any of the parties
hereto (whether by operation of Law or otherwise) without the prior written
consent of the other 

 

8

 

parties. 
Subject to the preceding sentence, this Agreement shall be binding upon
and shall inure to the benefit of the parties hereto and their respective
successors and permitted assigns.  Any
purported assignment not permitted under this Section 7(l) shall be
null and void.

 

(m)            Descriptive Headings.  Headings of Sections and subsections of this
Agreement are for convenience of the parties only, and shall be given no
substantive or interpretive effect whatsoever.

 

(n)           Drafting.  The parties hereto have participated jointly
in the negotiation and drafting of this Agreement and, in the event an
ambiguity or question of intent or interpretation arises, this Agreement shall
be construed as jointly drafted by the parties hereto and no presumption or
burden of proof shall arise favoring or disfavoring any party by virtue of the
authorship of this Agreement.

 

(o)           Counterparts.  This Agreement may be executed in multiple
counterparts, each of which shall be deemed to be an original but all of which
taken together shall constitute one and the same agreement.

 

[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]

 

9

 

IN WITNESS WHEREOF, the parties have caused
this Agreement to be duly executed as of the date first above written.

 

	
   

  	
  L-1 Identity
  Solutions, Inc.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Dolomite
  Acquisition Co.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Name

  	
   

  
					

 

 

[Signature Page to Amended and Restated Support Agreement]

 

 

Exhibit A

 

Additional
Stockholder SharesExhibit 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]

 

2

 

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

  

 

3

 

	
  Acknowledged by:

  	
   

  
	
   

  	
   

  
	
  COMPUTERSHARE TRUST
  COMPANY N.A.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ Katherine Anderson

  	
   

  
	
   

  	
   Name: Katherine Anderson

  	
   

  
	
   

  	
   Title: Manager Director

  	
   

  

 

4

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00144-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00144-of-00352.parquet"}]]