ASSET PURCHASE AGREEMENT

THIS AGREEMENT is made by and among DPI of Rochester, LLC, a  New York limited
liability company with an address at 1560 Emerson Street, Rochester, New
York  14606 ("Seller"); James Stanley, an individual residing in the State of
New York (“Stanley”); Matthew Kellman, an individual residing in the State of
New York (“Kellman”); and Secuprint Inc., a New York corporation with an address
at 28 East Main Street, Rochester, New York  14614 ("Buyer"), a subsidiary of
Document Security Systems, Inc.  The Seller, Stanley, Kellman and the Buyer and
are collectively referred to as the “Parties” and individually as a “Party.”
 
RECITALS:

I.              Seller is engaged in the business of commercial printing (the
"Business"); and

II.             Seller desires to sell certain assets, properties and rights now
owned and held by it and used or usable in connection with the operation of the
Business; and

III.           Buyer desires to purchase certain Business assets, properties and
rights of Seller upon the terms and conditions hereinafter set forth, and to
continue the Business; and

IV.           The Parties acknowledge that Seller intends to file a voluntary
petition for relief (the “Bankruptcy Case”) under Chapter 11 of Title 11 of the
United States Code, 11 U.S.C. §§101, et seq. (the “Bankruptcy Code”) in the
United States Bankruptcy Court for the Western District of New York (the
“Bankruptcy Court”).

V.            Stanley and Kellman (“Members”) are the only members of the
Seller, and execute this agreement only to confirm the representations,
warranties and covenants in Articles II and III, and to specifically indicate
their assent to the provisions of Paragraph 3.09 of this Agreement.

NOW, THEREFORE, in consideration of the foregoing premises and the mutual
covenants hereinafter contained, the Parties hereto agree as follows:
 
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ARTICLE I
PURCHASE AND SALE

1.01           Purchase of Assets.  On the Closing Date set forth in Article V,
Seller agrees to sell and Buyer agrees to purchase, subject to the terms and
conditions of this Agreement, the assets, properties and rights of Seller
relating to the Business (the "Assets"), free and clear of all liens, claims,
charges, and encumbrances of any kind or nature whatsoever except as provided
herein, as follows:

A.           All of Seller's inventory relating to the Business as the same
shall exist on the Closing Date and which is usable and saleable in the ordinary
course of business, including but not limited to the items listed and described
on Schedule 1.01A hereto;

B.           All of Seller's furniture, fixtures, machinery, equipment, tools,
supplies and leasehold improvements relating to the Business as the same shall
exist on the Closing Date, including but not limited to the items listed and
described in Schedule 1.01B hereto;

C.           All Seller’s personal property leases for equipment listed on
Schedule 1.01C attached hereto (the “Personal Property Leases”);

D.           All accounts receivable owned by Seller and existing as of the
Closing Date; and

E.           All of Seller's trademarks, tradenames (including "DPI"), goodwill,
intangible assets and records relating to the Business, including, but not
limited to, Seller's telephone numbers, internet addresses, websites, customer
lists, mailing lists, sales and purchasing correspondence and records, computer
software, data processing records and all of the operational books, records and
data used by Seller in connection with the Business, except as hereafter set
forth.

It is the intention of the parties hereto that the Assets shall include all of
Seller's assets, used or usable in the conduct of the Business, whether or not
specifically listed in the Schedules attached hereto and made a part hereof;
PROVIDED, however, that there is specifically excluded from the Assets the items
listed on Schedule 1.01C.

1.02           Liabilities.  Except as set forth in Schedule 1.02, it is
expressly understood and agreed that Buyer does not, nor will it assume or
become liable for, any of Seller's liabilities of any kind or nature at any time
existing or asserted, whether fixed, contingent or otherwise, including without
limitation, accounts, notes and taxes payable, workers compensation claims,
liability claims, lease obligations accrued prior to the Closing Date, salaries,
wages, commissions, severance or separation pay, or vacation, profit sharing,
retirement, pension, bonus, hospitalization, medical, health or other employee
benefits or any unemployment or other benefit taxes relating to any of Seller's
employees.
 
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1.03           Purchase Price.  The aggregate purchase price to be paid by Buyer
to Seller for the Assets and the Covenant Not to Compete (the "Purchase Price")
shall be calculated as the lesser of:  (A) the sum of:  (i) ninety percent (90%)
of the value of Seller’s net (non-contra) accounts receivable less than 90 days
old (as adjusted pursuant to Paragraph 1.04); plus (ii) fifty percent (50%) of
the value of Seller’s inventory (as adjusted pursuant to Paragraph 1.04); plus
(iii) Fifty Thousand Dollars ($50,000.00); or (B) One Million Dollars
($1,000,00.00).  The Purchase Price shall be allocated to the various portions
of the Assets, and to the Covenants Not-To-Compete established by Paragraph 3.09
hereof, as set forth in Schedule 1.03.  Such allocation shall be used by the
parties for all tax purposes and filings, including without limitation, IRS Form
8594.

1.04           Adjustment of Account Receivables/Inventory.  For the purposes of
calculating the Purchase Price pursuant to Paragraph 1.03, the actual value of
the inventory on the Closing Date shall be determined by a physical inventory
conducted jointly by Seller and Buyer following the close of business on the day
preceding the Closing Date, with each item of inventory to be valued at the
lower of cost or market.  Similarly, net (non-contra) accounts receivable shall
be valued as reflected on the Seller’s books and records after properly
crediting all payments made against accounts receivable on the Closing Date.

