CONSULTING AGREEMENT

 

This CONSULTING AGREEMENT (the “Agreement”) is made as of the 12th day of
February, 2018 (the “Effective Date”), by and between DOCUMENT SECURITY SYSTEMS,
INC. (the “Company”), a New York corporation having offices located at 200 Canal
View Boulevard, Suite 300, Rochester, New York 14623, and PAMELA AVALLONE (the
“Consultant”), a resident of the State of Florida.

 

RECITALS:

 

WHEREAS, Consultant currently serves as a member of the Company’s Board of
Directors;

 

WHEREAS, Company is desirous of engaging Consultant as an outside advisor to
provide services relating to intellectual property matters involving the
Company;

 

WHEREAS, Company is engaged in the business of intellectual property
development;

 

WHEREAS, Company desires to retain Consultant to provide the consulting services
defined in Section 2(a)(i), below, commencing on the Effective Date; and

 

WHEREAS, Company and Consultant recognize that in the course of providing
services to Company, Consultant will be exposed to and have access to certain
confidential, material non-public information of Company, and that there is a
need for Company to protect such confidential information and any “proprietary
property” derived therefrom, from unauthorized use and disclosure.

 

PROVISIONS:

 

NOW, THEREFORE, in consideration of the mutual covenants and promises herein
contained, and for other good and valuable consideration the receipt and
sufficiency of which are expressly acknowledged, the parties hereby agree as
follows:

 

1. Appointment. By this Agreement, the Company appoints Consultant, and
Consultant accepts such appointment, to provide advice and consulting services
to the Company, in accordance with the terms and provisions of this Agreement.

 

2. Duties and Responsibilities.

 

(a) Services. Consultant shall provide general intellectual property guidance on
all of the Company’s intellectual property matters during the Term
(collectively, the “Services”).

 

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3. Term and Termination.

 

(a) Term. Unless earlier terminated as provided in this Section 3, the term of
this Agreement shall commence on the Effective Date and shall continue for a
period of four months from the Effective Date (the “Term”), at which time it
will expire without the requirement of notice by either party.

 

(b) Breach with Right to Cure. Either party may immediately terminate this
Agreement in the event the other party breaches a material term or provision of
this Agreement and fails to cure such breach within fifteen (15) days after
receiving written notice of the breach.

 

(c) Breach of Representations and Warranties. The Company may terminate this
Agreement immediately upon written notice to Consultant in the event of any
breach by Consultant of Sections 5 or 6 hereof.

 

4. Compensation; Expenses.

 

(a) Compensation. Commencing on the Effective Date, Consultant will be paid cash
compensation of $7,500 per month for the Term.

 

(b) Expenses. The Company will reimburse Consultant for all reasonable and
necessary business and travel expenses incurred by Consultant in performing the
Services, subject to receipt of a written request for reimbursement, accompanied
by appropriate supporting documentation. Consultant may request reimbursement
not more frequently than once every month during the Term of this Agreement. Any
expense reimbursement request that is anticipated to exceed $500 must be
approved in advance by Company.

 

5. Confidential Information.

 

(a) Definition of Confidential Information. “Confidential Information” means any
and all patents, patents-pending, source-code, trade secrets, know-how,
confidential knowledge, customer information, financial information, or any
other proprietary information existing as of the date of this Agreement, or
thereafter developed, pertaining to Company, its affiliates and subsidiaries, or
any of their respective existing or prospective clients, customers, or
consultants. By way of illustration but not limitation, “Confidential
Information” includes (i) inventions, ideas, concepts, improvements,
discoveries, trade secrets, processes, data, programs, knowledge, know-how,
designs, techniques, formulas, test data, computer code, other works of
authorship and designs whether or not patentable, copyrightable, or otherwise
protected by law; (ii) information regarding research, development, new products
and services, marketing plans and strategies, merchandising and selling,
business plans and processes, data models, strategies, forecasts, projections,
profits, investments, operations, financings, records, budgets and unpublished
financial statements, licenses, prices and costs, suppliers and customers; and
(iii) identity, requirements, preferences, practices and methods of doing
business of specific parties with whom a party transacts business, and
information regarding the skills and compensation of employees of such party and
independent contractors performing services for such party.

 

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(b) Confidentiality Obligations. Consultant acknowledges that irreparable injury
and damage may result from disclosure of the Confidential Information to third
parties or its use for purposes other than those connected with the Services.
Consultant covenants and agrees, indefinitely:

 

(i) To hold the Confidential Information in strictest confidence.

