Unassociated Document


    


    DOCUMENT
SECURITY SYSTEMS, INC.

     

    SUBSCRIPTION
AGREEMENT

     

    NONE
OF THE SECURITIES OFFERED PURSUANT TO THIS SUBSCRIPTION AGREEMENT HAVE BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”) OR THE
SECURITIES LAWS OF ANY U.S. STATE OR ANY FOREIGN JURISDICTION AND ARE BEING
OFFERED AND SOLD IN RELIANCE ON EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF
THE ACT AND SUCH LAWS.  SUCH UNITS, THE SHARES OF COMMON STOCK THAT
COMPRISE A PART OF THE UNITS, THE WARRANTS THAT COMPRISE A PART OF THE UNITS AND
THE SHARES ISSUABLE UPON EXERCISE OF SUCH WARRANTS MAY NOT BE OFFERED FOR SALE,
SOLD, TRANSFERRED, PLEDGED OR HYPOTHECATED TO ANY PERSON AT ANY TIME IN THE
ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT COVERING SUCH SECURITIES UNDER
THE ACT OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY TO THE EFFECT THAT
SUCH REGISTRATION IS NOT NECESSSARY.

     

    INVESTMENT
IN THE COMPANY IS HIGHLY SPECULATIVE AND INVOLVES SUBSTANTIAL RISK, INCLUDING,
BUT NOT LIMITED TO THE RISKS SET FORTH IN THE SECTION ENTITLED “RISK FACTORS” IN
THE PRIVATE OFFERING MEMORANDUM ATTACHED HERETO. YOU SHOULD READ THE PRIVATE
OFFERING MEMORANDUM CAREFULLY BEFORE INVESTING.

    


    This
Subscription Agreement (this “Subscription Agreement”) is
entered into on January ___, 2010, by and between DOCUMENT SECURITY SYSTEMS,
INC., a New York corporation (the “Company”), and
________________________, an individual or entity (“Subscriber”). As used herein,
the Company and Subscriber are individually and respectively referred to as a
“Party” and collectively
as the “Parties.” Terms
not otherwise defined herein shall have the meanings ascribed to them in the
Private Offering Memorandum attached hereto as Exhibit A (the “Private Offering
Memorandum”).

     

    1.  Subscription.

     

    Subscriber
subscribes for and offers to purchase, and the Company agrees to issue and sell,
an equity interest in the Company (the “Units”), entitling Subscriber
to the rights of Subscribers described in the Private Offering Memorandum for a
purchase price equal to the amount set forth on the signature page below
(the “Investment Amount”), subject
to the terms and conditions set forth herein.

     

    2.  Investment
Amount.

     

    (a) Deliveries Upon
Signing.  Simultaneous with the execution of this Subscription
Agreement, Subscriber shall execute and deliver to the Company:

     

    (i)  an
Investor Questionnaire substantially in the form of Exhibit B hereto (the
“Investor
Questionnaire”); and

     

    (b) Payment of Investment
Amount.  Concurrent with the execution of this Subscription
Agreement, Subscriber shall transmit a wire transfer or check to the Company in
an amount equal to such Subscriber’s Investment Amount.   For
purposes of this Agreement, “Payment” shall mean
Subscriber’s implementation of such wire transfer or receipt by the Company of
the bank check. Subscriber funds will be maintained separate and apart from
funds of the Company.   The Parties hereby agree that Subscriber
shall not be deemed to have purchased the Units until the Company shall have
provided a Closing Notice (as defined herein).


    
      
         


      

      
         


        
          

        

      

      
         


      

    

    


    (c) Closing. The Company, at the
Company’s sole discretion, may elect to accept the subscription of the
Subscriber. The Company’s acceptance of the subscription shall be effective upon
the Company’s transmitting a notice to the Subscriber according to the notice
information for the Subscriber set forth herein informing the Subscriber of such
acceptance (“Closing
Notice”).  The Company shall use commercially reasonable
efforts to effect a closing within 21 days after receiving executed Subscription
Documents and payment of the Investment Amount.