1.05           Payment of Purchase Price.  The Purchase Price, net of offset
under Section 1.06, shall be paid at the Closing to Seller in the form of a wire
transfer to an account specified by Seller

1.06           Credit for DIP Financing.  Subject to the approval of the
Bankruptcy Court, it is anticipated that Buyer or an affiliate might provide
financing to Seller, as a debtor in possession (“DIP”), in connection with the
Bankruptcy Case.  Buyer may, at its option, use part or all of any amounts due
from Seller pursuant to the terms of the DIP credit facilities extended to
Seller by Buyer or its affiliate to apply against or satisfy any of Buyer’s
obligations to pay the Purchase Price.

 
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ARTICLE II
REPRESENTATIONS AND WARRANTIES OF SELLER AND MEMBERS

Seller and the Members, to the best of their knowledge, jointly and severally
represent and warrant to Buyer as follows:

2.01           Authority.  Seller is a limited liability company, duly
organized, validly existing and in good standing under the laws of the State of
New York.  Subject to the authority of the Bankruptcy Court and any orders of
such court in the Bankruptcy Case (specifically including, without limitation,
the Sale Order described in Article 6), Seller has full power and authority to
own the Assets, to carry on the Business as currently conducted, to enter into
this Agreement and to sell, transfer and deliver the Assets.  Subject to the
authority of the Bankruptcy Court and any orders in the Bankruptcy Case
(specifically including, without limitation, the Sale Order described in Article
6), Seller has taken all such actions as may be necessary or advisable and
proper to authorize this Agreement, the execution and delivery thereof, the
consummation of the transactions contemplated hereby and the execution and
delivery of each of the documents required to be delivered hereunder.

2.02           Absence of Restrictions.  Except as specifically set forth in
Schedule 2.03, and the Bankruptcy Case, Seller has made no other agreement with
any other party with respect to the sale or encumbrance of the Assets.  Except
for the Bankruptcy Case and the consent of Seller's landlord with respect to the
negotiation of a new lease of the Business premises located at 1560 Emerson
Street, Rochester, New York (the “Business Premises”), the execution and
delivery of this Agreement, and the consummation of the transactions provided
hereunder, do not require any third party consent and do not violate, conflict
with, result in the breach of, or cause the acceleration of or default under any
provision of any obligation, mortgage, lien, lease, agreement, instrument, law,
order, arbitration award, judgment, decree or any other restriction to which
Seller is a party or by which Seller is subject or bound.
 
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2.03           Title to Assets.  Except as set forth in Schedule 2.03, Seller is
in possession of the Assets and has good, marketable and indefeasible title to
all of the Assets, free and clear of all liabilities, mortgages, conditional
sales agreements, security interests, leases, liens, pledges, encumbrances,
restrictions, charges, claims or imperfections of title whatsoever.

2.04           Condition of Property.  All of Seller's tangible personal
property and equipment included in the Assets in good working order so as to be
fit for use in the ordinary course of the Business.

2.05           Inventory.  All of Seller's inventory included in the Assets is
located on the Business Premises, is usable and saleable in the ordinary course
of the Business and is of a quality suitable for sale in the ordinary course of
such Business.

2.06           Contracts.  Other than the Bankruptcy Case, Seller has no
contracts or commitments of any kind or nature which would materially and
adversely affect the Business, the Assets or the continuation of the Business by
Buyer.
 
2.07           Litigation and Claims.  Other than the Bankruptcy Case, there is
no litigation, proceeding, suit, action, controversy or claim in law or in
equity (including proceedings by or before any governmental board or agency)
existing, pending or, to the best of Seller's and Members' knowledge, threatened
against Seller which might materially adversely affect the Business or the
Assets, and there is no fact known to Seller and Members which could form the
basis for any such litigation, proceeding, suit, action, controversy or
claim.  Seller has complied with all laws, regulations and orders applicable to
the Business, specifically including all orders of the Bankruptcy Court, all
applicable zoning and environmental regulations and orders.  Other than the
Bankruptcy Case, there are no judgments, orders, or notices, whether or not
filed, against Seller which might materially adversely affect the Assets and the
continuation of the Business as now conducted by Seller.

2.08           Taxes.  Except as set forth in Schedule 2.08, Seller has filed
returns for and paid in full all of its federal, state and local taxes,
including New York State sales and franchise taxes, to the extent such filings
and payments are required or due prior to the date of this Agreement.  All such
returns were true and correct when filed.

2.09           Environmental Compliance.  At all times in the conduct of the
Business, Seller has complied in all material respects with all environmental
laws and regulations, including, but not limited to, those laws and regulations
relating to the use, storage, transport, and disposal of any hazardous
substances, wastes or other materials and any related documentation, labeling or
records.
 
