Document:

CREDIT
      AGREEMENT

    

    Dated
      as
      of January 4, 2008

    

    between

     

    DOCUMENT
      SECURITY SYSTEMS, INC.

    as
      Borrower,

    

    and

    

    PATRICK
      WHITE

    as
      Lender.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    CREDIT
      AGREEMENT

    

    Credit
      Agreement (“Agreement”), made January 4, 2008 by and between DOCUMENT SECURITY
      SYSTEMS, INC. (the “Company”) and PATRICK WHITE (“Lender”).

    

    WITNESSETH:

    

    WHEREAS,
      the Lender has agreed to to loan certain funds to the Company, and the Company
      has agreed to borrow certain funds from Lender, subject to the terms and
      conditions set forth therein;  

    

    NOW
      THEREFORE, in consideration of the terms and conditions contained herein, and
      of
      any loans or extensions of credit heretofore, now or hereafter made to or for
      the benefit of the Company by the Lender (all of said loans hereafter referred
      to as the “Loans”), the parties hereto hereby agree as follows:

    

    
      	
              1.

            	
              DEFINITIONS.

            

    

     

    1.1. General
      Terms.
      When
      used herein, the following terms shall have the following meanings:

     

    (i) “Acquisition”
means
      any transaction, or any series of related transactions, consummated on or after
      the date of this Agreement, by which Company (i) acquires any going business
      or
      all or substantially all of the assets of any firm, corporation or division
      thereof, whether through purchase of assets, merger or otherwise or (ii)
      directly or indirectly acquires (in one transaction or as the most recent
      transaction in a series of transactions) at least a majority (in number of
      votes) of the securities of a corporation which have ordinary voting power
      for
      the election of directors (other than securities having such power only by
      reason of the happening of a contingency) or a majority (by percentage or voting
      power) of the outstanding partnership interests of a partnership.

     

    (ii) “Affiliate”
shall
      mean any Person (1) which directly or indirectly controls, or is controlled
      by, or is under common control with the Company or a Subsidiary; (2) which
      directly or indirectly beneficially owns or holds five percent (5%) or more
      of
      any class of voting stock of the Company or any Subsidiary; or (3) five
      percent (5%) or more of the voting stock of which is directly or indirectly
      beneficially owned or held by the Company or a Subsidiary. The term “control”
means the possession, directly or indirectly, of the power to direct or cause
      the direction of the management and policies of a Person, whether through the
      ownership of voting securities, by contract, or otherwise.

     

    (iii) “Available
      Principal Balance”
shall
      mean an amount equal to the Maximum Revolving Facility the outstanding principal
      balance of Revolving Credit Loans.

     

    
      
        
        

      

      
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    (iv) “Business
      Day”
means
      any day other than a Saturday, Sunday, or other day on which commercial lenders
      in New York, New York are authorized or required to close under the laws of
      the
      State of New York. 

     

    (v) “Capital
      Lease”
means
      all leases which have been or should be capitalized on the books of the lessee
      in accordance with GAAP.

     

    (vi) “Code”
means
      the Internal Revenue Code of 1986, as amended from time to time, and the
      regulations and published interpretations thereof.

     

    (vii) “Debt”
means
      (1) indebtedness or liability for borrowed money; (2) obligations evidenced
      by
      bonds, debentures, notes, or other similar instruments; (3) obligations for
      the
      deferred purchase price of property or services (including trade obligations);
      (4) obligations as lessee under Capital Leases; (5) current liabilities in
      respect of unfunded vested benefits under Plans covered by ERISA; (6)
      obligations under letters of credit; (7) obligations under acceptance
      facilities; (8) all guaranties, endorsements (other than for collection of
      deposit in the ordinary course of business), and other contingent obligations
      to
      purchase, to provide funds for payment, to supply funds to invest in any Person
      or entity, or otherwise to assure a creditor against loss; and (9) obligations
      secured by any Liens, whether or not the obligations have been
      assumed.

     

    (viii) “Default”
shall
      mean the occurrence or existence of any one or more of the following
      events.

     

    (a) The
      Company fails to pay any of its material “Liabilities” (as hereinafter
      defined) when due and said failure continues for a period of thirty (30) days
      after written notice of same from the Lender to the Company;

     

    (b) Company
      fails or neglects to perform, keep or observe any of the covenants, conditions
      or agreements contained in this Agreement (other than those as stated in
      Sections 5.1, 5.2, 5.3 and 5.8, and all negative covenants contained in Section
      6 hereof with respect to all of which no notice and cure period shall be
      applicable; and those stated in Section 5.9 which shall not be considered a
      ground of Default unless the failure to comply with same continues for a period
      of fifteen (15) days after written notice of same from the Lender to the
      Company) or in any of the other Loan Documents executed by Company and said
      failure continues for a period of thirty (30) days after written notice of
      same
      from the Lender to the Company;

     

    (c) Any
      warranty or representation now or hereafter made by the Company in connection
      with this Agreement or any of the other Loan Documents is untrue or incorrect
      in
      any material respect, or any schedule, certificate, statement, report, financial
      data, notice, or writing furnished at any time by the Company to the Lender
      is
      untrue or incorrect in any material respect, on the date as of which the facts
      set forth therein are stated or certified;

     

    (d) A
      proceeding under any Bankruptcy, reorganization, arrangement of debt,
      insolvency, readjustment of debt or receivership law or statute is filed against
      Company which is not dismissed within sixty (60) days of its filing, or a
      proceeding under any Bankruptcy, reorganization, arrangement of debt,
      insolvency, readjustment of debt or receivership law or statute is filed by
      Company or the Company makes an assignment for the benefit of creditors or
      Company takes any corporate action to authorize any of the
      foregoing;

     

    
      
        
        

      

      
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    (e) Company
      voluntarily or involuntarily dissolves or is dissolved, terminates or is
      terminated;

     

    (f) Company
      becomes insolvent or fails generally to pay its debts as they become due,
      including with access to the Available Principal Balance, and said failure
      continues for a period of thirty (30) days after written notice of same from
      the
      Lender to the Company;

     

    (g) A
      default
      under any of the other Transaction Documents;

     

    (h) One
      or
      more judgments, decrees, or judicial orders for the payment of money which
      in
      the aggregate, in any fiscal year of Company, exceeds $250,000.00 shall be
      rendered against the Company or any of its Subsidiaries, and such judgments,
      decrees, or judicial orders shall continue unsatisfied and in effect for a
      period of thirty (30) consecutive days without being vacated, discharged,
      satisfied, or stayed or appealed;

     

    (ix) “GAAP”
means
      generally accepted accounting principles in the United States. 

     

    (x) “Liabilities”
shall
      mean all of Company’s liabilities, obligations, and indebtedness to Lender of
      any and every kind and nature, whether heretofore, now or hereafter owing,
      arising, due or payable and howsoever evidenced, created, incurred, acquired,
      or
      owing, whether primary, secondary, direct, contingent, fixed or otherwise
      (including obligations of performance and all Rate Hedging Obligations) whether
      arising under or in accordance with the Transaction Documents or
      otherwise.

     

    (xi) “LIBOR
      Loan”
means
      any Loan when and to the extent that the interest rate therefor is determined
      by
      reference to the one-year LIBOR Interest Rate.

     

    (xii) “Lien”
means
      any mortgage, deed of trust, pledge, security interest, hypothecation,
      assignment, deposit arrangement, encumbrance, lien (statutory or other), or
      preference, priority, or other security agreement or preferential arrangement,
      charge, or encumbrance of any kind or nature whatsoever (including, without
      limitation, any conditional sale or other title retention agreement, any
      financing lease having substantially the same economic effect as any of the
      foregoing, and the filing of any financing statement under the New York Uniform
      Commercial Code or comparable law of any jurisdiction to evidence any of the
      foregoing).

     

    (xiii) “Maximum
      Revolving Commitment”
shall
      mean $600,000.00.

     

    
      
        
        

      

      
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    (xiv) “Permitted
      Liens”
shall
      mean (i) Liens securing the payment of taxes, either not yet due or the
      validity amount or imposition of which is being contested in good faith by
      appropriate proceedings, (ii) the Liens and security interests in favor of
      the Lender, (iii) currently existing Liens as of the date of the Agreement,
      (iv)
      Liens securing the repayment of indebtedness of the Company to Fagenson &
Co., as agent for certain lenders, (v) purchase money liens to third parties
      in
      connection with new equipment purchases or Capital Leases provided the aggregate
      purchase price for said equipment and total lease payments under any Capital
      Leases does not exceed $150,000 in any fiscal year of Company.

     

    (xv) “Person”
shall
      mean any individual, sole proprietorship, partnership, joint venture, trust,
      unincorporated organization, association, corporation, institution, entity,
      party, or government (whether national, federal, state, provincial, county,
      city, municipal or otherwise, including, without limitation, any
      instrumentality, division, agency, body or department thereof).

     

    (xvi) “Principal
      Office”
means
      the Lender’s office at 28 East Main Street, Suite 1525, Rochester, NY 14614.

     

    (xvii) “Rate
      Hedging Obligations”
shall
      mean any and all obligations of the Company or any Subsidiary, whether absolute
      or contingent and howsoever and whensoever created, arising, evidenced or
      acquired (including all renewals, extensions and modifications thereof and
      substitutions therefor), under (i) any and all agreements designed to protect
      the Company or any Subsidiary from the fluctuations of interest rates, exchange
      rates or forward rates applicable to such party’s assets, liabilities or
      exchange transactions, including, but not limited to: interest rate swap
      agreements, dollar-denominated or cross-currency interest rate exchange
      agreements, forward currency exchange agreements, interest rate cap, floor
      or
      collar agreements, forward rate currency agreements or agreements relating
      to
      interest rate options, puts and warrants, and (ii) any and all agreements
      relating to cancellations, buy backs, reversals, terminations or assignments
      of
      any of the foregoing.