     

    3.  The
Offering.

     

    Subscriber
understands that the details of the offering (the “Offering”) are set forth in
the Private Offering Memorandum, as may be amended or supplemented from time to
time. The Offering will terminate on, or prior to, March 1, 2010, subject to
extension and/or modification in the sole discretion of the Company, and may be
extended or modified without notice as described in the Private Offering
Memorandum.

     

    Subscriber
understands that this Subscription Agreement is not binding upon the Company
unless and until such time as (i) payment of the Investment Amount is received
by the Company, and (ii) the Company accepts Subscriber’s subscription in
writing (the “Closing
Date”).

     

    Subscriber
acknowledges that the Company reserves the right, in its sole discretion, to
accept or reject any Subscription Agreement.

     

    Subscriber
acknowledges that Subscriber has received, read, understands and is familiar
with this Subscription Agreement, any attachments, including but not limited to
the Private Offering Memorandum, as may be amended or supplemented from time to
time, and together with any other filed regulatory documents (collectively
“Offering Material”),
and Subscriber further acknowledges that Subscriber has not relied upon any
information concerning the Offering, written or oral, other than those contained
in this Subscription Agreement and the Offering Material.  Subscriber
further understands that any other information or literature, regardless of
whether distributed prior to, simultaneously with, or subsequent to, the date of
this Subscription Agreement shall not be relied upon by Subscriber in
determining whether to make an investment in the Units and Subscriber expressly
acknowledges, agrees and affirms that Subscriber has not relied upon any such
information or literature in making Subscriber’s determination to make an
investment in the Units and that Subscriber understands that, except as
otherwise provided herein, the Company is under no obligation to (and that
Subscriber does not expect it to) update, revise, amend or add to any of the
information heretofore furnished to Subscriber.

     

    4.  Representations and
Warranties of Subscriber.

     

    (a) In
order to induce the Company to accept Subscriber’s subscription, Subscriber
further represents and warrants to the Company, its Affiliates, as defined in
the Securities Act of 1933 (the “Securities Act”), and counsel
to the Company (the “Company’s
Counsel”), and their respective agents and representatives as
follows:

     

    
      	
               
      

            	
              1.

            	
              SUBSCRIBER HAS READ THE PRIVATE
      OFFERING MEMORANDUM AND EXAMINED THE RISK FACTORS SET FORTH THEREIN, AND
      UNDERSTANDS THE SPECULATIVE NATURE OF AND SUBSTANTIAL RISK INVOLVED IN
      INVESTMENT IN THE
COMPANY.

            


    


    
      
         


      

      
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              2.

            	
              If
      Subscriber has chosen to do so, Subscriber has been represented by such
      legal and tax counsel and other professionals, each of whom has been
      personally selected by Subscriber, as Subscriber has found necessary to
      consult concerning the purchase of the Units, and such representation has
      included an examination of all applicable documents and an analysis of all
      tax, financial, and securities law aspects thereof deemed to be necessary.
      Subscriber, together with Subscriber’s counsel, Subscriber’s advisors, and
      such other persons, if any, with whom Subscriber has found it necessary or
      advisable to consult, have sufficient knowledge and experience in business
      and financial matters to evaluate the information set forth in this
      Subscription Agreement and in the Offering Material and the risks of the
      investment and to make an informed investment decision with respect
      thereto. Further, Subscriber has been given the opportunity for a
      reasonable time period prior to the date hereof to ask questions of, and
      receive answers from, the Company or its representatives concerning the
      terms and conditions of the Offering and other matters pertaining to this
      investment and has been given the opportunity for a reasonable time period
      prior to the date hereof to verify the accuracy of the Company’s
      information.

            


    

     

    
      	
               
      

            	
              3.

            	
              With
      respect to the United States federal, state and foreign tax aspects of
      Subscriber’s investment, Subscriber is relying solely upon the advice of
      Subscriber’s own tax advisors, and/or upon Subscriber’s own knowledge with
      respect thereto.

