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. 

     

    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.

     

    
      
         

      

      
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    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:

     

    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. 

     

    
      
         

      

      
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    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. 

     

    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. 

     

    
      
         

      

      
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    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.
      

    


    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.

     

    
      
         

      

      
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    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):

     

    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.

     

    
      
         

      

      
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          11 -

        
          

        

      

      
         

      

    

     

    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.

     

    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.

     

    
      
         

      

      
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          12 -

        
          

        

      

      
         

      

    

     

    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.

    


    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. 

     

    
      
         

      

      
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    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.

     

    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.

     

    
      
         

      

      
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          14 -

        
          

        

      

      
         

      

    

     

    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. 

     

    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.

     

    
      
         

      

      
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          15 -

        
          

        

      

      
         

      

    

     

    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.

     

    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. 

     

    
      
         

      

      
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          16 -

        
          

        

      

      
         

      

    

     

    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. 

    


    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;

     

    
      
         

      

      
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          17 -

        
          

        

      

      
         

      

    

     

    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.

    


    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.

     

    
      
         

      

      
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          18 -

        
          

        

      

      
         

      

    

     

    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.

     

    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

            


    

     

    
      
         

      

      
        -
          19 -

        
          

        

      

      
         

      

    

    
 

    
      	
              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

            
	 	 
	
              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.

     

    
      
         

      

      
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          20 -

        
          

        

      

      
         

      

    

     

    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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          21 -

        
          

        

      

      
         

      

    


    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 Stanley	 
	 	(a
              Member, per Recital V)	 
	 	 	 	 
	 	
              MATTHEW
                KELLMAN:

            	 
	 	 	 	 
	 	/s/
              Matthew Kellman	 
	 	(a
              Member, per Recital V)	 


    

    


    
      
         

      

      
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