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2.10           Financial Statements.  The reviewed financial statements of the
Seller as, at and for the periods ended December 31, 2006, December 31, 2007,
and September 30, 2008, annexed hereto as Schedule 3.05, (a) are in accordance
with the books and records of the Seller (b) present fully, fairly and
accurately the consolidated financial position of the Seller as of said dates
and the operational results of the Seller for the periods represented thereby
and (c) have been prepared in accordance with GAAP.  Such financial statements
set forth all of the liabilities and obligations of the Seller, direct and
indirect, contingent and accrued, of any nature whatsoever, whether arising out
of contract, tort, statute or otherwise, except: (a) where not required to be
included in such financial statements pursuant to GAAP, (b) liabilities and
obligations set forth in the contracts, leases and commitments listed and
described in the attached Schedules, and (c) liabilities and obligations
incurred in the ordinary course of the Business subsequent to the respective
dates thereof.

2.11           Labor Relations.  Except as set forth in Schedule 2.11(a) hereto,
the Seller has complied in all material respects with all applicable agreements,
laws, rules and regulations relating to the employment of labor, including those
related to wages, hours and payroll taxes.  The Seller has withheld and remitted
to the proper Governmental Authorities all amounts required by law or agreement
to be withheld from wages or salaries of its employees and is not liable for any
arrearage of wages or any taxes or penalties for failure to comply with any of
the foregoing.    The Seller has no labor troubles in the sense that within the
last 12 months there have been no strikes, work stoppages, slowdowns, threatened
unfair labor practice charges or other material controversies pending or
threatened by any of its employees; and the Seller has not entered into any
collective bargaining agreement and no union represents, or in the past twelve
(12) months has demanded or requested to represent or is currently attempting to
represent, any of the employees of the Seller.  Except as set forth in Schedule
2.11(b) hereto,  the Seller has not promulgated any policy or entered into any
agreement relating to the payment of any medical insurance premium, retirement
pay, severance pay, vacation pay or sick leave to any present or former
employees of the Seller.   Schedule 2.11(b) will reflect all vacation accrued as
of the Closing and set forth the names of any employees of the Seller who are
currently on a leave of absence for any reason including military duty,
sickness, injury or disability and the reasons for and other details of such
leave(s).  All of the employees of the Seller and their current wage rates, none
of which has been increased in the past thirty (30) days, are listed in Schedule
2.11(b).  True, correct and complete copies of all written employment policies
and all employee manuals which are still in effect for any present or former
employee of the Seller have heretofore been delivered to Buyer.
 
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2.12           ERISA Matters.  Seller does not maintain or contribute to any
"employee benefit plans" as defined in Paragraph 3(3) of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"), (including any "multiemployer
plans" as defined in Paragraph 3(37) of ERISA), or any other material bonus,
deferred compensation or other fringe benefits plan or arrangement for the
benefit of employees of Seller which are subject to the minimum funding
standards contained in Section 302 of ERISA.  Set forth on Schedule 2.12 is a
list and description of each bonus, deferred compensation or other fringe
benefit plan or arrangement for the benefit of employees of Seller.

2.13           Accounts Receivable.  All of the Accounts Receivable owned by
Seller and existing as of Closing: (a)  arose in the ordinary course of Seller's
business; and (b) to the best of Seller’s and Members’ information as of the
date of this Agreement, will be free and clear of all defenses and claims,
including claims of offset, of any nature whatever,

2.14           General Warranty.  No representation or warranty contained in
this Agreement, nor any Schedule, statement or certificate furnished to or to be
furnished by Seller to Buyer pursuant to the terms hereof, or in connection with
the transactions contemplated hereby, contains or will contain any untrue
statement of a material fact, or fails or will fail to state a material fact
necessary to make the statements contained or incorporated therein or herein not
misleading.

ARTICLE III
COVENANTS OF SELLER AND MEMBERS

Seller and the Members jointly and severally covenant and agree as follows:
 
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3.01           Conduct of the Business.  Except as required in connection with
the Bankruptcy Case, to conduct the Business pending the Closing in the normal
and usual manner consistent with the successful operation thereof and, without
the prior approval of Buyer, not to make any change in the policies affecting
the operation and conduct of the Business nor to commence negotiations for, or
enter into, any material or unusual contracts or agreements affecting the
Business or the Assets, or extending beyond the Closing.

3.02           Retention of Business.  To use and exert best efforts between the
date hereof and Closing to keep and retain the Business as a going business for
the benefit of Buyer and to provide such assistance and cooperation as may be
reasonably requested by Buyer as necessary to assure the orderly transfer of the
Business to Buyer and the continuation thereof by Buyer subsequent to the
Closing.

3.03           Changes.  Between the date hereof and the Closing, to notify
Buyer of any unusual changes, problems or developments with respect to the
Business and the status of Seller's liabilities, obligations and relationship
with its creditors, customers and suppliers, to endeavor to obtain an
uninterrupted and efficient transfer of the ownership of the Business.

3.04           Liabilities.  To the extent authorized by the Bankruptcy Court,
to pay and discharge, or to make adequate provision satisfactory to Buyer for
the payment and discharge of, all of Seller's liabilities, indebtedness,
obligations, claims and losses arising out of, or by reason of, the operation of
the Business prior to the Closing Date.