            


    

     

    
      	
               
      

            	
              4.

            	
              Subscriber
      has not relied, and will not rely upon, any information with respect to
      this offering other than the information contained herein and in the
      Offering Material.

            


    

     

    
      	
               
      

            	
              5.

            	
              Subscriber
      understands that no person has been authorized to make representations or
      to give any information or literature with respect to this offering that
      is inconsistent with the information that is set forth herein and in the
      Offering Material.

            


    

     

    
      	
               
      

            	
              6.

            	
              Subscriber
      understands that, other than as provided herein and in the Offering
      Materials, no covenants, representations, or warranties have been
      authorized by or will be binding upon the Company, with regard to this
      Subscription Agreement, the performance of the Company or any expectation
      of investment returns, including any representations, warranties or
      agreements contained or made in any written document or oral communication
      received from or had with the Company, its Affiliates, Company Counsel or
      any of their respective representatives or agents. Subscriber has not
      relied upon any information or representation that may be or have been
      made or given except as permitted under this
  paragraph.

            


    

     

    
      	
               
      

            	
              7.

            	
              Subscriber
      understands that the Offering has not been, and it is not anticipated that
      the same will be, registered under the Securities Act, or pursuant to the
      provisions of the securities or other laws of any other applicable
      jurisdictions, but is being made in reliance upon the provisions of
      Section 4(2) and/or 4(6) of the Securities Act and/or Regulation D and the
      other rules and regulations promulgated thereunder, and/or upon such other
      exemption from the registration requirements of the Securities Act as may
      be available with respect to any or all of the investments in securities
      to be made hereunder. Subscriber is fully aware that the Units subscribed
      for by Subscriber are to be sold to Subscriber in reliance upon such safe
      harbor based upon Subscriber’s representations, warranties, and agreements
      as set forth herein. Subscriber is fully aware of the restrictions on
      sale, transferability and assignment of the Units (including the shares of
      Common Stock and the Warrants that comprise the Units, and the shares of
      Common Stock issuable upon exercise of such Warrants), and that Subscriber
      must bear the economic risk of Subscriber’s investment herein for an
      indefinite period of time because the offering has not been registered
      under the Securities Act and, therefore, the Securities cannot be offered
      or sold unless such offer is subsequently registered under the Securities
      Act or an exemption from such registration is available to Subscriber.
  

            


    


    
      
         


      

      
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              8.

            	
              Subscriber
      is an “accredited investor” (as defined in Rule 501 of Regulation D
      promulgated under the Securities
Act).

            


    

     

    
      	
               
      

            	
              9.

            	
              Subscriber’s
      execution and delivery of this Subscription Agreement has been duly
      authorized by all necessary action and all necessary consents have been
      obtained. Subscriber has no present intention to sell, distribute, pledge,
      assign, or otherwise transfer the Units (including the shares of Common
      Stock and the Warrants that comprise the Units, and the shares of Common
      Stock issuable upon exercise of such Warrants), which Subscriber acquires
      pursuant to this offering. Subscriber is making the investment hereunder
      solely for Subscriber’s own account and not for the account of others and
      for investment purposes only and not with a view to or for the transfer,
      assignment, resale or distribution thereof, in whole or in
      part.  Subscriber has no present plans to enter into any such
      contract, undertaking, agreement, or
  arrangement.

            


    

     

    
      	
               
      

            	
              10.

            	
              Subscriber
      agrees that Subscriber will not cancel, terminate or revoke this
      Subscription Agreement, which has been executed by Subscriber, and that
      this Subscription Agreement shall survive any sale, assignment or other
      transfer of control over, or of all or substantially all of Subscriber’s
      assets or business and Subscriber’s bankruptcy, except as otherwise
      provided pursuant to the laws of any applicable
    jurisdiction.

            


    

     

    
      	
               
      

            	
              11.