     

    (xviii) “Regulation
      D”
means
      Regulation D of the Board of Governors of the Federal Reserve System as amended
      or supplemented from time to time.

     

    (xix) “Revolving
      Credit Loans”
shall
      have the meaning assigned to such term in Section 2.1.

     

    (xx) “Revolving
      Note”
shall
      mean that certain Six Hundred Thousand and No/100 Dollar ($600,000.00) note
      dated of even date herewith substantially in the form of Exhibit B
      hereto
      executed by Company and made payable to the order of Lender.

     

    (xxi) “Security
      Agreement”
shall
      mean a security agreement encumbering all of the Company’s accounts receivable
      to secure the Company’s obligations hereunder, substantially in the form of
Exhibit
      A
      hereto.

     

    (xxii) “Subsidiary”
shall
      mean, as to the Company, a corporation of which shares of stock having ordinary
      voting power (other than stock having such power only by reason of the happening
      of a contingency) to elect a majority of the board of directors or other
      managers of such corporation are at the time owned, or the management of which
      is otherwise controlled, directly, or indirectly through one or more
      intermediaries, or both, by the Company.

     

    
      
        
        

      

      
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    (xxiii) “Termination
      Date”
shall
      mean January 4, 2010.

     

    (xxiv) “Transaction
      Document(s)”
means
      this Agreement, the Revolving Note, and the Pledge and Security
      Agreement.

     

    1.2. Accounting
      Terms.
      Any
      accounting terms used in this Agreement which are not specifically defined
      herein shall have the meanings customarily given them in accordance with
      GAAP.

     

    1.3. Others
      Defined in New York Uniform Commercial Code.
      All
      other terms contained in this Agreement (and which are not otherwise
      specifically defined herein) shall have the meanings provided by the Uniform
      Commercial Code of the State of New York (the “Commercial Code”) to the extent
      the same are used or defined therein.

     

    
      	
              2.

            	
              CREDIT.

            

    

     

    2.1. Revolving
      Loan.
      If a
      Default does not exist, and subject to the provisions of Article 3 below,
      the Lender shall, until but not after the Termination Date, advance to the
      Company, on a revolving credit basis loans (the “Revolving Credit Loans”), in an
      amount not to exceed at any time the Available Principal Balance. Subject to
      Section 2.2, each Revolving Credit Loan to the Company shall, on the day of
      such advance be deposited, in immediately available funds, in such account
      as
      the Company may, from time to time, designate. The indebtedness of Company
      under
      all Revolving Credit Loans shall be evidenced by the Revolving Note. Each
      Revolving Credit Loan shall be in an amount not less than Ten Thousand and
      No/100 ($10,000.00) Dollars. Within the terms of this Agreement, the Company
      may
      borrow, repay pursuant to Section 2.6, and reborrow under this Section 2.1.
      

     

    2.2. Maximum
      Principal Balance of Revolving Loan.
      The
      aggregate outstanding principal balance of all Revolving Credit Loans shall
      at
      no time exceed the Maximum Revolving Commitment. The aggregate outstanding
      principal balance of the Revolving Credit Loans at any time shall be the amounts
      advanced from time to time to Company and not repaid under Section 2.6. The
      Company agrees that if at any time any such excess shall arise, the Company
      shall upon written request of Lender immediately pay to the Lender such amount
      as may be necessary to eliminate such excess.

     

    2.3. Notice
      and Manner of Borrowing.
      The
      Company shall give the Lender written (including via e-mail) or telefax notice
      (effective upon receipt) of any Revolving Credit Loans under this Agreement,
      at
      least three (3) Business
      Days before any Revolving Credit Loan specifying: (1) the date of such Loan;
      and
      (2) the amount of such Loan. Not later than 1:00 P.M. New York City time on
      the
      date of such Revolving Credit Loan and upon fulfillment of the applicable
      conditions set forth herein, the Lender will make such Revolving Credit Loan
      available to the Company in immediately available funds by crediting the amount
      thereof to the applicable account of the Company.

     

    
      
        
        

      

      
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    2.4. Interest.
      The
      Company shall pay interest to the Lender on the outstanding and unpaid principal
      amount of the Revolving Credit Loans made under this Agreement at a rate of
      two
      percent (2%) in excess of the then in effect one-year LIBOR rate per annum.
      Interest shall be calculated on the basis of a year of 360 days for the actual
      number of days elapsed. The Company shall pay interest quarterly in arrears
      no
      later than the tenth day of each calendar quarter commencing with the first
      calendar quarter following the disbursement of any Revolving Credit Loan. Any
      principal amount not paid when due (at maturity, by acceleration or otherwise)
      shall bear interest thereafter until paid in full, payable on demand, at a
      rate
      per annum equal to four (4%) percent over the then applicable interest rate
      due
      under each Loan (the “Default Rate”). 

    

    2.5. Prepayments.
      The
      Company may prepay any Loan upon at least two (2) Business Days’ notice to the
      Lender in whole or in part with accrued interest to the date of such prepayment
      on the amount prepaid. 

     

    2.6. Method
      of Payment.
      The
      Company shall make each payment under this Agreement and under the Revolving
      Note not later than 2:00 P.M. New York time on the date when due in lawful
      money
      of the United States to the Lender at its Principal Office in immediately
      available funds. The Company hereby authorizes the Lender, if and to the extent
      payment is not made when due under this Agreement or under the Revolving Note,
      to offset from any funds of the Company in any capacity with the Lender any
      amount so due. Whenever any payment to be made under this Agreement or under
      the
      Revolving Note shall be stated to be due on a day other than a Business Day,
      such payment shall be made on the next succeeding Business Day, and such
      extension of time shall in such case be included in the computation of the
      payment of interest, as the case may be.

     

    2.7. 
      Use
      of Proceeds.
      The
      Company will use the proceeds of the Loans in accordance with a current
      operating budget as provided to Lender or as otherwise approved by Lender.
      The
      Company will not use any of the proceeds of the Loans to purchase or carry
      any
“margin stock” (as defied in Regulation U of the Board of Governors of the
      Federal Reserve System) or to make any Acquisition without the consent of the
      Lender. The Company’s use of the proceeds of any advances and readvances made by
      the Lender to the Company pursuant to this Agreement are, and will continue
      to
      be, legal and proper corporate uses (duly authorized by its Board of Directors,
      if necessary pursuant to applicable corporate law, rule or regulation) and
      such
      uses are and will be consistent with all applicable laws and statutes, as in
      effect as of the date hereof. 

     

    2.8. Illegality.
      Notwithstanding any other provision in this Agreement, if the Lender reasonably
      determines that any applicable law, rule, or regulation, or any change therein,
      or any change in the interpretation or administration thereof by any
      governmental authority, central bank, or comparable agency charged with the
      interpretation or administration thereof, or compliance by the Lender with
      any
      request or directive (whether or not having the force of law) of any such
      authority, central bank, or comparable agency shall make it unlawful or
      impossible for the Lender to maintain its commitment under this Agreement,
      then
      upon notice to the Company by the Lender the commitment of the Lender under
      this
      Agreement shall terminate; and the outstanding principal amount of the Loans,
      together with interest accrued thereon, and any other amounts payable to the
      Lender under this Agreement shall be repaid (a) immediately upon demand of
      the
      Lender if such change or compliance with such request, in the judgment of the
      Lender, requires immediate repayment; or (b) at the conclusion of the last
      calendar month before the effective date of any such change or
      request.

     

    
      
        
        

      

      
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    2.9. Increased
      Cost.
      The
      Company shall pay to the Lender from time to time such reasonable amounts as
      the
      Lender may determine to be necessary to compensate the Lender for any costs
      incurred by the Lender which Lender determines are attributable to its making
      or
      maintaining any Loans hereunder or its obligation to make any such Loans
      hereunder, or any reduction in any amount receivable by the Lender under this
      Agreement or the Revolving Note in respect of any such loans or such obligation
      (such increases in costs and reductions in amounts receivable being herein
      called “Additional Costs”), resulting from any change after the date of this
      Agreement in U.S. federal, state, municipal, or foreign laws or regulations
      (including Regulation D and any applicable currency reserve requirements),
      or
      the adoption or making after such date of any interpretations, directives,
      or
      requirements applying to a class of lenders including the Lender or under any
      U.S. federal, state, municipal, or any foreign laws or regulations (whether
      or
      not having the force of law) by any court or governmental or monetary authority
      charged with the interpretation or administration thereof (“Regulatory Change”),
      which: (1) changes the basis of taxation of any amounts payable to the Lender
      under this Agreement or the Revolving Note in respect of any of such Loans
      (other than taxes imposed on the overall net income of the Lender for any of
      such Loans by the jurisdiction where the Principal Office is located); or (2)
      imposes or modifies any reserve, special deposit, compulsory loan, or similar
      requirements relating to any extensions of credit or other assets of, or any
      deposits with or other liabilities of, the Lender; or (3) imposes any other
      conditions affecting this Agreement or the Revolving Note (or any of such
      extensions of credit or liabilities). The Lender will notify the Company in
      writing of any event occurring after the date of this Agreement which will
      entitle the Lender to compensation pursuant to this Section 2.9 as promptly
      as
      practicable after it obtains knowledge thereof and determines to request such
      compensation.

