GUARANTY AGREEMENT
 
For valuable consideration, the receipt whereof by each of the undersigned is
hereby acknowledged, and to induce RBS CITIZENS, N.A., a national banking
association, having an office and place of business located at 833 Broadway,
Albany, New York 12207, Attn: Jeffrey Morse (hereinafter called “Lender”) to
extend credit to PREMIER PACKAGING CORPORATION, a New York corporation having an
address at 6 Framark Drive, Victor, New York 14564 (hereinafter called the
“Principal”), each of the undersigned, DOCUMENT SECURITY SYSTEMS, INC., a
corporation formed under the laws of the State of New York with offices at 28
East Main Street, Rochester, New York 14614 (“DSS”), SECUPRINT, INC., a
corporation formed under the laws of the State of New York with offices at 1650
Emerson Street, Rochester, New York 14606 (“Secuprint”), PLASTIC PRINTING
PROFESSIONAL, INC., a corporation formed under the laws of the State of New York
with offices at 151 Park Lane, Brisbane, California 94005  (“Plastic Printing,”)
(each of DSS, Secuprint and Plastic Printing hereinafter individually and
collectively called the “Guarantor”), does hereby unconditionally and
irrevocably, jointly and severally guarantee to said Lender and to the
endorsees, transferees, successors or assigns of either this Guaranty or any of
the obligations secured hereunder, or both, the prompt payment (and not merely
the collectability) of interest and principal under that certain Promissory Note
in the principal sum of ONE MILLION TWO HUNDRED THOUSAND DOLLARS U.S.
($1,200,000.00) dated on or about even date herewith given by Principal and
payable to Lender, including any renewals, modifications or extensions thereof
(the “Note”), and does hereby agree that if the Note is not paid by the
Principal in accordance with its terms, or if all sums which may hereafter
become due from Principal to Lender are not paid by Principal in accordance with
its terms, the Guarantor will immediately do so upon demand by Lender.
 
Guarantor does further covenant and agree that it shall at all times defend,
indemnify and hold harmless Lender against and from any and all claims, suits,
actions, debts, damages, costs, losses, obligations, judgments, liabilities,
charges and expenses of any nature whatsoever, suffered or incurred by Lender,
resulting from any written representation or warranty made or information
provided to Lender by the Principal, Guarantor or any party on their behalf in
connection with the Loan Documents (hereinafter defined) proving to have been
fraudulently made or constituting an intentional misrepresentation in any
respect on the date on which it was made; or if the Principal or Guarantor or
any of their agents or principals intentionally destroy all or any part of the
Property secured by the Mortgage or fraudulently divert any assets of Principal.
 
This indemnification shall in no manner affect, modify, impair or diminish any
other obligations, guaranties or indemnification provided by the undersigned
relating to the Note, Mortgage or the Loan Documents as herein defined.
 
This is a continuing Guaranty and may not be revoked by Guarantor.  Upon demand
made by Lender upon Guarantor after a failure by the Principal to pay the Note
in accordance with its terms, Guarantor shall promptly pay to Lender the
principal balance of the Note, plus all accrued interest, any applicable
prepayment premiums, costs, expenses and other charges that may be due to the
Lender.

 
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The obligations covered by this Guaranty include the obligations of the
Principal under the Note and the obligations of Principal under a certain
Mortgage and Security Agreement dated of even date herewith from the Principal,
which further secures the Principal’s indebtedness (the “Mortgage”) and the
other Loan Documents (as defined in the Mortgage), either now existing, or
hereafter coming into existence, and any renewals or extensions, in whole or in
part, together with all damages, losses, costs, interest, charges, expenses,
including reasonable attorneys’ fees and liabilities of every kind, nature and
description suffered or incurred by Lender arising in any manner out of, or in
any way connected with or growing out of the Note and the Mortgage.
 
Guarantor hereby consents and agrees that Lender may, at any time, either with
or without consideration, surrender any property or other security of any kind
or nature whatsoever held by it or by any person, firm or corporation on its
behalf, or for its account securing any indebtedness or liability covered by
this Guaranty, or substitute for any collateral so held by it, other collateral
of like kind, or of any kind, or modify the terms of the Note without notice to
or further consent for the Guarantor and such surrender, substitution or
modification shall not in any way affect the liability of the Guarantor
hereunder.
 
Lender shall have the right to proceed against the Guarantor or the property
described in the Mortgage (the “Property”) without first proceeding against the
Principal.
 