3.05           Access.  To allow the authorized personnel and agents of Buyer,
upon reasonable notice, access to any and all of the records and premises of
Seller concerning the Business at reasonable times as agreed to by the Parties
between the date hereof and the Closing; and to furnish Buyer with all
information concerning Seller's affairs as the same pertain to the Business as
Buyer may reasonably request; and to permit Buyer to make extracts from, and
copies of, all of Seller's tax returns and related canceled checks, books,
records, appraisals, files, purchase orders, sales orders and other records as
the same pertain to the Business.

3.06           Indemnification.

A.           The Members shall jointly and severally fully indemnify and hold
harmless Buyer, its officers, directors, agents, employees, advisors, successors
and assigns, as applicable, from and against and in respect of any and all
liabilities, obligations, damages, losses and expenses, including claims of
every kind and nature, whether accrued, absolute, contingent or otherwise, and
reasonable attorneys' fees and the costs of defense, incurred by any of them as
a result (the “Buyer’s Losses”), or by reason, of the breach, falsity or failure
of any of Seller's representations, warranties, covenants or undertakings
contained in this Agreement; it being agreed by the Parties hereto that the
provisions of this indemnification shall survive the Closing Date for a period
of five (5) years.  In particular, this indemnity shall include any claim
against or losses or damages Buyer may suffer as a result of any violation by
Seller of any environmental laws or regulations, failure to pay any taxes or
related interest or penalties, or Seller's failure to satisfy any claims of
creditors.
 
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Notwithstanding any provision of this Section 3.06A, the Seller or any Member
will have no liability (indemnification or otherwise) with respect to an
inaccuracy or breach of any representation, warranty or covenant set forth in
this Agreement or any exhibit, schedule or certificate until the Buyer’s Losses
shall exceed $10,000 in the aggregate (the “Seller’s Basket”) and then the
Seller and the Members shall have liability only for such amount in excess of
the Seller’s Basket.  In no event shall the aggregate liability of the Seller or
Members with respect to any Buyer’s Losses exceed $100,000.

B.           The Buyer shall  fully indemnify and hold harmless the Seller and
its Members or employees, as applicable, from and against and in respect of any
liabilities, obligations, damages, losses and expenses, including claims of
every kind and nature, whether accrued, absolute, contingent or otherwise, and
reasonable attorneys’ fees and the costs of defense, incurred by any of them as
a result, or by reason of the breach, falsity or failure of any of Buyer’s
representations, warranties, covenants or undertakings contained in this
Agreement (“the Seller’s Losses”); it being agreed by the Parties hereto that
the provisions of this indemnification shall survive the Closing Date for a
period of five (5) years.
 
Notwithstanding any provision of this Section 3.06B, the Buyer will have no
liability (indemnification or otherwise) with respect to an inaccuracy or breach
of any representation, warranty or covenant set forth in this Agreement or any
exhibit, schedule or certificate until the Seller’s Losses shall exceed $10,000
in the aggregate (the “Buyer’s Basket”) and then the Buyer shall have liability
only for such amount in excess of the Buyer’s Basket.  In no event shall the
aggregate liability of the Buyer with respect to any Seller’s Losses exceed
$100,000.  Further, in no event shall this indemnification extend to any
members’ liability under any equipment lease guaranty, mortgage guaranty, or
other monetary obligation of the Members.
 
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3.07           Cooperation.  To execute, acknowledge and deliver to Buyer on
demand, both prior and subsequent to the Closing, all such instruments,
consents, authorizations, certifications, books, records and data, and to take
all other action, as previously agreed or as may be reasonably necessary or
advisable in the opinion of Buyer:  (i) to satisfy the Conditions to Closing
contained in Article V hereof, (ii) to effect the provisions and intent of this
Agreement, or (iii) to facilitate the transfer and conveyance of title to and
possession of the Assets to Buyer; and further to assist and cooperate with
Buyer in connection with any litigation or other claims of third parties
involving the Business or the Assets.

3.08           Sales Tax Notification.  To cooperate with Buyer in its
preparation and filing of form AU-196.10 with the Sales Tax Bureau of the New
York State Department of Taxation and Finance.

3.09           Non-competition.  For a period of five (5) years from and after
the Closing Date, Seller and Members each hereby severally agrees not to engage
or compete, directly or indirectly, as a principal, on his/her/its own account,
or as a shareholder, member, officer, director, employee, consultant, advisor,
partner or joint venturer in any corporation or other business entity, as the
case may be, in any business engaged in the sale, distribution or provision of
products or services previously sold, distributed or provided by Seller with
respect to the Business, or which is otherwise in competition with the Business,
in the geographical area in Seller’s products were distributed.  If any of these
restrictions on post-closing competitive activities contained in this Paragraph
shall for any reason be held by a court of competent jurisdiction to be
excessively broad as to duration, geographical scope, activity or subject, such
restrictions shall be construed so as to be limited or reduced to be enforceable
to the extent compatible with the applicable law as it shall then appear; it
being understood that by the execution of this Agreement the parties hereto
regard the restrictions herein as reasonable and compatible with their
respective rights.
 
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF BUYER

Buyer represents and warrants to the Seller and Members as follows:

4.01           Corporate Standing.  Buyer is a business entity duly organized,
validly existing and in good standing under the laws of the State of New
York.  Buyer has full corporate power and authority to own its properties and to
carry on its business as currently conducted.