    

    Reasonable
      determinations by the Lender for purposes of this Section 2.9 of the effect
      of
      any Regulatory Change on its costs of making or maintaining Loans or on amounts
      receivable by it in respect of Loans, and of the additional amounts required
      to
      compensate the Lender in respect of any Additional Costs, shall be conclusive,
      provided that such determinations are made on a reasonable basis, are not
      subject to manifest error and the written basis for said determinations are
      given to Company.

    

    2.10. Risk-Based
      Capital.
      In the
      event the Lender determines that (1) compliance with any judicial,
      administrative, or other governmental interpretation of any law or regulation
      or
      (2) compliance by Lender or any corporation controlling the Lender with any
      guideline or request from any central lender or other governmental authority
      (whether or not having the force of law) has the effect of requiring an increase
      in the amount of capital required or expected to be maintained by the Lender
      or
      any corporation controlling the Lender, and the Lender determines that such
      increase is based upon its obligations hereunder, and other similar obligations,
      the Company shall pay to the Lender such additional amount as shall be certified
      by the Lender to be the amount allocable to the Lender’s obligations to the
      Company hereunder. The Lender will notify the Company in writing of any event
      occurring after the date of this Agreement that will entitle the Lender to
      compensation pursuant to this Section 2.10 as promptly as practicable after
      it
      obtains knowledge thereof and determines to request such
      compensation.

    

    
      
        
        

      

      
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    Determinations
      by the Lender for purposes of this Section 2.10 of the effect of any increase
      in
      the amount of capital required to be maintained by the Lender and of the amount
      allocable to the Lender’s obligations to the Company hereunder shall be
      conclusive, provided that such determinations are made on a reasonable basis,
      are not subject to manifest error and the written basis for said determinations
      are given to Company.

    

    
      	
              3.

            	
              CONDITIONS
                OF ADVANCES.

            

    

    

    Notwithstanding
      any other provisions contained in this Agreement, the making of any advance
      in
      connection with any Revolving Loan shall be conditioned upon the
      following:

    

    3.1. Representations
      and Warranties

     

    (i) The
      following statements shall be true on and as of the date of each advance as
      though made on and as of such date; and

     

    (ii) No
      Default has occurred and is continuing, or would result from such advance;
      and

     

    (iii) The
      Lender shall have received the executed Transaction Documents in a form and
      content reasonably acceptable to Lender; and

     

    (iv) The
      Lender shall have received such other approvals, opinions, or documents as
      the
      Lender may reasonably request including but not limited to an opinion of counsel
      to Company, in a form and content acceptable to Lender; and tax, judgment,
      pending litigation and Uniform Commercial Code searches showing no matters
      objectionable to Lender.

     

    3.2. Financial
      Condition.
      No
      material adverse change, as determined by Lender in its reasonable discretion,
      in the financial condition or operations of the Company, shall have occurred
      and
      be continuing at any time or times subsequent to, as applicable the most recent
      financial statement provided by the Company. In no event shall Lender’s
      agreement to continue to honor requests for advances be deemed to constitute
      a
      waiver by the Lender of its absolute right at any time in the future to notify
      the Company of a material adverse change in the financial condition or
      operations of the Company, based upon information in the possession of Lender
      prior to any advance of funds hereunder. 

     

    3.3. Security
      Agreement.
      The
      Security Agreement shall be duly executed and delivered by the Company, and
      shall be validly enforceable in accordance with its terms.

     

    3.4. No
      Default.
      No
      Default shall have occurred and be continuing under this Agreement or any of
      the
      Transaction Documents.

     

    
      
        
        

      

      
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    3.5. Completeness
      of Representations.
      The
      representations and warranties set forth in the Transaction Documents shall,
      as
      of the date hereof, be true, correct and complete in all respects.

     

    3.6. Other
      Requirements.
      Lender
      shall have received, in form and substance reasonably satisfactory to Lender,
      all certificates, orders, authorities, consents, affidavits, schedules,
      instruments, security agreements, financing statements, mortgages, financial
      statements including any other documents which carry out the purposes of this
      Agreement and which are provided for hereunder, or which Lender may at any
      time
      reasonably request.

     

    
      	
              4.

            	
              REPRESENTATIONS
                AND WARRANTIES.

            

    

    

    The
      Company represents and warrants that as of the date of the execution of this
      Agreement, and continuing so long as any Liabilities remain outstanding, and
      (even if there shall be no Liabilities outstanding) so long as this Agreement
      remains in effect:

    

    4.1. Corporate
      Existence.
      The
      Company is a corporation duly organized and in good standing under the laws
      of
      the state of its incorporation or such other state as may be permitted under
      this Agreement. The Company is duly qualified as a foreign corporation and
      in
      good standing in all other states or jurisdictions, whether foreign or domestic,
      where the nature and extent of the business transacted by it or the ownership
      of
      its assets makes such qualification necessary.

     

    4.2. Corporate
      Authority.
      The
      execution and delivery by the Company of this Agreement and of all of the other
      Transaction Documents by Company to which it is a party and the performance
      of
      the Company’s obligations hereunder and of Company’s obligations thereunder:
      (i) are within the Company’s corporate powers; (ii) are duly
      authorized by the Company’s Board of Directors and, if necessary, the Company’s
      stockholders; (iii) are not in contravention of the terms of the Company’s
      Articles of Incorporation, Charter, or By-Laws, or any other organizational
      documents or of any indenture, agreement or undertaking to which the Company
      is
      a party or by which the Company or any of its property is bound; (iv) do
      not, as of the execution hereof, require any governmental consent, registration
      or approval; (v) to the best of the Company’s knowledge, do not contravene
      any contractual or governmental restriction binding upon the
      Company.

     

    4.3. Financial
      Data.
      The
      financial statements to be furnished to the Lender will be in accordance with
      the books and records of the Company and will fairly present the financial
      condition of the Company at the dates thereof and the results of operations
      for
      the periods indicated (subject, in the case of unaudited financial statements,
      to normal year-end adjustments), and such financial statements will be prepared
      in conformity with generally accepted accounting principles consistently applied
      throughout the periods involved. All information, reports and other papers
      and
      data furnished to the Lender are or will be, at the time the same are so
      furnished to the Lender, accurate, correct and complete in all material
      respects.

     

    4.4. Collateral.
      Except
      for Permitted Liens, all of the property of Company is and will continue to
      be
      owned by the Company, has been fully paid for (except for Debt relating to
      Permitted Liens) and is free and clear of all security interests, liens, claims,
      and encumbrances.

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

       

    

    4.5. Solvency.
      After
      taking into account the funds available under this Agreement, the Company is
      solvent, is able to pay its debts as they become due and has capital sufficient
      to carry on its businesses and all business in which it is about to engage.
      The
      Company will not be rendered insolvent by the execution and delivery of this
      Agreement or any of the Loan Documents to which it is a signatory or by the
      transactions contemplated hereunder or thereunder.

     

    4.6. Chief
      Place of Business.
      As of
      the execution hereof, the principal place of business of the Company is located
      at 28 East Main Street, Suite 1525, Rochester, NY 14614. If any change in such
      location occurs, the Company shall promptly notify the Lender thereof. As of
      the
      execution hereof, the books and records of the Company and all chattel paper
      and
      all records of account are located at the aforesaid office of the Company and
      if
      any change in such location occurs, the Company shall promptly notify the Lender
      thereof.

     

    4.7. Other
      Corporate Names.
      As of
      the date hereof, the Company is not using any corporate or fictitious names
      other than the corporate name shown on the Company’s Articles of Incorporation
      or other applicable charter or organizational documents.

     

    4.8. Tax
      Liabilities.
      The
      Company will file and will cause any Subsidiary to file all federal, state
      and
      local tax reports and returns required by any US or other applicable law or
      regulation to be filed by it or said Subsidiary, except for extensions duly
      obtained, and has either duly paid all taxes, duties and charges indicated
      due
      on the basis of such returns and reports, or made adequate provision for the
      payment thereof, and the assessment of any material amount of additional taxes
      in excess of those paid and reported is not reasonably expected. The Company
      believes that the reserves for taxes reflected on the balance sheets of Company
      submitted to Lender in accordance with this Agreement will be adequate in amount
      for the payment of all liabilities for all taxes (whether or not disputed)
      of
      the Company accrued through the date of such balance sheet. There are no
      material unresolved questions or claims concerning any tax liability of the
      Company.

     

    4.9. Contingent
      Obligations.
      Except
      as specifically referenced in the financial statements described in this
      Agreement and delivered to Lender prior to the date hereof or other than as
      permitted by this Agreement, the Company has not guaranteed the obligation
      of
      any other Person.

     

    4.10. Margin
      Security.
      The
      Company’s execution and delivery of this Agreement and each of the Loan
      Documents to which it is a party does not directly or indirectly violate or
      result in a violation of Section 7 of the Securities Exchange Act of 1934,
      as
      amended, or any regulations issued pursuant thereto, including without
      limitation, Regulation U, G, T or X of the Board of Governors of the Federal
      Reserve System (12 CFR 221, 207, 220 and 224, respectively; “Regulation U”,
“Regulation G”, “Regulation T” and “Regulation X”, respectively) and Company
      does not own or intend to purchase or carry any “margin security,” as defined in
      Regulations U, G, T or X.

     

    4.11. Survival
      of Warranties.
      All
      representations and warranties contained in this Agreement or any of the other
      Loan Documents shall survive the execution and delivery of this
      Agreement.