Guarantor hereby agrees that extensions of time in respect of any obligation
covered by this Guaranty may be granted by Lender to the Principal without
notice to the Guarantor and without thereby affecting the liability of the
Guarantor under this Guaranty in any respect; the Guarantor waives notice of
acceptance of this Guaranty by Lender, or of the extension, modification or
renewal of any obligation of the Principal to which it relates, or of any
default by the Principal.  The Guarantor agrees that no act or omission on the
part of Lender shall in any way affect or impair this Guaranty.  Guarantor
further waives any demand by Lender, as well as any notice of non-performance or
non-payment by the Principal herein or any statutory provision requiring
Lender’s exhaustion of remedies or instituting of suit against the Principal
prior to exercising its rights under this Guaranty.
 
This Guaranty is made subject to all the terms, conditions, agreements or
stipulations contained in the Note evidencing the obligations hereby guaranteed.
 
In the event that this Guaranty is executed by more than one party, the
liability of such parties shall be joint and several.  A separate action or
actions may be brought and prosecuted against each or all Guarantors, whether or
not action is brought against any other person or whether or not any other
person is joined in such action or actions.
 
In the event it becomes necessary for Lender to enforce this Guaranty by legal
action, the Guarantor hereby waives the right to be sued in the county of
Guarantor’s residence; and if this Guaranty is placed in the hands of an
attorney at law for enforcement, Guarantor hereby agrees to pay the costs
thereof, and a reasonable sum as an attorney’s fee for such
enforcement.  Anything in this Guaranty to the contrary notwithstanding, if from
any circumstances whatever fulfillment of any provisions which shall be due
under the Note shall involve transcending the limit of validity prescribed by
the usury statutes of the State of New York or any other law of the State of New
York, then in fact the obligations to be fulfilled shall be reduced to the limit
of such validity so that in no event shall enforcement of remedies be possible
under this Guaranty in excess of the limit of such validity.

 
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The Guaranty and all obligations of Guarantor hereunder shall cease and
determine at the time Lender receives payment in full of all sums payable to it
by the Principal under the Note.
 
The Guarantor hereby agrees to indemnify the Lender and hold it harmless from
and against any and all losses, expenses and damages incurred by the Lender in
connection with or as a result of the assertion of any and all claims for the
return of moneys (including the proceeds of any collateral) received or applied
by the Lender in partial or full payment of the Indebtedness, including without
limitation all claims based upon allegations that moneys so received by the
Lender constituted trust funds under the Lien Law of the State of New York or
other applicable laws, or that the payment of such moneys or the giving of such
collateral to the Lender constituted a preference or fraudulent transfer under
the Bankruptcy Code or any other applicable statute.  This indemnity shall
extend to and include all moneys recovered from or paid over by the Lender as a
result of such claims, regardless of the basis thereof, and all costs and
expenses including attorneys’ fees incurred by the Lender in investigating,
evaluating and contesting such claims, regardless of the outcome.  This
indemnity may be terminated only in conjunction with the termination of this
Agreement in the manner herein provided, except that the Guarantor’s liability
pursuant to this paragraph shall survive any termination of this Agreement to
the extent of all moneys (including proceeds of any collateral) received by the
Lender on account of that portion of the Indebtedness (and any renewals,
modifications or extensions thereof, whether made before or after such
termination) for which the Guarantor under the terms of this Agreement remains
liable notwithstanding such termination, whether such moneys are recovered from,
or paid over by, the Lender before or after such termination.
 
Guarantor agrees that this Guaranty shall inure to the benefit of and may be
enforced by Lender, or its endorsees, transferees, successors and assigns, and
shall be binding upon and enforceable against the Guarantor and Guarantor’s
legal representatives, heirs, successors and/or assigns.
 
Guarantor expressly agrees that the Lender may, in its sole and absolute
discretion, without notice to or further assent of the Guarantor and without in
any way releasing, affecting or impairing the obligations and liabilities of the
Guarantor hereunder:  (i) waive compliance with, or waive any defaults under, or
grant any other indulgences with respect to the Note; (ii) modify, amend or
change any provisions of the Note;  (iii) grant extensions or renewals of or
with respect to the Note, and/or effect any release, compromise or settlement in
connection with the Note; (iv) make advances for the purpose of performing any
term or covenant contained in the Note; (v) assign, sell or otherwise transfer
the Note or this Guaranty or any interest therein or herein, and (vi) deal in
all respects with the Principal as if this Guaranty was not in effect.  All of
the obligations of the Guarantor under this Guaranty shall be unconditional and
irrevocable, irrespective of the genuineness, validity, regularity or
enforceability of the Note or the Mortgage or any other circumstances which
might otherwise constitute a legal or equitable discharge of a surety or
guarantor and to the extent of any inconsistency or conflict between this
Guaranty and the Note or the Mortgage, this Guaranty shall control.

