L-1 - Form 8 - Digimarc Merger Agreement

ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT

On March 23, 2008, L-1 Identity Solutions, Inc. ("L-1") entered into an Agreement and Plan of Merger (the "Merger Agreement") with Dolomite Acquisition Co., a wholly owned subsidiary of L-1 ("Merger Sub"), and Digimarc Corporation ("Digimarc"). Pursuant to the Merger Agreement, and subject to the terms and conditions set forth therein, Merger Sub will be merged with and into Digimarc, with Digimarc continuing as the surviving corporation and a wholly owned subsidiary of L-1 (the "Merger"). As a result of the Merger, L-1 will own the business, operations, assets and liabilities primarily related to Digimarc's Secure ID Business. Prior to the closing of the Merger, Digimarc will form a separate entity and spin off the business, operations, assets and liabilities of its Digital Watermarking Business to its stockholders (the "Spin-Off"). After the Spin-Off, the new company holding the Digital Watermarking Business and certain other assets and liabilitites will bear the Digimarc name ("new Digimarc").

L-1 - Form 8 - Digimarc Merger Agreement