     

    4.12. Litigation
      and Proceedings.
      Other
      than as disclosed in the Company’s filings with the Securities and Exchange
      Commission, there are no judgments outstanding against the Company or any
      Subsidiary and, there is no pending or, to the Company’s knowledge, threatened
      litigation, contested claim, or governmental proceeding by or against the
      Company which would have a materially adverse effect on the financial condition
      or operation of the Company.

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

       

    

    4.13. Other
      Agreements.
      The
      Company is not in default under any material contract, lease, loan, mortgage,
      or
      indenture to which it is a party or by which it or its property is bound which
      would have a materially adverse effect on the financial condition or operation
      of the Company.

     

    4.14. Compliance
      with Laws and Regulations.
      The
      execution and delivery by the Company of this Agreement and the execution and
      delivery by the Company of all of the other Loan Documents to which it is a
      signatory and the performance of the Company’s obligations hereunder and the
      Company’s obligations thereunder are not in contravention of any law or laws.
      The Company is in material compliance with all laws, orders, regulations and
      ordinances of all federal, foreign, state and local governmental authorities
      relating to the business operations and the assets of the Company.

     

    4.15. Patents,
      Trademarks and Licenses.
      The
      Company possesses adequate assets, licenses, patents, patent applications,
      copyrights, service marks, trademarks and trade names to continue to conduct
      its
      businesses as heretofore conducted by it.

     

    4.16. Enforceable
      Agreement.
      This
      Agreement is, and each of the other Loan Documents when delivered under this
      Agreement will be, legal, valid, and binding obligations of the Company,
      enforceable against the Company in accordance with their respective terms,
      except to the extent that such enforcement may be limited by applicable
      Bankruptcy, insolvency, and other similar laws affecting creditors’ rights
      generally.

     

    4.17. Material
      Adverse Change.
      There
      has been no material and adverse change in the assets, liabilities or financial
      or other condition of the Company since the date of any of the Financial
      Statements delivered to Lender under this Agreement.

     

    
      	
              5.

            	
              AFFIRMATIVE
                COVENANTS.

            

    

    

    The
      Company covenants and agrees that so long as any Liabilities remain outstanding,
      and (even if there shall be no Liabilities outstanding) so long as this
      Agreement remains in effect:

    

    5.1. Financial
      Statements.
      The
      Company shall keep and cause each Subsidiary to keep proper books of record
      and
      account in which full and true entries will be made of all dealings or
      transactions of or in relation to the businesses and affairs of the Company
      in
      accordance with GAAP consistently applied. 

     

    5.2. Inspection.
      The
      Lender, or any Person designated by Lender in writing, shall have the right,
      from time to time hereafter, to call at the Company’s place or places of
      business during reasonable business hours upon three (3) days prior notice,
      and,
      without hindrance or delay, (i) to inspect, audit, check and make copies of
      and extracts from the Company’s and Subsidiary’s respective books, records,
      journals, orders, receipts and any correspondence and other data relating to
      the
      Company’s and any Subsidiary’s businesses or to any transactions between the
      parties hereto, and (ii) to discuss the respective affairs, finances and
      businesses of the Company and any Subsidiary with any of the respective
      officers, employees or directors of the Company or Subsidiary.

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

       

    

    5.3. Conduct
      of Business.
      The
      Company shall maintain its corporate existence, shall maintain in full force
      and
      effect all licenses, bonds, franchises, leases, trademarks, patents, contracts
      and other rights necessary or reasonably desirable to the profitable conduct
      of
      its businesses, shall continue in, and limit its operations to, the same general
      type of business as that presently conducted by it and shall comply in all
      material respects with all applicable laws and regulations of any federal,
      state
      or local governmental authority.

     

    5.4. Claims
      and Taxes.
      The
      Company agrees to indemnify and hold the Lender harmless from and against any
      and all claims, demands, liabilities, losses, damages, penalties, costs, and
      expenses (including reasonable attorneys’ fees) relating to or in any way
      arising out of the possession, use, operation or control of any of the Company’s
      assets. The Company shall pay or cause to be paid all license fees, bonding
      premiums and related taxes and charges, and shall pay or cause to be paid all
      taxes, assessments and government charges or levies on it or its properties,
      at
      such times and in such manner as to prevent any penalty from accruing or any
      lien or charge from attaching to such property, provided that the Company shall
      have the right to contest in good faith, by an appropriate proceeding promptly
      initiated and diligently conducted, the validity, amount or imposition of any
      such tax, assessment, charge or levy.

     

    5.5. Lender’s
      Closing Costs and Expenses.
      The
      Company shall reimburse the Lender on demand for all reasonable expenses and
      fees paid or incurred in connection with the documentation, negotiation and
      closing of the transactions described herein, including, without limitation,
      filing and recording fees and reasonable attorneys’ fees of Lender’s
      counsel.

     

    5.6. Maintain
      Property.
      The
      Company will maintain its property in good condition (reasonable wear and tear
      excepted) and make all necessary renewals, repairs, replacements, additions,
      betterments and improvements thereto.

     

    5.7. Company’s
      Property and Liability Insurance.
      The
      Company shall at its expense, keep and maintain its assets insured against
      loss
      or damage by fire, theft, explosion, spoilage and all other hazards and risks
      ordinarily insured against by other owners or users of such properties in
      similar businesses in an amount reasonably acceptable to Lender. All such
      policies of insurance shall be in form and substance satisfactory to Lender.
      In
      addition, Company shall maintain adequate liability insurance in an amount,
      form
      and content reasonably acceptable to Lender.

     

    5.8.  Notice
      of Suit or Adverse Change in Business.
      The
      Company shall, as soon as possible, and in any event within fifteen (15) days
      after it learns of the following, give written notice to the Lender of
      (i) any material proceeding(s) being instituted by or against the Company
      or any Subsidiary, in any federal, state, local or foreign court or before
      any
      commission or other regulatory body (federal, state, local or foreign), and
      (ii) any material adverse change in the business, assets or condition,
      financial or otherwise, of the Company. For purposes of this Agreement, any
      information filed with the Securities and Exchange Commission shall satisfy
      the
      requirement of providing written notice to the Lender.

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

       

    

    5.9. Reporting
      Requirements.
      The
      Company shall furnish to the Lender (for purposes of this Agreement, any
      information filed with the Securities and Exchange Commission shall be
      considered furnished to the Lender as of the date of such filing):

     

    (i) Quarterly
      Financial Statements.
      As soon
      as available and in any event within forty-five (45) days after the end of
      each
      fiscal quarter balance sheets of the Company as of the end of such quarter,
      statements of income and retained earnings of the Company for the period
      commencing at the end of the previous quarter and ending with the end of such
      quarter, and statements of changes in financial position of the Company, all
      in
      reasonable detail and stating in comparative form the respective figures for
      the
      year to date and all prepared in accordance with generally accepted accounting
      principles consistently applied and certified by the chief financial officer
      of
      the Company.

     

    (ii) Annual
      Financial Statements.
      As soon
      as available and in any event within one hundred twenty (120) days after the
      end
      of each fiscal year of the Company, balance sheets of the Company as of the
      end
      of such fiscal year, and statements of income and retained earnings of the
      Company for such fiscal year, and statements of changes in financial position
      of
      the Company for such fiscal year, all in reasonable detail and stating in
      comparative form the respective figures for the corresponding date and period
      in
      the prior fiscal year and all prepared on an audited basis, and in accordance
      with generally accepted accounting principles consistently applied by an
      accounting firm acceptable to the Lender.

     

    (iii) Notice
      of Litigation.
      Promptly after the commencement thereof, notice of all actions, suits, and
      proceedings before any court or governmental department, commission, board,
      bureau, agency, or instrumentality, domestic or foreign affecting the Company
      which, if determined adversely to the Company, would have a material adverse
      effect on the financial condition, properties, or operations of the
      Company.

     

    (iv) Notice
      of Defaults and Events of Default.
      As soon
      as reasonably possible and in any event within five (5) days after the
      occurrence of each Default, a written notice setting forth the details of such
      Default and the action which is proposed to be taken by the Company, with
      respect thereto.

     

    (v) General
      Information.
      Such
      other information respecting the condition or operations, financial or
      otherwise, of the Company as the Lender may from time to time reasonably request
      including without limitation customer lists including addresses of account
      debtors. Lender agrees to hold any confidential information which it may receive
      from Company pursuant to this Agreement in confidence except for disclosure
      on a
      need to know basis (i) to affiliates of Lender or any participants in the Loans,
      (ii) to legal counsel, accountants and other professional advisors to Lender,
      (iii) to regulatory officers, or (iv) to any Person as requested pursuant
      to or as required by law, regulation or legal process.

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

       

    

    
      	
              6.

            	
              NEGATIVE
                COVENANTS.

            

    

    

    The
      Company covenants and agrees that so long as any Liabilities remain outstanding,
      and (even if there shall be no Liabilities outstanding) so long as this
      Agreement remains in effect (unless the Lender shall give its prior written
      consent thereto):

     

    6.1. Encumbrances.
      Except
      for the Permitted Liens, the Company will not create, incur, assume, or suffer
      to exist, any mortgage, deed of trust, pledge, lien, security interest,
      hypothecation, assignment, deposit arrangement, or other preferential
      arrangement, charge, or encumbrance (including, without limitation, any
      conditional sale, or other title retention agreement, or finance lease) of
      any
      nature, upon or with respect to any of its properties, now owned or hereafter
      acquired, or sign or file, or permit any Subsidiary to sign or file, under
      the
      Uniform Commercial Code of any jurisdiction a financing statement (other than
      financing statements related to Permitted Liens and financing statements
      required to be executed by lessors under operating leases entered into by
      Company or any Subsidiary with said lessors) which names the Company as a
      debtor, or sign any security agreement authorizing any secured party thereunder
      to file such financing statement.