4.02           Corporate Authority.  Buyer has full corporate power and
authority to enter into this Agreement and to purchase the Assets.  Buyer has
taken all such corporate action as may be necessary or advisable and proper to
authorize this Agreement, the execution and delivery thereof, the consummation
of the transactions contemplated hereby and the execution and delivery of each
of the documents required to be delivered hereunder, so that Buyer will have
full right, power and authority to purchase the Assets from the Seller and to
perform all of its obligations under this Agreement at the Closing.

4.03           Consents.  Neither the execution of this Agreement nor the
consummation of the transactions contemplated hereby on the part of Buyer
requires the consent of any third party.

ARTICLE V
CLOSING

Closing (the “Closing”) shall take place at the offices of Underberg & Kessler
LLP, 300 Bausch & Lomb Place, Rochester, New York within 10 days of the last
date upon which the Sale Order and/or Assignment Order required pursuant to
Article 6 of this Agreement shall become Final Orders, as defined in Paragraph
6.03 of this Agreement (“the Closing Date”).

ARTICLE VI
BANKRUPTCY CONDITIONS TO CLOSING

Seller has advised Buyer, and Buyer acknowledges that Seller has advised it,
that Seller is contemplating and is expected to seek protection from its
creditors under the Bankruptcy Code.  This Agreement, and the obligations of
each party performed hereunder, shall be subject to the fulfillment or wavier of
each of the following conditions (any one or more of which may be waived in
writing in whole or in part by the written consent of Seller and Buyer, as the
case may be):
 
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6.01           Seller obtaining an order from the Bankruptcy Court in a form
reasonably satisfactory to Seller and Buyer which shall have been entered upon
appropriate notice to appropriate parties in interest entitled thereto, in the
Bankruptcy Case (“the Sale Order”): (i) approving this Agreement and the
transaction contemplated hereby; (ii) authorizing Seller to transfer and assign
to Buyer all of its rights, title and interest in and to the Assets
under  Section 363 of the Bankruptcy Code, free and clear of any mortgage,
pledge, claim, lien, charge, encumbrances or security interests with such
mortgage, pledge, claims, liens, charges, encumbrances and security interests,
if any, to attach to the proceeds of the sale with the same validity, priority,
enforceability and to the same extent as such liens previously attached to the
Assets; (iii) all of the requirements of Section 363 of the Bankruptcy Code have
been satisfied; (iv) notice of the hearing on the transactions completed by this
Agreement (1) was given in accordance with the applicable provisions of the
Bankruptcy Code ad the Federal Rules of Bankruptcy Procedure (the “Bankruptcy
Rules”) and (2) constitutes such notice as is appropriate under the particular
circumstances and in accordance with the Bankruptcy Code and applicable law; (v)
finding that the Buyer is a “good faith” purchaser as that term is used in
Section 363(m) of the Bankruptcy Code; and (vi) provisions for the Bankruptcy
Court’s retention of jurisdiction over matters arising out of or related to this
Agreement and the transactions contemplated hereby.  Buyer shall have a
reasonable opportunity to review and approve any proposed Sale Order prior to
its submission to the Bankruptcy Court.

6.02           As to the assigned Executory Contract(s) (as defined in Schedule
6.02 attached hereto), Seller obtaining entry of an order (the “Assignment
Order”) of the Bankruptcy Court (which order may also be the Sale Order), in
form reasonably acceptable to Seller and Buyer, on notice other parties to such
agreement(s) and subject to the consent of such other parties if necessary,
authorizing and providing for (a) the assumption of the assigned Executory
Contract(s) by the Seller; and (b) the valid assignment of the assigned
Executory Contract(s) to Buyer.  Buyer shall be responsible for satisfying the
conditions of Section 365(b)(1)(A) – (C) of the Bankruptcy Code to the extent
necessary to permit the assumption by Seller and the assignment to Buyer of the
assigned Executory Contract(s) (all such obligations, including without
limitation any payments required to be made, the “Cure Obligations”).  Buyer
shall have a reasonable opportunity to review and approve any proposed
Assignment Order prior to its submission to the Bankruptcy Court.
 
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6.03           The Sale Order and the Assignment Order shall have become a Final
Order (as defined in this paragraph); provided, however, that this condition may
be waived in writing by the parties.  “Final Order” shall mean an order or
judgment of the Bankruptcy Court (a) which is not the subject of a pending
appeal, petition for certiorari, or other proceeding for review, rehearing or
reargument accompanied by a stay of the transactions contemplated hereby, (b)
which has not been reversed, stayed, modified, or amended and (c) respecting
which the time to appeal from or petition for certiorari or to seek review,
rehearing or reargument of such order shall have expired, as a result of which
such order shall have become final in accordance with Rule 8002 of the
Bankruptcy Rules and other applicable law, and there shall not be in effect any
preliminary or permanent injunction, stay or order, or decree or ruling, by a
court of competent jurisdiction or by a governmental regulatory or
administrative agency preventing performance of the transactions contemplated by
this Agreement.