            	
              Subscriber
      has substantial investment experience and is familiar with investments of
      the type contemplated by this Subscription Agreement. Subscriber confirms
      that although one of Subscriber’s motivations for investing in the Company
      is to derive economic benefits therefrom, Subscriber is aware that
      purchase of the Units is a speculative investment involving a high degree
      of risk and there is no guarantee that Subscriber will realize any gain
      from Subscriber’s investment or realize any tax benefits therefrom and
      Subscriber is further aware that Subscriber may lose all or a substantial
      part of Subscriber’s investment. Subscriber understands that there are
      substantial restrictions on the transferability of, and there is no
      existing public market for, the Units (including the Warrants that are
      included in the Units) and it may not be possible to liquidate an
      investment in the Units (including the shares of Common Stock and the
      Warrants that comprise the Units, and the shares of Common Stock issuable
      upon exercise of such Warrants). Subscriber affirms that Subscriber
      acknowledges that this investment is highly speculative, involves a high
      degree of risk and, accordingly, Subscriber can afford to lose the entire
      investment.

            


    

     

    
      	
               
      

            	
              12.

            	
              The
      address set forth herein is Subscriber’s true and correct address and
      Subscriber has no present intention of becoming a resident of any other
      country, state, or jurisdiction prior to, or after, Subscriber’s purchase
      of the Units.

            


    

     

    
      	
               
      

            	
              13.

            	
              Subscriber
      understands the meaning and legal consequences of the foregoing
      representations and warranties, which are true and correct as of the date
      hereof and will be true and correct as of the date of Subscriber’s
      purchase of the Units subscribed for herein. Each such representation and
      warranty shall survive such
purchase.

            


    


    
      
         


      

      
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              14.

            	
              Subscriber
      acknowledges and agrees that it shall not be a defense to a suit for
      damages for any misrepresentation or breach of covenant or warranty made
      by Subscriber that the Company, its Affiliates, the Company’s Counsel and
      their respective agents or representatives knew or had reason to know that
      any such covenant, representation or warranty in this Subscription
      Agreement or furnished or to be furnished to the Company by Subscriber
      contained untrue statements. The foregoing shall survive any investigation
      of Subscriber’s representations and warranties in this Subscription
      Agreement made by the Company, its Affiliates, the Company’s Counsel and
      their respective agents or
representatives.

            


    

     

    
      	
               
      

            	
              15.

            	
              No
      representation or warranty that Subscriber has made in this Subscription
      Agreement, or in a writing furnished or to be furnished pursuant to this
      Subscription Agreement, contains or shall contain any untrue statement of
      fact, or omits or shall omit to state any fact which is required to make
      the statements contained herein or therein, in light of the circumstances
      under which they were made, not
misleading.

            


    

     

    
      	
               
      

            	
              16.

            	
              Subscriber
      has full right, power, and authority to execute and deliver this
      Subscription Agreement and to perform Subscriber’s obligations hereunder.
      This Subscription Agreement has been duly authorized, executed and
      delivered by or on behalf of Subscriber and is a valid, binding and
      enforceable obligation of Subscriber, enforceable against Subscriber in
      accordance with its terms subject to bankruptcy, insolvency,
      reorganization, moratorium or similar laws from time to time in effect and
      affecting creditors’ rights generally and to general equity
      principles.

            


    

     

    
      	
               
      

            	
              17.

            	
              The
      execution and delivery of this Subscription Agreement by Subscriber will
      not result in any violation of, or be in conflict with, or result in the
      default of, any term of any material agreement or instrument to which
      Subscriber is a party or by which Subscriber is bound, or of any law or
      governmental order, rule or regulation which is applicable to
      Subscriber.

            


    

     

    
      	
               
      

            	
              18.

            	
              Subscriber
      is duly and validly organized, validly existing and in good tax and
      corporate standing as a corporation under the laws of the jurisdiction of
      its incorporation with full power and authority to purchase the Units to
      be purchased by it and to execute and deliver this Subscription
      Agreement.