     

    6.2. Disposal
      of Property.
      The
      Company shall not nor allow any Subsidiary to sell, assign, transfer or
      otherwise dispose of any of its respective equipment to any Person without
      the
      Lender’s prior written consent other than in the normal course of business in
      connection with the sale of obsolete or no longer used equipment of Company
      or
      any Subsidiary.

     

    6.3. Amendment
      of Certificate of Incorporation or By-Laws.
      Company
      shall not amend its Articles of Incorporation or By-Laws, charter or other
      organizational documents without the Lender’s prior written
      consent.

     

    6.4. Transactions
      with Affiliates.
      Company
      will not, without the prior written consent of the Lender, enter into any
      transaction including, without limitation, the lending or borrowing of monies,
      the purchase, sale or exchange of property or the rendering of any service
      to
      any Affiliate, except in the ordinary course of and pursuant to the reasonable
      requirements of Company’s business and upon fair and reasonable terms no less
      favorable to Company than would be obtained in a comparable arm’s length
      transaction with an unaffiliated person or corporation.

     

    6.5. Acquisitions.
      The
      Company shall not directly or indirectly acquire or merge with any other Person
      without the prior written consent of Lender.

     

    6.6. Debt.
      Company
      shall not incur any further Debt from any other Person other than (i) Debt
      owed
      by Company to the Lender or (ii) Debt to the Persons disclosed to Lender in
      the
      financial statements of Company delivered to Lender prior to the date hereof
      or
      (iii) accounts payable incurred in the ordinary course of business to trade
      creditors for goods or services or (iv) current operating liabilities incurred
      in the ordinary course of business (other than for borrowed money) or (v) Debt
      in connection with purchase money financing and Capital Leases but not exceeding
      the amount as set forth in Section 1.1(xx) or (vi) Debt owed to Fagenson &
Co., as agents for certain lenders, under a Credit Agreement secured by the
      stock of Plastic Printing Professionals, Inc., the Company’s wholly owned
      subsidiary.

     

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

       

    

    6.7. Dividends.
      Company
      may not pay any dividends or make any distributions to any shareholder of
      Company at any time that Revolving Loans are outstanding. 

     

    6.8. Mergers,
      Etc.
      The
      Company shall not wind up, liquidate or dissolve itself, reorganize, merge
      or
      consolidate with or into, or convey, sell, assign, transfer, lease, or otherwise
      dispose of (whether in one transaction or in a series of transactions) all
      or
      substantially all of its assets (whether now owned or hereafter acquired) to
      any
      Person.

     

    6.9. Investments.
      The
      Company shall not make, or permit any Subsidiary to make, any loan or advance
      to
      any Person, or purchase or otherwise acquire, or permit any Subsidiary to
      purchase or otherwise acquire, any capital stock, assets, obligations, or other
      securities of, make any capital contribution to, or otherwise invest in or
      acquire any interest in any Person, or participate as a partner or joint
      venturer with any other Person, except: (1) direct obligations of the United
      States or any agency thereof with maturities of one year or less from the date
      of acquisition; (2) commercial paper of a domestic issuer rated at least “A-1”
by Standard & Poor’s Corporation or “P-1” by Moody’s Investors Service, Inc.
      at the time of said investment; (3) certificates of deposit with maturities
      of
      one year or less from the date of acquisition issued by any commercial Lender
      having capital and surplus in excess of Four Hundred Million and No/100 Dollars
      ($400,000,000.00) at the time of said investment; (4) stock, obligations, or
      securities received in settlement of debts (created in the ordinary course
      of
      business) owing to the Company or any Subsidiary; and (5) repurchase
      agreements or eurodollar currency deposit investments with any commercial Lender
      which meets the financial requirements of subsection (3) hereof at the time
      of
      said investment.

     

    
      	
              7.

            	
              DEFAULT,
                RIGHTS AND REMEDIES OF THE LENDER.

            

    

     

    7.1. Liabilities.
      If a
      Default shall exist or occur and be continuing, and upon the expiration of
      any
      applicable cure period, the Lender may without notice declare all of the
      Liabilities immediately due and payable, in the Lender’s sole discretion, in
      either (a) immediately available funds or (b) newly issued common stock of
      the
      Company valued at the average closing price of the such common stock for the
      prior ten Business Days. 

     

    7.2. Rights
      and Remedies Generally.
      If a
      Default shall exist or occur and be continuing, and upon the expiration of
      any
      applicable cure period, the Lender shall have, in addition to any other rights
      and remedies contained in this Agreement and the Transaction Documents, all
      of
      the rights and remedies under applicable laws, all of which rights and remedies
      shall be cumulative, and none exclusive, to the extent permitted by
      law.

     

    7.3. Termination
      of Agreements.
      Upon
      the occurrence of any Default, Lender may also, with or without proceeding
      with
      sale or foreclosure or demanding payment of the Liabilities, without notice,
      terminate Lender’s further performance under this Agreement or any other
      agreement or agreements between Lender and Company and in addition may suspend
      Lender’s obligation to make any further advances hereunder during any cure
      period without further liability or obligation by Lender, and may also, upon
      the
      occurrence of any Default, appropriate and apply on any Liabilities any and
      all
      balances, credits, deposits, accounts, reserves, indebtedness, or other monies
      due or owing to Company or held by Lender hereunder or under any such financing
      agreement or otherwise, whether accrued or not. Neither such termination, nor
      the termination of this Agreement by lapse of time, the giving of notice, or
      otherwise, shall absolve, release, or otherwise affect the liability of Company
      in respect of transactions had prior to such termination, nor affect any of
      the
      liens, security interests, rights, powers and remedies of Lender, but they
      shall, in all events, continue until all indebtedness and Liabilities of Company
      to Lender are satisfied. Lender shall not, in any manner, be liable to Company
      for any failure to make or continue to make any Loans or advances to Company
      hereunder as a result of Lender refusal to so make said Loans or advances in
      accordance with the terms of this paragraph.

     

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

       

    

    7.4. Waiver
      of Demand.
      Demand,
      presentment, protest and notice of nonpayment are hereby waived by the Company.
      The Company also waives the benefit of all valuation, appraisal and exemption
      laws.

     

    
      	
              8.

            	
              MISCELLANEOUS.

            

    

     

    8.1. Waiver.
      The
      Lender’s failure, at any time or times hereafter, to require strict performance
      by the Company of any provision of this Agreement shall not waive, affect or
      diminish any right of the Lender thereafter to demand strict compliance and
      performance therewith. Any suspension or waiver by the Lender of a Default
      under
      this Agreement shall not suspend, waive or affect any other Default under this
      Agreement, whether the same is prior or subsequent thereto and whether of the
      same or of a different kind or character. None of the undertakings, agreements,
      warranties, covenants and representations of the Company contained in this
      Agreement and no Default under this Agreement shall be deemed to have been
      suspended or waived by the Lender unless such suspension or waiver is in writing
      signed by an officer of the Lender, and directed to the Company specifying
      such
      suspension or waiver. If requested in writing by Company, Lender shall give
      written confirmation to Company of any suspension or waiver by Lender as
      described in this Section.

     

    8.2. Costs
      and Attorneys’ Fees.
      If at
      any time or times hereafter the Lender employs counsel in connection with
      any matters contemplated by or arising out of this Agreement, whether
      (a) to commence, defend, or intervene in any litigation or to file a
      petition, complaint, answer, motion or other pleadings, (b) to take any
      other action in or with respect to any suit or proceeding (Bankruptcy or
      otherwise), (c) to consult with officers of the Lender to advise the
      Lender, or (d) enforce any rights of the Lender to collect any of the
      Liabilities, then in any of such events, all of the reasonable attorneys’ fees
      arising from such services, and any expenses, costs and charges relating
      thereto, including, without limitation, all fees of all paralegals, together
      with interest at the Default Rate described in Section 2.6 above then in
      effect, shall be part of the Liabilities, payable on demand.

     

    8.3. Expenditures
      by the Lender.
      In the
      event Company shall fail to pay taxes, insurance, assessments, costs or expenses
      which the Company is, under any of the terms hereof, required to pay, the Lender
      may, in its sole discretion, make expenditures for any or all of such purposes,
      and the amount so expended, together with interest thereon at the Default Rate
      described in Section 2.6 above, shall be part of the Liabilities, payable on
      demand.

     

    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

       

    

    8.4. Reliance
      by the Lender.
      All
      covenants, agreements, representations and warranties made herein by the
      Company, shall, notwithstanding any investigation by the Lender, be deemed
      to be
      material to, and to have been relied upon by, the Lender.

     

    8.5. Parties.
      Whenever in this Agreement there is reference made to any of the parties hereto,
      such reference shall be deemed to include, wherever applicable, a reference
      to
      the respective successors and assigns of each of the Company, and the
      Lender.

     

    8.6. Applicable
      Law; Severability.
      This
      Agreement shall be construed in all respects in accordance with, and governed
      by, the internal laws (as opposed to conflicts of law provisions) of the State
      of New York. Wherever possible, each provision of this Agreement shall be
      interpreted in such manner as to be effective and valid under applicable law,
      but if any provision of this Agreement shall be prohibited by or invalid under
      applicable law, such provision shall be ineffective only to the extent of such
      prohibition or invalidity, without invalidating the remainder of such provisions
      or the remaining provisions of this Agreement.