6.04           In the absence of such Sale Order and the Assignment Order, this
Agreement shall be deemed null and void and neither Party shall have any claim
against the other by virtue of this Agreement; provided, however that the Buyer
shall be entitled to a break-up fee in the amount of One Hundred Twenty-five
Thousand Dollars ($125,000.00) if, prior to the termination of the Agreement in
accordance with its terms, the Bankruptcy Court approves an Alternative
Transaction (as defined in this paragraph) and such Alternative Transaction is
consummated; provided further, however, that the Seller’s obligation to pay such
break-up fee, and the amount of such break-up fee, are subject to the Bankruptcy
Court’s approval.  For the purposes of this Agreement, an “Alternative
Transaction” shall mean any one of the following transactions with or by any
person or group other than the Buyer:  (a) a merger, consolidation or similar
transaction involving the Seller, or (b) a sale, lease or other disposition
directly or indirectly by merger, consolidation tender offer, share exchange or
otherwise of some or all of the Assets.
 
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ARTICLE VII
OTHER CONDITIONS OF CLOSING BY BUYER

The obligation of Buyer to consummate the transactions contemplated by this
Agreement shall be subject, at Buyer's sole discretion, to the satisfaction of
the following conditions precedent:

7.01           Representations.  All of the representations and warranties of
Seller herein contained shall be true and correct as of the date of this
Agreement, and as of the Closing Date as if expressly made on and as of the
Closing Date.

7.02           Performance of Covenants.  All of the covenants to be performed
and all of the conditions to be satisfied by Seller prior to the Closing Date
shall have been performed or satisfied on or before the Closing.

7.03           Books and Records.  Seller shall have delivered to Buyer on or
before the Closing Date all of Seller's operational books, records, data and
materials used by Seller in the conduct of the Business which are or would be
necessary or useful to Buyer in the continuation thereof.

7.04           Condition of Property.  All of the Assets shall be in the same
condition on the Closing Date as the same are as of the date hereof, ordinary
wear and tear alone excepted.

7.05           Employment of Members.  Buyer shall have entered into employment
agreements with both Stanley and Kellman, on terms acceptable to Buyer which
shall include those set forth in Schedule 7.05.

7.06           Lease for Business Premises.  Buyer and Seller’s landlord shall
have entered into a lease for the Business Premises.  Said lease shall be upon
such terms as are acceptable to Buyer, but shall include: (i) an initial term of
five (5) years; (ii) a five (5) year option to renew, exercisable by Buyer;
(iii) an option to purchase the real property during the term or any renewal of
the lease for fair market value, so long as the landlord has not sold the
property to a bona fide arm’s length purchaser; (iv) a right of first refusal to
purchase the property during the term of the lease, or any renewal thereof, on
the same terms as contained in any bona fide arm’s length offer to purchase
received by the landlord, provided, however, that Buyer’s exercise of that right
of first refusal shall require Buyer to pay landlord Twenty-five Thousand
Dollars ($25,000) more than said bona fide arm’s length offer (Buyer’s failure
to exercise the right of first refusal within thirty (3) days of notice of a
bona fide offer shall terminate Buyer’s option to purchase upon the closing of
landlord’s sale of the property to another party); and (v) the rent payable
under such lease shall be “triple net,” with an annual base rent of $80,000
(payable in monthly installments) for the first year, and shall increase by five
percent (5%) per year during the term or any renewal thereof.
 
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7.07           Additional Contingencies.  This Agreement is contingent upon (i)
Buyer’s obtaining a commitment for financing in an amount and upon terms
satisfactory to Buyer in its sole discretion; and (ii) Buyer's obtaining any
required governmental permits, approvals or consents relating to the operation
of the Business.

7.08           Delivery of Documents.  Buyer shall have received all such
documents, certificates, opinions and papers required of Seller pursuant to the
terms of this Agreement, or which shall have been reasonably requested by Buyer
in connection therewith, in form and substance as approved prior to the Closing
by Underberg & Kessler LLP, attorneys for Buyer, including but not limited to
the following:

   A.          A duly executed warranty Bill of Sale to the Assets.

   B.           A new lease for the Business Premises has been executed and
received by Buyer.

   C.           A certified copy of the Sale Order and Assignment Order,
accompanied by a certification by Seller’s counsel that they constitute Final
Orders as herein defined.

   D.           A certificate jointly from Seller and Members dated as of the
Closing Date, to the effect that, as of the Closing Date, all of the
representations and warranties of Seller contained in this Agreement and the
Schedules hereto are true and correct and that all of the covenants and
conditions contained in this Agreement to be performed or satisfied by Seller
prior to the Closing have been performed or satisfied.
 
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ARTICLE VIII
OTHER CONDITIONS OF CLOSING BY SELLER

The obligation of Seller to consummate the transactions contemplated by this
Agreement shall be subject, at Seller’s sole option, to the satisfaction of the
following conditions precedent:

8.01           Representations.  All of the representations and warranties of
Buyer herein contained shall be true and correct as of the date of this
Agreement, and as of the Closing Date as if made on and as of the Closing Date.

8.02           Covenants and Conditions.  All of the covenants to be performed
and all of the conditions to be satisfied by Buyer prior to the Closing Date
shall have been performed or satisfied on or before the Closing.

8.03           Members’ Equipment Lease Guarantees.  The lessors on any and all
Personal Property Leases assigned to Buyer shall have released any guarantees by
which the Members secured payment of such leases by the Seller.