 

(ii) Not to disclose Confidential Information to any third party except as
specifically authorized herein or as specifically authorized by Company, and to
use all precautions necessary to prevent the unauthorized disclosure of the
Confidential Information, including without limitation, protection of documents
from theft, unauthorized duplication and discovery of contents, and restrictions
on access by other persons to the Confidential Information.

 

(iii) Not to make or use any copies, synopses or summaries of oral or written
material made available by Company to Consultant, except as are necessary to
carry out Consultant’s duties and/or obligations as a Consultant.

 

(iv) In the event of disclosure in accordance with Section 5(b)(ii) hereof, to
limit disclosure to persons with a bona fide need to know the Confidential
Information, to communicate to all persons to whom such Confidential Information
is made available the strictly confidential nature of such Confidential
Information and to obtain from all such persons an agreement in writing to be
bound by the restrictions imposed by this Agreement.

 

(v) In the event Consultant is required by law to disclose such Confidential
Information, to provide Company with prompt written notice of such requirement
so that Company may seek a protective order or other appropriate remedy and/or
waive compliance with the provisions of this Agreement; in the event that such
protective order or other remedy is not obtained, or that Company waives
compliance with the provisions of this Agreement in writing, to furnish only
that portion of Confidential Information that is legally required and to use its
best efforts to obtain reliable assurance that confidential treatment will be
accorded to that portion of the Confidential Information to be disclosed.

 

(c) Return of Confidential Information. Upon Company’s request and upon the
termination of this Agreement, Consultant will promptly return to Company all
written material and other documentation which includes any of the Confidential
Information, and will, at Company’s request, provide Company with a written
certification that Consultant has done so.

 

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6. Representations and Warranties; Indemnification.

 

(a) Consultant hereby represents and warrants to Company as follows:

 

(i) Consultant is authorized to enter into this Agreement and perform as
contemplated herein;

 

(ii) Consultant will perform hereunder in compliance with all applicable U.S.
and international laws;

 

(iii) That Services will be performed in a diligent and professional manner,
consistent with generally accepted industry standards;

 

(iv) That Consultant’s performance under this Agreement will not violate any
contract, agreement, or other document to which Consultant is subject, or any
provision of state or federal law.

 

7. General.

 

(a) Notices. All notices under this Agreement may be given by email PDF,
personal delivery, by nationally recognized overnight courier, by certified
mail, return receipt requested, enclosed in a duly post-paid envelope and
addressed to the post office address provided by the party to receive notice.
Any notice to Company sent pursuant to this Section 7(a) shall be addressed to
the Company’s General Counsel.

 

(b) Independent Contractor. Consultant is, and at all times will be, an
independent contractor. Nothing in this Agreement shall be deemed to create an
employer/employee, principal/agent, or joint venture relationship. Unless
expressly agreed to in writing, neither party has the authority to enter into
any contracts on behalf of the other party or otherwise act on behalf of the
other party.

 

(c) Governing Law and Jurisdiction. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York, without
reference to its conflicts of law principles. The federal and state courts
residing in the State of New York shall have exclusive jurisdiction over any
claim brought under this Agreement, and the parties hereby irrevocably consent
to the personal jurisdiction of such courts.

 

(d) Entire Agreement. This Agreement shall constitute the entire agreement
between the parties and supersedes and replaces all other agreements oral and
written with respect to its subject matter. This Agreement may not be modified,
amended or terminated except by a writing signed by all parties to it.

 

(e) Assignment. Consultant may not assign any of its rights or obligations under
this Agreement to any other person or entity (including any subcontractor). All
of the terms and conditions of this Agreement shall be binding upon, shall inure
to the benefit of, and shall be enforceable by the respective successors and
assigns of the parties. Any attempted assignment in conflict with the terms
herein shall be deemed null and void.

 

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(f) Waiver. No waiver by Company of any failure by Consultant to keep or perform
any promise of condition of this Agreement shall be a waiver of any proceeding
or succeeding breach of the same or any other promise or condition. No waiver of
Company of any right shall be construed as a waiver of any other right.

 

(g) Severability. If any provision of this Agreement shall be held invalid or
unenforceable by competent authority, 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.

 

(h) Counterparts. This Agreement may be executed in multiple counterparts, each
of which will for all purposes be deemed to be an original and all of which will
constitute one and the same Agreement. A signature delivered on any counterpart
by e-mail PDF, facsimile or other electronic means will be deemed an original
signature to this Agreement.

 

IN WITNESS WHEREOF, each of the parties hereto has executed this Agreement as of
the Effective Date.

 

  DOCUMENT SECURITY SYSTEMS, INC.         By: /s/ Jeffrey Ronaldi     Jeffrey
Ronaldi, CEO           /s/ Pamela Avallone     Pamela Avallone, Consultant

 

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