PROMISSORY
NOTE AMENDMENT No. 3


 


This
PROMISSORY NOTE AMENDMENT NO. 3 (the “Amendment”) is made as of April 12, 2016 (the “Amendment Date”)
by and between DOCUMENT SECURITY SYSTEMS, INC. (the “Borrower”), a corporation formed under the laws of the
State of New York, with offices at 200 Canal View Boulevard, Suite 300, Rochester, New York 14623 and CONGREGATION NOAM ELIMELECH
(the “Lender”).


 


This
Amendment amends the Promissory Note (“Note”), dated May 24, 2013, made among Borrower and Lender, as follows.
All capitalized terms used herein without definition shall have the meanings ascribed to them in the Note.


 


The
parties agree as follows:


 


1.
Section 1 of the Note shall be, and hereby is, amended to read in its entirety as follows:


 


	 	“1.	Maturity.
    The aggregate outstanding Principal Amount, together with all accrued interest thereon and expenses incurred by the Lender
    in connection herewith (cumulatively, the “Outstanding Amount”), shall be due and payable in full on the earliest
    to occur of (the earliest of such events being the “Maturity Date”): (i) May 31, 2017 (the “Scheduled Maturity
    Date”) and (ii) the acceleration of this Note upon the occurrence of an Event of Default.”


 


2.
Section 2 of the Note shall be, and hereby is, amended to read in its entirety as follows:


 


	 	“2.	Principal
    and Interest. Borrower shall continue to make principal payments in the amount of $15,000 per month until the Maturity
    Date, at which time a balloon payment of $430,000 of principal will become due and payable. In addition to the monthly principal
    payments, Borrower shall make monthly interest payments which shall accrue on the then outstanding balance of the Principal
    Amount at a fixed interest rate equal to 9% per annum. Accrued interest shall be payable in cash in arrears on the last day
    of each calendar month until the Principal Amount is paid in full. If at any time the outstanding Principal Amount shall be
    paid in full, then all accrued interest shall be payable at the time of such principal payment.”


 


3.
Note Ratified. Except as expressly amended hereby, the Note and previously executed amendments thereto are in all respects
ratified and confirmed, and all of the terms, provisions and conditions thereof shall be and remain in full force and effect,
and this Amendment and all of its terms, provisions and conditions shall be deemed to be a part of the Note.


 




    	 	 	 



    	 	 	 



    


 


4.
No Events of Default. The Borrower confirms that, as of the date hereof, there exists no condition or event that constitutes
(or that would after expiration of applicable grace or cure periods constitute) an Event of Default.


 


5.
Costs and Expenses. Borrower agrees to pay any and all reasonable costs incurred in connection with preparation for closing,
the closing, and post-closing items relating to this Amendment.


 


6.
Governing Law. This Amendment, together with all of the rights and obligations of the parties hereto, shall be construed
and interpreted in accordance with the laws of the State of New York, excluding the laws applicable to conflicts or choice of
law.


 


IN
WITNESS WHEREOF, the parties have caused this Amendment to be executed by their duly authorized representatives by their signatures
below.


 


	 	
	 	CONGREGATION
    NOAM ELIMELECH (Lender)	 
	 	 	 
	 	/s/
    Mayer Laufer	 
	 	By:
    Mayer Laufer	 
	 	Title:
    President	 
	 	 	 
	 	DOCUMENT
    SECURITY SYSTEMS, INC. (Borrower)	 
	 	 	 
	 	/s/
    Philip Jones	 
	 	By:
    Philip Jones	 
	 	Title:
    Chief Financial Officer	 


 






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