            


    

     

    
      	
               
      

            	
              19.

            	
              To
      Subscriber’s knowledge, all negotiations relative to this Agreement and
      the transactions contemplated hereby have been carried out by Subscriber
      directly with the Company without the intervention of any person or entity
      in such manner as to give rise to any valid claim by any person or entity
      against Subscriber or the Company for a finder’s fee, brokerage commission
      or similar payment. To the extent Subscriber becomes aware of an
      additional claim to such fees, commission or payments, other than to a
      placement agent retained by the Company, Subscriber shall promptly provide
      the Company with notice of such claim. To the extent any person or entity
      claims to be entitled to a finder’s fee, brokerage commission, or similar
      payment in connection with the transactions contemplated hereby,
      Subscriber shall be liable for all such fees and expenses related thereto
      to the extent any such claims relate to acts or omissions of Subscriber or
      to this transaction.  In the event a payment is payable by the
      Company to any broker, finder, agent or other person, other than to a
      placement agent, in connection with Subscriber’s investment in the
      Company, such payment shall be deducted from the amount paid by Subscriber
      in connection with this
Agreement.

            


    


    
      
         


      

      
        5

        
          

        

      

      
         


      

    

     

    5.  Legend.

     

    Any
certificate representing Subscriber’s interest in the Company shall bear the
following legend:

     

    THESE
SECURITIES HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION
OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED, SOLD, PLEDGED, HYPOTHECATED OR
OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A
TRANSACTION NOT SUBJECT TO THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT
AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS OR BLUE SKY
LAWS  IN WHICH THE TRANSFEROR PROVIDES THE COMPANY WITH AN OPINION OF
COUNSEL SATISFACTORY TO THE COMPANY TO THE EFFECT THAT REGISTRATION IS NOT
NECESSSARY.

     

    6.  Indemnification by
Subscriber.

     

    Subscriber
hereby agrees to indemnify and hold harmless the Company, its Affiliates, the
Company’s Counsel, and their respective officers, directors, employees, agents
and representatives, from any and all damages, losses, costs, and expenses
(including reasonable attorneys’ fees to collect such amount of damages, losses,
costs, expenses) which they, or any of them, may incur by reason of Subscriber’s
failure to fulfill any of the terms and conditions of this Subscription
Agreement or by reason of Subscriber’s breach of any of Subscriber’s
representations and warranties contained in this Subscription
Agreement.


    
      
         


      

      
        6

        
          

        

      

      
         


      

    

     

    7.  Confidential
Information.

    


    For purposes of this Agreement, the
term “Confidential Information” will mean and refer to any information,
technical data or know-how, patentable and un-patentable, including, but not
limited to, software, machinery, research, product plans, product services,
customer lists, marketing materials, developments, inventions, process designs,
finances, or other trade secrets of the Company or similar items relating to the
Company’s business and litigation activities, or that of any supplier, customer
or prospective customer, which Confidential Information is designated in writing
to be confidential or proprietary, or if given orally, to Subscriber under
circumstances reasonably demonstrating or suggesting the confidential or
proprietary nature of such information. The restrictions in this Section shall
not apply to information, which (i) prior to or after the time of disclosure
becomes part of the public knowledge or literature, not as a result of any
inaction or action of Subscriber; (ii) must be delivered in response to a valid
order by a court or governmental body, (iii) became or becomes generally
available to the recipient on a non-confidential basis from a source other than
the Company; or (iv) is approved by the Company, in writing, for release.
Subscriber covenants and agrees not to use any Confidential Information for
Subscriber’s own use or benefit (directly or indirectly), or for the benefit of
any party other than Company. Subscriber may not disclose Confidential
Information to third parties except employees, consultants, or professional
advisers of the Company in connection with Company business who are required to
have the information in order to carry out their duties for the Company.
Subscriber agrees that it will take all reasonable measures to protect the
secrecy of and avoid disclosure or use of Confidential Information of the
Company in order to prevent the Confidential Information from falling into the
public domain or the possession of persons other than those persons authorized
hereunder to have such information, which measures shall include the highest
degree of care that Subscriber uses to protect Subscriber’s own Confidential
Information of a similar nature. Subscriber agrees to immediately notify the
Company in writing of any misuse or misappropriation of the Confidential
Information, which may come to Subscriber’s attention. All proceeds from a
misuse or disclosure of the Company’s Confidential Information will be
recoverable from Subscriber responsible for such misuse or disclosure, which
Subscriber shall be liable to the Company to the fullest extent of the
law.