8.04           Deliveries.  Seller shall have received all such documents,
payments, certificates, notes, instruments, opinions and papers required of
Buyer pursuant to the terms of this Agreement,  in form and substance as
approved prior to the Closing by Seller's Attorney, including expressly, but not
limited to, the following:

   A.           Payment of the Purchase Price to the extent and in the manner
set forth in Paragraph 1.05 hereof.

   B.           A certificate of resolutions adopted by Buyer's Board of
Directors or Executive Committee thereof authorizing the execution of this
Agreement, the consummation of the transactions contemplated hereby and the
execution and delivery of the documents required to be delivered hereunder,
appropriately certified by Buyer's corporate Secretary.

   C.           A certificate of Buyer, dated as of the Closing Date, to the
effect that, as of the Closing Date, all of the representations and warranties
of Buyer contained in this Agreement are true and correct and that all of the
covenants and conditions contained in this Agreement to be performed or met by
Buyer prior to Closing have been performed or met, such certificate to be
executed by Buyer's President.

   D.           Bankruptcy Court approval of this Agreement.
 
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ARTICLE IX
CONTINGENT FINANCIAL MATTERS

9.01           Tax Status and Effect.  It is understood and agreed that neither
Seller nor Buyer has made any representations to the other as to the tax status
or tax effect of the transactions contemplated by this Agreement, and each of
the Parties hereto is therefore separately taking counsel as to such matters and
each is assuming, subject only to the express and specific provisions of this
Agreement, the tax, if any, which may be incurred by reason of the carrying out
of the terms and provisions hereof.

9.02           Sales or Use Tax.  In the event that any sales or use tax shall
be due to any state or local governmental authority by reason of the sale of the
Assets, such tax shall be borne by Buyer; provided, however, that Seller shall
be solely responsible for any sales taxes arising out of the operation of the
Business prior to Closing.

9.03           Brokerage Commissions.  Seller and Buyer represent and warrant,
each to the other, that this Agreement and the transactions contemplated
hereunder were brought about without the assistance of any broker, person or
firm, and that no one is entitled to a commission, fee or payment of any kind
relative to this Agreement or the transactions contemplated hereby.

9.04           Risk of Loss.  All risk of loss to the Assets shall remain on
Seller until completion of the Closing.

9.05           Expenses of Parties.  All expenses involved in the preparation,
authorization and consummation of this Agreement, including, without limitation,
all fees and expenses of agents, representatives, counsel and accountants, shall
be borne solely by the Party which shall have incurred the same, and the other
Parties shall have no liability with respect thereto.
 
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ARTICLE X
TERMINATION

This Agreement may be terminated, and the transactions contemplated hereby may
be abandoned, by written notice promptly given to the other parties hereto, at
any time prior to the Closing Date:

10.01         By mutual written consent of the Seller and Buyer;

10.02         By either Seller or Buyer if any permanent injunction or other
order of a court or competent authority or governmental agency which prevents
the consummation of the transaction shall have become final and not appealable;

10.03         By either Seller or Buyer upon ten (10) days written notice of
such termination to the other parties, if the Closing shall not have occurred on
or prior to __________; provided that the failure of the Closing to occur by
such date is not due in whole or in part to a material breach of the terminating
party of such party’s representations, warranties or covenants under this
Agreement;

10.04         By either Seller or Buyer if either (A) the Sale Order or the
Assignment Order is not entered by _______; or (B) the Sale Order or the
Assignment Order is not a Final Order by ________ (or if the Sale Order or the
Assignment Order was entered in the ten (10) days prior to such date and no
appeal has been perfected, eleven (11) days after the date of the Sale Order or
Assignment Order was entered; or (C) the Bankruptcy Court shall have denied the
Sale order or the Assignment Order;

10.05         By either Seller or Buyer if the Closing has not occurred by the
date which is thirty days after the last to occur of the date of the Sale Order
and the date of the Assignment Order;

10.06         Automatically, without further action by either Party, if the
Bankruptcy Court approves an Alternative Transaction, as defined in Paragraph
6.04;

10.07         By Buyer if there has been a breach by Seller of any of its
representations, warranties or covenants that would result in the condition set
forth in Article VII not being met, which breach is not curable, or if curable,
is not cured within thirty (30) days after notice of such breach is given by
Buyer to Seller; or by Seller if there has been a breach by Buyer of any of its
representations, warranties or covenants that would result in the condition set
forth in Article VIII not being met, which breach is not curable, or if curable,
is not cured within thirty (30) days after notice of such breach is given by
Seller to Buyer.
 
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ARTICLE XI
MISCELLANEOUS PROVISIONS

11.01         Survival of Representations and Warranties.  All representations
and warranties of the Seller and the Members contained in this Agreement shall
survive the execution and delivery of this Agreement, the consummation of the
transactions contemplated hereby and the trans­fer and conveyance of the Assets.

11.02         Buyer's Liability.  It is understood and agreed that all of
Buyer's obligations and responsibilities hereunder are solely those of Secuprint
Inc., and that Document Security Systems, Inc., has, and shall have, no personal
liability with respect thereto.

11.03         Binding Effect; Assignment.  This Agreement shall be binding upon
and inure to the benefit of the Parties hereto and their respective personal
representatives, successors and assigns.