     

    8.7. Cumulative
      Effect.
      All
      covenants, conditions, provisions, warranties, guaranties, indemnities and
      other
      undertakings of the Company contained in this Agreement, or in the Loan
      Documents or in any schedule given to Lender or contained in any other agreement
      between Lender and the Company, heretofore, concurrently, or hereafter entered
      into, shall be deemed cumulative to and not in derogation or substitution of
      any
      of the terms, covenants, conditions or agreements of the Company herein
      contained. The failure or delay of Lender to exercise or enforce any rights,
      liens, powers or remedies hereunder or under the Loan Documents or the other
      aforesaid agreements or other documents or against any security or collateral
      shall not operate as a waiver of such liens, rights, powers and remedies, but
      all such liens, rights powers and remedies shall continue in full force and
      effect until all Liabilities shall have been fully satisfied, and all liens,
      rights, powers and remedies herein provided for are cumulative and none are
      exclusive.

     

    8.8. Amendments,
      Etc.
      No
      amendment, modification, termination, or waiver of any provision of the
      Agreement, any Loan Document, nor consent to any departure by any of the parties
      from any Loan Document to which it is a party, shall in any event be effective
      unless the same shall be in writing and signed by the Lender, and then such
      waiver or consent shall be effective only in the specific instance and for
      the
      specific purpose for which given.

     

    8.9. Integration.
      This
      Agreement and the Loan Documents contain the entire agreement between the
      parties relating to the subject matter hereof and supersedes all oral statements
      and prior writings with respect thereto.

     

    8.10. Indemnity.
      The
      Company hereby agrees to defend, indemnify, and hold the Lender harmless from
      and against any and all claims, damages, judgments, penalties, costs and
      expenses (including attorney fees and court costs now or hereafter arising
      from
      the aforesaid enforcement of this clause) arising directly or indirectly from
      the activities of the Company and its Subsidiaries, its predecessors in
      interest, or third parties with whom it has a contractual relationship, or
      arising directly or indirectly from the violation of any environmental
      protection, health, or safety law, whether such claims are asserted by any
      governmental agency or any other Person. This indemnity shall survive
      termination of this Agreement.

     

    
      
        
        

      

      
        18

        
          

        

      

      
        
        

      

       

    

    8.11. Submission
      to Jurisdiction; Waiver of Jury Trial.
      TO
      INDUCE THE LENDER TO MAKE THE LOANS EVIDENCED BY THIS AGREEMENT, THE COMPANY,
      IRREVOCABLY AGREES THAT, ALL ACTIONS ARISING DIRECTLY OR INDIRECTLY AS A RESULT
      OR IN CONSEQUENCE OF THIS AGREEMENT OR ANY OTHER AGREEMENT WITH THE LENDER
      SHALL
      BE INSTITUTED AND LITIGATED ONLY IN COURTS HAVING SITUS IN THE CITY OF
      ROCHESTER, NEW YORK, AND THE COMPANY HEREBY CONSENTS TO THE EXCLUSIVE
      JURISDICTION AND VENUE OF ANY STATE OR FEDERAL COURT LOCATED AND HAVING ITS
      SITUS IN SAID CITY, AND WAIVES ANY OBJECTION BASED ON FORUM NONCONVENIENS,
      AND
      THE COMPANY HEREBY WAIVES PERSONAL SERVICE OF ANY AND ALL PROCESS, AND CONSENTS
      THAT ALL SUCH SERVICE OF PROCESS MAY BE MADE BY CERTIFIED MAIL, RETURN RECEIPT
      REQUESTED, DIRECTED TO THE COMPANY AT THE ADDRESSES INDICATED IN THE LENDER’S
      RECORDS IN THE MANNER PROVIDED BY APPLICABLE STATUTE, LAW, RULE OF COURT OR
      OTHERWISE.

    

    THE LENDER
      AND THE COMPANY, KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE IRREVOCABLY,
      THE
      RIGHT IT MAY HAVE TO TRIAL BY JURY WITH RESPECT TO ANY LEGAL PROCEEDING
      BASED HEREON, OR ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT
      OR
      ANY OF THE OTHER OBLIGATIONS OR ANY AGREEMENT, EXECUTED OR CONTEMPLATED TO
      BE
      EXECUTED IN CONJUNCTION HEREWITH OR ANY COURSE OF CONDUCT OR COURSE OF DEALING,
      IN WHICH THE LENDER AND THE COMPANY, OR ANY ONE OF THEM, ARE ADVERSE PARTIES.
      THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE LENDER GRANTING ANY FINANCIAL
      ACCOMMODATION TO THE COMPANY. ALL WAIVERS HEREIN ARE MADE ONLY TO THE EXTENT
      PERMITTED BY APPLICABLE LAW. 

    

    8.12. Application
      of Payments.
      Notwithstanding any contrary provision contained in this Agreement, the Company
      irrevocably waives the right to direct the application of any and all payments
      at any time or times hereafter received by the Lender from or on behalf of
      the
      Company, and the Company does hereby irrevocably agree that the Lender shall
      have the continuing exclusive right to apply and reapply any and all payments
      received at any time or times hereafter, against the Liabilities in such manner
      as the Lender may deem advisable, notwithstanding any entry by the Lender upon
      any of its books and records.

     

    8.13. Marshalling;
      Payments Set Aside.
      The
      Lender shall be under no obligation to marshall any assets in favor of the
      Company or any other party or against or in payment of any or all of the
      Liabilities. To the extent that the Company makes a payment or payments to
      the
      Lender or Lender enforces its security interests or exercises its rights of
      setoff, and such payment or payments or the proceeds of such enforcement or
      setoff or any part thereof are subsequently invalidated, declared to be
      fraudulent or preferential, set aside and/or required to be repaid to a trustee,
      receiver or any other party under any Bankruptcy law, state or federal law,
      common law or equitable cause, then to the extent of such recovery, the
      obligation or part thereof originally intended to be satisfied shall be revived
      and continued in full force and effect as if such payment had not been made
      or
      such enforcement or setoff had not occurred.

     

    
      
        
        

      

      
        19

        
          

        

      

      
        
        

      

       

    

    8.14. Section
      Titles.
      The
      section titles contained in this Agreement shall be without substantive meaning
      or content of any kind whatsoever and are not a part of the agreement between
      the parties.

     

    8.15. Continuing
      Effect.
      This
      Agreement shall continue in full force and effect so long as any Liabilities
      shall be owed to the Lender, and (even if there shall be no Liabilities
      outstanding) so long as this Agreement has not been terminated in accordance
      with its terms.

     

    8.16. Notices.
      Except
      as otherwise expressly provided herein, any notice required or desired to be
      served, given or delivered hereunder shall be in writing, and shall be deemed
      to
      have been validly served, given, delivered and/or received when
      (i) presented personally, or (ii) on the second business day next
      following deposit in the United States mails, with proper postage prepaid,
      registered or certified, return receipt requested, or (iii) on the first
      business day next following the day of delivery to Federal Express for delivery
      to the addressee, addressed to the party to be notified as follows:

    (i) If
      to the
      Lender:

    

    
      	 	 	 	 	
              Patrick
                White

            

    

    28
      East
      Main Street

    Suite
      1525 

    Rochester,
      NY 14614

     

    (ii) If
      to
      Company:

    

    Document
      Security Systems, Inc.

    28
      East
      Main Street

    Suite
      1525 

    Rochester,
      NY 14614

    Attention: Vice
      President of Finance 

     

    or
      to
      such other address as each party designates to the other in the manner herein
      prescribed.

     

    8.17. Equitable
      Relief.
      Company
      recognizes that, in the event Company fails to perform, observe or discharge
      any
      of its obligations or liabilities under this Agreement, Lender’s remedy at law
      may prove to be inadequate relief to Lender; therefore, Company agrees that
      Lender, if Lender so requests, shall be entitled to temporary and permanent
      injunctive relief if Lender proves its entitlement to such equitable
      relief.

     

    
      
        
        

      

      
        20

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF, this Agreement has been duly executed as of the day and year
      first above written.

     

    
      	 	 	 
	 	DOCUMENT
              SECURITY SYSTEMS, INC.
	 
 	 
 	 
 
	 	By:  	/s/ Phil Jones
	 	
              
Name:
              Phil Jones
	 	Title:
              Vice President of Finance

    
      	 	
              /s/
                Patrick White

            
	 	
              
Patrick
              White
	 	 

    

     

    
      
        
        

      

      
        21SECURITY
      AGREEMENT

     

    SECURITY
      AGREEMENT, dated January 4, 2008, made by DOCUMENT SECURITY SYSTEMS, INC. (the
      “Borrower”), in favor of PATRICK WHITE (“Lender”).

     

    WITNESSETH:

     

    WHEREAS,
      the Lender and the Borrower are parties to a Credit Agreement, dated as of
      the
      date hereof (such agreement, as amended, restated or otherwise modified from
      time to time, being hereinafter referred to as the “Credit
      Agreement”);

     

    WHEREAS,
      pursuant
      to the Credit Agreement, the Lender has agreed to make certain term loans (each
      a “Loan” and collectively, the “Loans”) to the Borrower
      in an
      aggregate principal amount at any one time outstanding not to exceed the Maximum
      Revolving Commitment (as defined in the Credit Agreement);  

     

    WHEREAS,
      it is a condition precedent to the Lender making any Loan to the Borrower
      pursuant to the Credit Agreement, that the Borrower shall have executed and
      delivered to the Lender a security agreement providing for the grant to Lender
      of a security interest in all of the accounts receivable of the
      Company;

     

    NOW,
      THEREFORE, in consideration of the premises and the agreements herein and in
      order to induce the Lender to make and maintain the Loans pursuant to the Credit
      Agreement, the Company hereby jointly and severally agrees with the Lender
      as
      follows:

     

    SECTION
      1. Definitions.