 
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The liability of the Guarantor under this Guaranty shall be primary, direct and
immediate and not conditional or contingent upon pursuit by the Lender of any
remedies it may have against the Principal, its successors and assigns, with
respect to the Note or the Mortgage, whether pursuant to the terms thereof or by
law.  Without limiting the generality of the foregoing, the Lender shall not be
required to make any demand on the Principal or to sell at foreclosure or
otherwise pursue or exhaust its remedies against the Property covered by the
Mortgage or any part thereof or against the Principal before, simultaneously
with, or after enforcing its rights and remedies hereunder against the
Guarantor.  Any one or more successive and/or concurrent actions may be brought
hereon against the Guarantor either in the same action, if any, brought against
the Principal in separate actions as often as the Lender may deem advisable.
 
The Guarantor hereby expressly waives (i) presentment and demand for payment of
the principal or the interest on the Note and protest of non-payment, (ii)
notice of acceptance of this Guaranty and of presentment, demand and protest,
(iii) notice of any default hereunder or under the Note and of all indulgences,
(iv) demand for observance, performance, or enforcement of any terms or
provisions of this Guaranty, the Note or Mortgage, and (v) all other notices and
demands otherwise required by law which the Guarantor may lawfully waive.  The
Guarantor further agrees that in the event this Guaranty shall be enforced by
suit or otherwise the Guarantor will reimburse the Lender, upon demand, for all
expenses incurred in connection therewith, including, without limitation,
reasonable attorneys’ fees.
 
Anything herein or in the Note or the Mortgage to the contrary notwithstanding,
the Lender, at its option, may, as to the Guarantor, accelerate the indebtedness
evidenced and secured by the Note and Mortgage in the event of the making by the
Guarantor of an assignment for the benefit of creditors or appointment of a
trustee or receiver for the Guarantor or for any property of the Guarantor or
the commencement of any proceeding by or against the Guarantor under any
bankruptcy reorganization, arrangement, insolvency, readjustment, receivership
or like law or statute.
 
If the Guarantor shall advance any sums to the Principal or its successors or
assigns, or if the Principal or its successors or assigns shall hereafter become
indebted to the Guarantor, such sums and indebtedness shall be subordinate in
all respects to the amounts then or thereafter due and owing to the Lender under
the Note and the Mortgage.  Nothing herein contained shall be construed to give
the Guarantor any right of subrogation in and to the Note and the Mortgage or
all or any part of the Lender’s interest therein, until all amounts owing to the
Lender have been paid in full.
 
All rights and remedies afforded to the Lender by reason of this Guaranty or by
law are separate and cumulative, and the exercise of one shall not in any way
limit or prejudice the exercise of any other such rights or remedies.  No delay
or omission by the Lender in exercising any such right or remedy shall operate
as a waiver thereof.  No waiver of any rights and remedies hereunder, and no
modification or amendment hereof, shall be deemed made by the Lender unless in
writing and duly signed by the Lender.  Any such written waiver shall apply only
to the particular instance specified therein and shall not impair the further
exercise of such right or remedy or of any other right or remedy of the Lender,
and no single or partial exercise of any right or remedy hereunder shall
preclude any other or further exercise thereof or any other right or remedy.

 
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The Lender is hereby given a lien upon and a security interest in all property
of the Guarantor now or at any time hereafter in the possession of the Lender in
any capacity whatsoever including, but not limited to, any balance or share in
any deposit, trust or agency account as additional security for payment of the
Indebtedness, and Lender shall, in addition to those rights granted to the
Lender in this or any other agreement between the Lender and the Guarantor, have
all the rights and remedies under the Uniform Commercial Code and any other
applicable law as shall from time to time be in effect in New York.
 
The Lender shall have the right, whenever it has the right to declare the
Indebtedness to be due and payable, without further action by it, to set-off
against the Indebtedness all money owed by Lender in any capacity to the
Guarantor, whether or not due, and the Lender shall be deemed to have exercised
such right of set-off and to have made a charge against any such money
immediately upon the accrual of such right even though such charges were made or
entered on the books of the Lender at a subsequent time.
 
The Guarantor shall provide to the Lender annually, financial statements on the
Lender’s standard form or other form acceptable to the Lender, including a
listing of contingent liabilities and disclosure of all cash flow from and
equity in real estate investments/ventures, all in form and content satisfactory
to Lender, within one hundred twenty (120) days of year end.  The Guarantor
shall provide to Lender a copy of the Guarantor’s federal income tax return
within thirty (30) days after the filing thereof.  In the event the Guarantor’s
federal tax return filing is on extension, then the tax return shall be
furnished to Lender within thirty (30) days of filing.
 