     

    8.  General
Provisions.

     

    (a) Headings. The
headings contained in this Subscription Agreement are for reference purposes
only and shall not affect in any way the meaning or interpretation of this
Subscription Agreement.

     

    (b) Enforceability. If
any provision, which is contained in this Subscription Agreement, for any
reason, should be held to be invalid or unenforceable in any respect under the
laws of any State of the United States or any other jurisdiction, such
invalidity or unenforceability shall not affect any other provision of this
Subscription Agreement. Instead, this Subscription Agreement shall be construed
as if such invalid or unenforceable provisions had not been contained
herein.

     

    (c) Notices. Any notice
or other communication required or permitted hereunder (“Notice”) must be in writing
and sent by either (i) registered or certified mail, postage prepaid, return
receipt requested, (ii) overnight delivery with confirmation of delivery, or
(iii) confirmed facsimile transmission, in each case addressed as
follows:


    
      
         


      

      
        7

        
          

        

      

      
         


      

    

    


    
      
        	
                To
      the Company:

              	
                Document
      Security Systems, Inc.

              
	 
      	
                Attn:  Chief
      Executive Officer

              
	 
      	
                28
      East Main Street

              
	 
      	
                Suite
      1525

              
	 
      	
                Rochester,
      NY  14614

              
	 
      	
                Facsimile
      No:  (585) 325-2977

              
	 
      	 
      
	
                To
      Subscriber:

              	
                at
      the address set forth on the signature
page

              


      

    

     

    or in
each case to such other address and facsimile number as shall have last been
furnished by like Notice.  If mailing by registered or certified mail
is impossible due to an absence of postal service, and if the other methods of
sending Notice set forth in this Section 8 are not otherwise available, Notice
shall be in writing and personally delivered to the aforesaid addresses. Each
Notice or communication shall be deemed to have been given as of the date so
mailed or delivered, as the case may be; provided, however, that any Notice
sent by facsimile shall be deemed to have been given as of the date sent by
facsimile.

     

    (d) Governing Law;
Disputes. This Subscription Agreement shall in all respects be construed,
governed, applied and enforced with the laws of the State of New York without
giving effect to the principles of conflicts of laws. The Parties hereby consent
to and irrevocably submit to personal jurisdiction over each of them by the
applicable State or Federal Courts of the State of New York, County of Monroe,
in any action or proceeding, irrevocably waive trial by jury and personal
service of any and all process and other documents and specifically consent that
in any such action or proceeding, any service of process may be effectuated upon
any of them by certified mail, return receipt requested, in accordance with this
Section 8.

     

    (e) Further Assurances.
The Parties agree to execute any and all such other and further instruments and
documents, and to take any and all such further actions, which are reasonably
required to effectuate this Subscription Agreement and the intents and purposes
hereof.

     

    (f) Binding Agreement.
This Subscription Agreement shall be binding upon and inure to the benefit of
the Parties hereto and their heirs, executors, administrators, personal
representatives, successors and assigns.