11.04         Entire Agreement.  This Agreement contains the entire
understanding and agreement among the Parties hereto and supersedes any prior
understandings, memoranda or other written or oral agreements between or among
any of them respecting the within subject matter.  There are no representations,
agreements, arrangements or understandings, oral or written, between or among
any of the Parties relating to the subject matter of this Agreement which are
not fully expressed herein.

11.05         Modifications; Waiver.  No modification or waiver of this
Agreement or any part hereof shall be valid or effective unless in writing and
signed by the Party or Parties sought to be charged therewith, no waiver of any
breach or condition of this Agreement shall be deemed to be a waiver of any
other subsequent breach or condition, whether of like or different nature, and
no waiver of any breach of this Agreement by any Members shall be deemed to be a
waiver of any other Members for the same breach or any subsequent breach,
whether of like or different nature.  No course of dealing between or among any
of the Parties hereto will be deemed effective to modify, amend or discharge any
part of this Agreement or the rights or obligations of any Party hereunder.
 
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11.06         Partial Invalidity.  If any provision of this Agreement shall be
held by a court of competent jurisdiction to be invalid or unenforceable, such
provision shall be construed so as to be limited or reduced to be enforceable to
the maximum extent compatible with the law as it shall then appear.   The total
invalidity or unenforceability of any particular provision of this Agreement
shall not affect the other provisions hereof and this Agreement shall be
construed in all respects as if such invalid or unenforceable provision were
omitted.

11.07         No Third Party Beneficiary.  None of the provisions of this
Agreement shall be for the benefit of, or enforceable by, any person or entity
which is not a Party hereto.

11.08         Notices.  Any notice or other communication required or permitted
under this Agreement shall be in writing and shall be deemed to have been duly
given (i) upon hand delivery, or (ii) on the third day following delivery to the
U.S. Postal Service as certified or registered mail, return receipt requested
and postage prepaid, or (iii) on the first day following delivery to a
nationally recognized United States overnight courier service, fee prepaid,
return receipt or other confirmation of delivery requested or (iv) when
telecopied or sent by facsimile transmission if an additional notice is also
given under (i), (ii) or (iii) above within three days thereafter.  Any such
notice or communication shall be directed to a Party at its address set forth
below or at such other address as may be designated by a party in a notice given
to all other Parties hereto in accordance with the provisions of this Paragraph.

Notice to Buyer shall
Secuprint, Inc.
be shall be sent to:
28 East Main Street
 
Rochester, New York  14614
 
Attn.:  Patrick White

with a copy to:
Underberg & Kessler LLP
 
300 Bausch & Lomb Place
 
Rochester, New York  14604
 
Attn:  Michael J. Beyma

Notice to Seller
DPI of Rochester, Inc.
shall be sent to:
1560 Emerson Street
 
Rochester, New York  14606
 
Attn.:  James Stanley

 
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with a copy to:
Lacy Katzen, LLP
 
140 East Main Street
 
Rochester, New York  14614
 
Attn.:  David D. MacKnight

11.09         Governing Law.  This Agreement shall be governed by and construed
in accordance with the laws of the State of New York pertaining to contracts
made and to be wholly performed within such state, without taking into account
conflicts of laws principles.

11.10         Jurisdiction and Venue.  DURING THE PENDENCY OF THE BANKRUPTCY
CASE, THE BANKRUPTCY COURT WILL HAVE JURISDICTION OVER ANY AND ALL DISPUTES
BETWEEN OR AMONG THE PARTIES, WHETHER IN LAW OR IN EQUITY, ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR ANY AGREEMENT CONPTEMPLATED HEREBY; PROVIDED,
HOWEVER, THAT IF THE BANKRUPTCY COURT IS UNWILLING OR UNABLE TO HEAR SUCH
DISPUTE:

   (i)           the courts of the State of New York and/or the United States
Federal Courts located in the State of New York shall have exclusive
jurisdiction over each of the Parties and such proceedings; and

   (ii)           the venue of any such action shall be in Monroe County, New
York and/or the United States District Court for the Western District of New
York.

11.11         Headings.  The headings contained in this Agreement are inserted
for convenience only and do not constitute a part of this Agreement.

11.12         Gender.  Whenever the context may require, any pronoun used herein
shall include the corresponding masculine, feminine or neuter forms and the
singular of nouns, pronouns and verbs shall include the plural and vice versa.

11.13         Fair Meaning.  This Agreement shall be construed according to its
fair meaning, the language used shall be deemed the language chosen by the
Parties hereto to express their mutual intent, and no presumption or rule of
strict construction should be applied against any Party hereto.

11.14         Counterparts.  This Agreement may be executed in several
counterparts, each of which shall be deemed an original, and all of said
counterparts shall together constitute but one and the same instrument which may
be sufficiently evidenced by one counterpart.
 
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IN WITNESS WHEREOF, the Parties hereunto have duly executed this Agreement on
November 6, 2008.
 

 
BUYER: SECUPRINT, INC.
           
 By:
/s/ Patrick White
     
Patrick White, President
           
SELLER: DPI OF ROCHESTER, INC.
           
 By:
/s/ James Stanley
     
James Stanley, President
 

 
JAMES W. STANLEY:
         
/s/ James W. Stanley
   
(a Member, per Recital V)
         
MATTHEW KELLMAN:
         
/s/ Matthew Kellman
   
(a Member, per Recital V)
 

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