No Guarantor shall transfer, pledge, grant a security interest in, or permit any
other encumbrance of his ownership interest in the Principal or the sole member
of the Principal without the prior written consent of the Lender.
 
The Guarantor acknowledges that this Guaranty and the Guarantor’s obligations
under this Guaranty are and shall at all times continue to be absolute and
unconditional in all respects, and shall at all times be valid and enforceable
irrespective of any other agreements or circumstances of any nature whatsoever
which might otherwise constitute a defense to this Guaranty and the obligations
of the Guarantor under this Guaranty or the obligations of any other person or
party (including, without limitation, the Principal) relating to this Guaranty
or the obligations of the Guarantor hereunder or otherwise with respect to the
Indebtedness of the Principal.  This Guaranty sets forth the entire agreement
and understanding of Lender and Guarantor, and Guarantor absolutely,
unconditionally and irrevocably waives any and all right to assert any defense,
set-off, counterclaim or cross-claim of any nature whatsoever with respect to
this Guaranty or the obligations of the Guarantor under this Guaranty or the
obligations of any other person or party (including, without limitation,
Principal) relating to this Guaranty or the obligations of the Guarantor under
the Guaranty or otherwise with respect to the Indebtedness in any action or
proceeding brought by the holder hereof to collect the Indebtedness or any
portion thereof, or to enforce, the obligations of the Guarantor under this
Guaranty.  The Guarantor acknowledges that no oral or other agreements,
understandings, representations or warranties exist with respect to this
Guaranty or with respect to the obligations of the Guarantor under this
Guaranty, except as specifically set forth in this Guaranty.

 
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The Guarantor agrees that any action or proceeding to enforce the provisions of
the Agreement may be commenced by Lender in New York State Supreme Court in
Monroe County, or in the District Court of the United States for the Western
District of New York, and the Guarantor waives personal service of process and
agrees that a summons and complaint commencing an action or proceeding in any
such court shall be properly served and shall confer personal jurisdiction if
served by registered mail to the Guarantor, or as otherwise provided by the laws
of the State of New York or the United States.
 
Guarantor represents and warrants to Lender that they have examined or had an
opportunity to examine the Note and the Mortgage that they have full power,
authority and legal right to execute and deliver this Guaranty, and that this
Guaranty is a binding legal obligation of the Guarantor, and is fully
enforceable against the Guarantor in accordance with its terms.
 
Guarantor shall mean all of the undersigned and as used herein, Guarantor shall
be deemed, whenever appropriate in the context, to include the singular and
plural.
 
This Guaranty may be executed in one or more counterparts, each of which shall
be deemed to be an original and all of which taken together shall constitute one
agreement.
 
WAIVER OF JURY TRIAL.  GUARANTOR HEREBY, AND LENDER BY ITS ACCEPTANCE HEREOF,
EACH WAIVE THE RIGHT OF A JURY TRIAL IN EACH AND EVERY ACTION ON THIS GUARANTY,
THE NOTE OR THE MORTGAGE, IT BEING ACKNOWLEDGED AND AGREED THAT ANY ISSUES OF
FACT IN ANY SUCH ACTION ARE MORE APPROPRIATELY DETERMINED BY A JUDGE SITTING
WITHOUT A JURY;  FURTHER, GUARANTOR HEREBY CONSENTS AND SUBJECTS ITSELF TO THE
JURISDICTION OF COURTS OF THE STATE OF NEW YORK AND, WITHOUT LIMITING THE
GENERALITY OF THE FOREGOING, TO THE VENUE OF SUCH COURTS IN THE COUNTY IN WHICH
THE PROPERTY IS LOCATED.
 
REMAINDER OF PAGE INTENTIONALLY LEFT BLANK - SIGNATURE PAGE FOLLOWS

 
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IN WITNESS WHEREOF, the Guarantor has hereunto executed this Guaranty this
30th day of August 2011.
 
GUARANTOR:
 
DOCUMENT SECURITY SYSTEMS, INC.
 
By:
/s/ Philip Jones
Name: Philip Jones
Title: CFO
 
SECUPRINT, INC.
 
By:
/s/ Philip Jones
Name: Philip Jones
Title: Secretary & Treasurer
 
PLASTIC PRINTING PROFESSIONAL, INC.
 
By:  
/s/ Philip Jones
Name: Philip Jones
Title: Secretary & Treasurer

 
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