     

    (g) Waiver. Except as
otherwise expressly provided herein, no waiver of any covenant, condition, or
provision of this Subscription Agreement shall be deemed to have been made
unless expressly set forth in writing and signed by the Party against whom such
waiver is charged; and, (i) the failure of any Party to insist in any one or
more cases upon the performance of any of the provisions, covenants, or
conditions of this Subscription Agreement or to exercise any option herein
contained, shall not be construed as a waiver or relinquishment for the future
of any such provisions, covenants, or conditions; (ii) the acceptance of
performance of anything required by this Subscription Agreement to be performed
with knowledge of the breach or failure of a covenant, condition, or provision
hereof shall not be deemed a waiver of such breach or failure; and, (iii) no
waiver by any Party of one breach by another Party shall be construed as a
waiver with respect to any other or subsequent breach.

     

    (h) Counterparts. This
Subscription Agreement may be executed in one or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.


    
      
         


      

      
        8

        
          

        

      

      
         


      

    

     

    (i) Entire Agreement. The
Parties have not made any representations, warranties, or covenants with respect
to the subject matter hereof, orally or in writing, which are not expressly set
forth herein, and this Subscription Agreement, together with any instruments or
other agreements executed simultaneously herewith, constitutes the entire
agreement between them with respect to the subject matter hereof. All
understandings and agreements heretofore had between the Parties with respect to
the subject matter hereof are merged in this Subscription Agreement, which alone
fully and completely expresses their agreement. This Subscription Agreement may
not be changed, modified, extended, terminated, or discharged orally, but only
by an agreement in writing, which is signed by all of the Parties to this
Subscription Agreement.

     

    (j) Subscription
Irrevocable. Except as set forth herein, this Subscription is
irrevocable, is subject to all of the terms and provisions contained in the
Subscription Agreement, and will survive the death, dissolution, or disability
of the Subscriber.

     

    (k) Limited Liability.
The Company, its Affiliates, the Company’s Counsel and the Company’s applicable
agents and representatives shall not be liable for taking any action pursuant to
this Subscription Agreement in the absence of their respective willful
misconduct or fraud.

     

    (l) Assignability. This
Agreement is not transferable or assignable by the Subscriber.

     

    9.  Certification.

     

    Under
penalties of perjury Subscriber certifies as follows:

     

    If it has
been provided, the number shown below, as Subscriber’s taxpayer’s identification
number is Subscriber’s correct taxpayer identification number. Subscriber is not
subject to backup withholding either because Subscriber has not been notified by
the Internal Revenue Service that Subscriber is subject to backup withholding as
a result of a failure to report all interest or dividends, or the Internal
Revenue Service has notified Subscriber that it is no longer subject to backup
withholding.

     

    [REMAINDER
OF PAGE INTENTIONALLY BLANK]


    
      
         


      

      
        9

        
          

        

      

      
         


      

    

     

    IN
WITNESS WHEREOF, the Subscriber has executed this Subscription Agreement as of
the date first written above.

     

    Investment
Amount: $_________

    


    Print Name of
Subscriber:    ________________________

    


    Signature
of Subscriber:

    


    Individual:

    


    ____________________________

    


    Business
Entity:

    


    
      
        
          
            
              
                	
                        By:

                      	
                         
      

                      
	
                        Name:

                      	 
        
	
                        Title:

                      	
                           
      

                      


              

            

          

        

      

    

    


    
      
        
          
            
              
                
                  
                    
                      
                        
                          	
                                  Taxpayer
      ID Number:

                                	
                                   
    

                                
	
                                  Date:

                                	
                                   
    

                                
	 
      	  
      
	
                                  Address:

                                	
                                    
      

                                
	 
      	
                                    
      

                                
	 
      	
                                    
      

                                
	
                                  Facsimile
      No:

                                	
                                    
      

                                


                        

                      

                    

                  

                

              

            

          

        

      

    

     

    Accepted and Agreed
to:

     

    DOCUMENT
SECURITY SYSTEMS, INC.

    


    
      
        
          
            
              	
                      By:

                    	 
        
	 
      	
                      Name:
      Patrick White

                    
	 
      	
                      Title:   Chief
      Executive
Officer

                    


            

          

        

      

    

    


    Date:
_______________________