     

    (a) Reference
      is hereby made to the Credit Agreement for a statement of the terms thereof.
      All
      terms used in this Agreement and the recitals hereto which are defined in the
      Credit Agreement or in Article 9 of the Uniform Commercial Code (the “Code”) as
      in effect from time to time in the State of New York and which are not otherwise
      defined herein shall have the same meanings herein as set forth therein;
provided
      that
      terms used herein which are defined in the Code as in effect
      in
      the State of New York on the date hereof shall continue to have the same meaning
      notwithstanding any replacement or amendment of such statute except as Lender
      may otherwise determine. 

     

    (b) As
      used
      in this Agreement, the following terms shall have the respective meanings
      indicated below, such meanings to be applicable equally to both the singular
      and
      plural forms of such terms:

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    SECTION
      2. Grant
      of Security Interest.
      As
      collateral security for all of the Obligations (as defined in Section 3 hereof),
      the Company hereby pledges and assigns to the Lender, and grants to the Lender,
      a continuing security interest in all of the accounts receivable of the Company,
      whether now outstanding or as of a future date (the “Collateral”).

     

    SECTION
      3. Security
      for Obligations.
      The
      security interest created hereby in the Collateral constitutes continuing
      collateral security for all of the following obligations, whether now existing
      or hereafter incurred (the “Obligations”):

     

    (a) the
      prompt payment by the Company, as and when due and payable (by scheduled
      maturity, required prepayment, acceleration, demand or otherwise), of all
      amounts from time to time owing by it in respect of the Credit Agreement and
      the
      other Loan Documents, including, without limitation, (i) principal of and
      interest on the Loans (including, without limitation, all interest that accrues
      after the commencement of any Insolvency Proceeding of the Company, whether
      or
      not the payment of such interest is unenforceable or is not allowable due to
      the
      existence of such Insolvency Proceeding), and (ii) all fees, commissions,
      expense reimbursements, indemnifications and all other amounts due or to become
      due under any Loan Document; and

     

    (b) the
      due
      performance and observance by the Company of all of its other obligations from
      time to time existing in respect of the Loan Documents.

     

    SECTION
      4. Representations
      and Warranties.
      The
      Company represents and warrants as follows:

     

    (a) The
      Company (i) is a corporation duly organized, validly existing and in good
      standing under the laws of the state or jurisdiction of its organization,
      (ii) has all requisite power and authority to execute, deliver and perform
      this Agreement and each other Loan Document to be executed and delivered by
      it
      pursuant hereto and to consummate the transactions contemplated hereby and
      thereby, and (iii) is duly qualified to do business and is in good standing
      in each jurisdiction in which the character of the properties owned or leased
      by
      it or in which the transaction of its business makes such qualification
      necessary.

     

    (b) The
      execution, delivery and performance by the Company of this Agreement and each
      other Loan Document to which the Company is a party or will be a party (i)
      have
      been duly authorized by all necessary action, (ii) do not and will not
      contravene its charter or by-laws, or any applicable law or any contractual
      restriction binding on or otherwise materially affecting the Company, (iii)
      do
      not and will not result in or require the creation of any Lien upon or with
      respect to any of its properties and (iv) do not and will not result in any
      default, noncompliance, suspension, revocation, impairment, forfeiture or
      nonrenewal of any permit, license, authorization or approval applicable to
      it or
      its operations or any of its properties.

     

    (c) This
      Agreement is, and each other Loan Document to which the Company is or will
      be a
      party, when executed and delivered pursuant hereto, will be, a legal, valid
      and
      binding obligation of the Company, enforceable against the Company in accordance
      with its terms, except as may be limited by applicable bankruptcy, insolvency,
      reorganization, moratorium or other similar laws.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (d) The
      Company is and will be at all times the sole and exclusive owners of, or
      otherwise have and will have adequate rights in, the Collateral free and clear
      of any Lien except for (i) the Lien created by this Agreement and
      (ii) the Permitted Liens. No effective financing statement or other
      instrument similar in effect covering all or any part of the Collateral is
      on
      file in any recording or filing office except (A) such as may have been
      filed in favor of Lender relating to this Agreement and (B) such as may
      have been filed to perfect or protect any security interests or Liens permitted
      by the Credit Agreement.

     

    (e) This
      Agreement creates in favor of Lender a legal, valid and enforceable security
      interest in the Collateral, as security for the Obligations. 

     

    SECTION
      5. Covenants
      as to the Collateral.
      So long
      as any of the Obligations shall remain outstanding and the Credit Agreement
      and
      the other Loan Documents shall not have expired or terminated, unless Lender
      shall otherwise consent in writing:

     

    (a) Further
      Assurances.
      The
      Company will at its expense, at any time and from time to time, promptly execute
      and deliver all further instruments and documents and take all further action
      that may be necessary or desirable or that Lender may request in order to
      (i) perfect and protect the security interest purported to be created
      hereby; (ii) enable Lender to exercise and enforce its rights and remedies
      hereunder in respect of the Collateral; or (iii) otherwise effect the
      purposes of this Agreement.

     

    (b) Transfers
      and Other Liens.

     

    (i) Except
      to
      the extent expressly permitted by the Credit Agreement, the Company will not
      sell or otherwise transfer (by operation of law or otherwise) any of the
      Collateral.

     

    (ii) Except
      to
      the extent expressly permitted by the Credit Agreement, the Company will not
      create, suffer to exist or grant any Lien upon or with respect to any
      Collateral.

     

    SECTION
      6. Additional
      Provisions Concerning the Collateral.

     

    (a) The
      Company hereby (i) authorizes Lender to file, one or more financing or
      continuation statements, and amendments thereto, relating to the Collateral
      and
      (ii) ratifies such authorization to the extent that Lender has filed any
      such financing or continuation statements, or amendments thereto, prior to
      the
      date hereof. A photocopy or other reproduction of this Agreement or any
      financing statement covering the Collateral or any part thereof shall be
      sufficient as a financing statement where permitted by law.

     

    (b) The
      Company hereby irrevocably appoints Lender as its attorney-in-fact and proxy,
      with full authority in the place and stead of the Company and in the name of
      the
      Company or otherwise, from time to time in Lender’s discretion, to take any
      action and to execute any instrument which Lender may deem necessary or
      advisable to accomplish the purposes of this Agreement (subject to the rights
      of
      the Company under Section 5 hereof), including, without limitation, to execute
      assignments, licenses and other documents to enforce the rights of Lender and
      the Lender with respect to any Collateral. This power is coupled with an
      interest and is irrevocable until all of the Obligations are indefeasibly paid
      in full after the termination of the Credit Agreement and the other Loan
      Documents. 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (c) The
      powers conferred on Lender hereunder are solely to protect its interest in
      the
      Collateral and shall not impose any duty upon it to exercise any such powers.
      Except for the safe custody of any Collateral in its possession and the
      accounting for moneys actually received by it hereunder, Lender shall have
      no
      duty as to any Collateral or as to the taking of any necessary steps to preserve
      rights against prior parties or any other rights pertaining to any
      Collateral.

     

    SECTION
      7. Remedies
      Upon Default.
      If any
      Event of Default shall have occurred and be continuing:

     

    (a) Lender
      may exercise in respect of the Collateral, in addition to any other rights
      and
      remedies provided for herein or otherwise available to it, all of the rights
      and
      remedies of a secured party upon default under the Code (whether or not the
      Code
      applies to the affected Collateral), and also may (i) take absolute control
      of the Collateral, including, without limitation, transfer into Lender’s name or
      into the name of its nominee or nominees (to the extent Lender has not
      theretofore done so) and thereafter receive, for the benefit of Lender, all
      payments made thereon, give all consents, waivers and ratifications in respect
      thereof and otherwise act with respect thereto as though it were the outright
      owner thereof, (ii) without notice except as specified below and without
      any obligation to prepare or process the Collateral for sale, sell the
      Collateral or
      any
      part thereof in one or more parcels at public or private sale, at any of
      Lender’s offices or elsewhere, for cash, on credit or for future delivery, and
      at such price or prices and upon such other terms as Lender may deem
      commercially reasonable. all
      Cash
      Proceeds received by Lender in respect of any sale of or collection from, or
      other realization upon, all or any part of the Collateral may, in the discretion
      of Lender, be held by Lender as collateral for, and/or then or at any time
      thereafter applied (after payment of any amounts payable to Lender pursuant
      to
      Section 8 hereof) in whole or in part by Lender against, all or any part of
      the
      Obligations in such order as Lender shall elect, consistent with the provisions
      of the Credit Agreement and the Intercreditor Agreements. Any surplus of such
      cash or Cash Proceeds held by Lender and remaining after the indefeasible
      payment in full of all of the Obligations after the termination of the Credit
      Agreement and the other Loan Documents shall be paid over to whomsoever shall
      be
      lawfully entitled to receive the same or as a court of competent jurisdiction
      shall direct.

     

    (b) In
      the
      event that the proceeds of any such sale, collection or realization are
      insufficient to pay all amounts to which Lender is legally entitled, the Company
      shall be liable for the deficiency, together with interest thereon at the
      highest rate specified in any applicable Loan Document for interest on overdue
      principal thereof or such other rate as shall be fixed by applicable law,
      together with the costs of collection and the reasonable fees, costs, expenses
      and other client charges of any attorneys employed by Lender to collect such
      deficiency.

     

    (c) The
      Company hereby acknowledges that if Lender complies with any applicable state
      or
      federal law requirements in connection with a disposition of the Collateral,
      such compliance will not adversely effect the commercial reasonableness of
      any
      sale or other disposition of the Collateral.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    SECTION
      8. Indemnity
      and Expenses.

     

    (a) The
      Company agrees to defend, protect, indemnify and hold Lender harmless from
      and
      against any and all claims, damages, losses, liabilities, obligations,
      penalties, fees, costs and expenses (including, without limitation, reasonable
      legal fees, costs, expenses, and disbursements of Lender’s counsel) to the
      extent that they arise out of or otherwise result from this Agreement
      (including, without limitation, enforcement of this Agreement), except claims,
      losses or liabilities resulting solely and directly from Lender’s gross
      negligence or willful misconduct, as determined by a final judgment of a court
      of competent jurisdiction.

     

    (b) The
      Company will upon demand pay to Lender the amount of any and all costs and
      expenses, including the reasonable fees, costs, expenses and disbursements
      of
      counsel for Lender and of any experts of Lender (including, without limitation,
      any collateral trustee which may act as agent of Lender), which Lender may
      incur
      in connection with (i) the preparation, negotiation, execution, delivery,
      recordation, administration, amendment, waiver or other modification or
      termination of this Agreement, (ii) the custody, preservation, use or
      operation of, or the sale of, collection from, or other realization upon, any
      Collateral, (iii) the exercise or enforcement of any of the rights of
      Lender hereunder, or (iv) the failure by the Company to perform or observe
      any of the provisions hereof.

     

    SECTION
      9. Notices,
      Etc.
      All
      notices and other communications provided for hereunder shall be in writing
      and
      shall be mailed (by certified mail, postage prepaid and return receipt
      requested), telecopied or delivered, if to the Company or to Lender, to it
      at
      its address specified in the Credit Agreement; or as to any such Person, at
      such
      other address as shall be designated by such Person in a written notice to
      such
      other Person complying as to delivery with the terms of this Section 9. All
      such
      notices and other communications shall be effective (i) if mailed (by
      certified mail, postage prepaid and return receipt requested), when received
      or
      three (3) Business Days after deposited in the mails, whichever occurs first,
      (ii) if telecopied, when transmitted and confirmation is received, provided
      same is on a Business Day and, if not, on the next Business Day; or
      (iii) if delivered, upon delivery, provided same is on a Business Day and,
      if not, on the next Business Day.

     

    SECTION
      10. Miscellaneous.

     

    (a) No
      amendment of any provision of this Agreement shall be effective unless it is
      in
      writing and signed by the Company and Lender, and no waiver of any provision
      of
      this Agreement, and no consent to any departure by the Company therefrom, shall
      be effective unless it is in writing and signed by Lender, and then such waiver
      or consent shall be effective only in the specific instance and for the specific
      purpose for which given.

     

    (b) No
      failure on the part of Lender to exercise, and no delay in exercising, any
      right
      hereunder or under any other Loan Document shall operate as a waiver thereof;
      nor shall any single or partial exercise of any such right preclude any other
      or
      further exercise thereof or the exercise of any other right. The rights and
      remedies of Lender in the other Loan Documents are cumulative and are in
      addition to, and not exclusive of, any rights or remedies provided by law.
      The
      rights of Lender against any party thereto are not conditional or contingent
      on
      any attempt by such Person to exercise any of its rights under any other Loan
      Document against such party or against any other Person, including but not
      limited to, the Company.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (c) Any
      provision of this Agreement which is prohibited or unenforceable in any
      jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
      such prohibition or unenforceability without invalidating the remaining portions
      hereof or thereof or affecting the validity or enforceability of such provision
      in any other jurisdiction.

     

    (d) This
      Agreement shall create a continuing security interest in the Collateral and
      shall (i) remain in full force and effect until the later of (A) the
      indefeasible payment in full of the Obligations and (B) the termination of
      the
      Credit Agreement and the other Loan Documents and (ii) be binding on the Company
      and all other Persons who become bound as debtor to this Agreement in accordance
      with Section 9-203(d) of the Code and shall inure, together with all rights
      and
      remedies of Lender and the Lender hereunder, to the benefit of Lender and the
      Lender and their respective permitted successors, transferees and assigns.
      Without limiting the generality of clause (ii) of the immediately preceding
      sentence, without notice to the Company, Lender may assign or otherwise transfer
      their rights and obligations under this Agreement and any other Loan Document,
      to any other Person and such other Person shall thereupon become vested with
      all
      of the benefits in respect thereof granted to Lender and the Lender herein
      or
      otherwise. Upon any such assignment or transfer, all references in this
      Agreement to Lender shall mean the assignee of Lender. None of the rights or
      obligations of the Company hereunder may be assigned or otherwise transferred
      without the prior written consent of Lender, and any such assignment or transfer
      shall be null and void.

     

    (e) Upon
      the
      satisfaction in full of the Obligations and the termination of the Credit
      Agreement and the other Loan Documents, (i) this Agreement and the security
      interests created hereby shall terminate and all rights to the Collateral shall
      revert to the Company and (ii) Lender will, upon the Company’s request and at
      the Company’s expense, (A) return to the Company such of the Collateral as shall
      not have been sold or otherwise disposed of or applied pursuant to the terms
      hereof and (B) execute and deliver to the Company such documents as the Company
      shall reasonably request to evidence such termination, all without any
      representation, warranty or recourse whatsoever.

     

    (f) THIS
      AGREEMENT SHALL BE GOVERNED BY, CONSTRUED AND INTERPRETED IN ACCORDANCE WITH
      THE
      LAWS OF THE STATE OF NEW YORK, EXCEPT AS REQUIRED BY MANDATORY PROVISIONS OF
      LAW
      AND EXCEPT TO THE EXTENT THAT THE VALIDITY AND PERFECTION OR THE PERFECTION
      AND
      THE EFFECT OF PERFECTION OR NON-PERFECTION OF THE SECURITY INTEREST CREATED
      HEREBY, OR REMEDIES HEREUNDER, IN RESPECT OF ANY PARTICULAR COLLATERAL ARE
      GOVERNED BY THE LAW OF A JURISDICTION OTHER THAN THE STATE OF NEW
      YORK.

     

    (g) ANY
      LEGAL ACTION, SUIT OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY DOCUMENT
      RELATED THERETO MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK IN THE
      COUNTY OF MONROE, AND, BY EXECUTION AND DELIVERY OF THIS AGREEMENT, THE COMPANY
      HEREBY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND
      UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID COURTS. THE COMPANY HEREBY
      EXPRESSLY AND IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY
      OBJECTION, INCLUDING, WITHOUT LIMITATION, ANY OBJECTION TO THE LAYING OF VENUE
      OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS,
      WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY SUCH ACTION, SUIT
      OR
      PROCEEDING IN SUCH RESPECTIVE JURISDICTIONS AND CONSENTS TO THE GRANTING OF
      SUCH
      LEGAL OR EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY THE
      COURT.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (h) THE
      COMPANY AND (BY ITS ACCEPTANCE OF THE BENEFITS OF THIS AGREEMENT) LENDER WAIVES
      ANY RIGHT IT MAY HAVE TO TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED ON,
      ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER LOAN
      DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, VERBAL OR WRITTEN
      STATEMENT OR OTHER ACTION OF THE PARTIES HERETO.

     

    
      (i) The
        Company irrevocably consents to the service of process of any of the aforesaid
        courts in any such action, suit or proceeding by the mailing of copies thereof
        by registered or certified mail (or any substantially similar form of mail),
        postage prepaid, to the Company at its address provided herein, such service
        to
        become effective 10 days after such mailing.

       

      (j) Nothing
        contained herein shall affect the right of Lender to serve process in any
        other
        manner permitted by law or commence legal proceedings or otherwise proceed
        against the Company or any property of the Company in any other
        jurisdiction.

       

      (k) The
        Company irrevocably and unconditionally waives any right it may have to claim
        or
        recover in any legal action, suit or proceeding referred to in this Section
        any
        special, exemplary, punitive or consequential damages.

       

      (l) Section
        headings herein are included for convenience of reference only and shall
        not
        constitute a part of this Agreement for any other purpose.

       

      (m) This
        Agreement may be executed in any number of counterparts and by different
        parties
        hereto in separate counterparts, each of which shall be deemed to be an
        original, but all of which taken together constitute one in the same
        Agreement.

       

      (n) All
        of
        the obligations of the Company hereunder are joint and several. Lender may,
        in
        its sole and absolute discretion, enforce the provisions hereof against any
        of
        the Company and shall not be required to proceed against the Company or seek
        payment from the Company. In addition, Lender may, in its sole and absolute
        discretion, select the Collateral of any one or more of the Company for sale
        or
        application to the Obligations, without regard to the ownership of such
        Collateral, and shall not be required to make such selection ratably from
        the
        Collateral owned by all of the Company. 

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

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      IN
        WITNESS WHEREOF, the Company has caused this Agreement to be executed and
        delivered by its officer thereunto duly authorized, as of the date first
        above
        written.

       

      
        	 	 	 
	 	DOCUMENT
                SECURITY SYSTEMS, INC.
	 
 	 
 	 
 
	 	By:  	/s/ Phil Jones
	 	
                

                Name:
                  Phil Jones

                Title:
                  Vice President of Finance

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00139-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00139-of-00352.parquet"}]]