Document:

EXHIBIT 10.19

                          COMMON STOCK PURCHASE WARRANT

THIS WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE HEREOF HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR
APPLICABLE STATE SECURITIES LAWS AND MAY NOT BE TRANSFERRED OR OTHERWISE
DISPOSED OF UNLESS REGISTERED UNDER THE ACT AND SUCH LAWS OR REGISTRATION UNDER
THE ACT AND SUCH LAWS IS NOT REQUIRED.

                         DOCUMENT SECURITY SYSTEMS, INC.

No. ____ Void after 500,000 Shares of Common Stock February 1, 2014

                        WARRANT TO PURCHASE COMMON STOCK

         This certifies that, for value received, IDT Venture Capital
Corporation or its registered assigns (the "Holder") is entitled to acquire from
Document Security Systems, Inc., a New York corporation (the "Company"), in
whole or in part, up to an aggregate of 500,000 fully paid and nonassessable
shares of Common Stock of the Company, at a per share purchase price equal to
$2.50, subject to the provisions and upon the terms and conditions hereinafter
set forth. The number and type of shares and the Current Warrant Price (as
defined below) are subject to adjustment from time to time pursuant to the
provisions of Section 5 hereof.

         As used herein, the terms "Common Stock" and "Common Shares" shall mean
the Company's presently authorized common stock, par value $0.02 per share, and
any stock into or for which such common stock may hereafter be converted or
exchanged.

         1. Definitions.

         Unless the context otherwise requires, when used herein the following
terms shall have the respective meanings set forth below:

         (a) "Additional Common Shares" shall mean all Common Shares issued by
the Company after the date hereof, other than Common Shares issuable upon
exercise of this Warrant.

         (b) "Board" shall mean the board of directors of the Company.

         (c) "Convertible Securities" shall mean evidences of indebtedness,
shares of stock or other securities which are convertible into or exchangeable,
with or without payment of additional consideration in cash or property, for
Additional Common Shares, either immediately or upon the occurrence of a
specified date or a specified event.

         (d) "Corporate Transaction" shall mean (x) any reorganization,
consolidation, merger, share exchange or similar business combination
transaction involving the Company with any other entity, (y) the sale,
assignment, conveyance, transfer, lease or other disposition by the Company of
all or substantially all of its assets or (z) the liquidation of the Company's
assets or the dissolution of the Company.

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         (e) "Current Warrant Price" shall mean the price at which a Common
Share may be purchased at any date pursuant to the exercise of this Warrant on
such date; the initial Current Warrant Price is stated in the preamble to this
Warrant.

         (f) "Exercise Period" shall have the meaning set forth in Section 2 of
this Warrant.

         (g) "Market Price" shall mean, with respect to a particular security,
on any given day, the average of the highest and lowest reported sale prices
regular way or, in case no such reported sales takes place on such day, the
average of the highest asked and lowest bid prices regular way, in either case
on the principal national securities exchange on which the applicable securities
are listed or admitted to trading, or if not listed or admitted to trading on
any national securities exchange, (i) the average of the highest and lowest sale
prices for such day reported by the Nasdaq Stock Market if such security is
traded over-the-counter and quoted in the Nasdaq Stock Market, or (ii) if such
security is so traded, but not so quoted, the average of the highest reported
asked and lowest reported bid prices of such security as reported by the Nasdaq
Stock Market or any comparable system, or (iii) if such security is not traded
on the Nasdaq Stock Market or any comparable system, the average of the highest
asked and lowest bid prices as furnished by two members of the National
Association of Securities Dealers, Inc. selected from time to time by the
Company in good faith for that purpose. If such security is not listed and
traded in a manner that the quotations referred to above are available for the
period required hereunder, the Market Price per share of Common Stock shall be
deemed to be the fair value per share of such security as determined in good
faith by the Board.

         (h) "Person" shall mean any individual, sole proprietorship,
partnership, limited liability company, joint venture, trust, incorporated
organization, association, corporation, institution, public benefit corporation,
entity or government (whether federal, state, provincial, county, city,
municipal or otherwise, including, without limitation, any instrumentality,
division, agency, body or department thereof).

         (i) "Warrant" shall mean the warrant represented hereby, as the same
may be amended, restated, supplemented or otherwise modified from time to time.

         2. Term of Warrant.

         The purchase right represented by this Warrant is exercisable, in whole
or in part, at any time and from time to time during the period beginning on
February 1, 2004 and ending at 11:59 p.m., New York City time, on February 1,
2014 (the "Exercise Period").

         3. Method of Exercise; Payment; Issuance of New Warrant.

         The purchase right represented by this Warrant may be exercised by the
Holder at any time and from time to time during the Exercise Period, in whole or
in part, by (a) the surrender of this Warrant (with the notice of exercise form
attached hereto as Exhibit 1 duly executed) at the principal office of the
Company and (b) the payment to the Company of an amount equal to the Current
Warrant Price multiplied by the number of shares then being purchased, at the
election of the Holder in one of the following manners: (i) by certified or
cashier's check or by wire transfer payable to the order of the Company, (ii) by
having the Company withhold shares of Common Stock issuable upon exercise of

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this Warrant equal in value to the aggregate Current Warrant Price as to which
this Warrant is so exercised (or any portion thereof) based on the Market Price
of the Common Stock on the trading day prior to the date on which this Warrant
is surrendered as aforesaid; (iii) by delivering to the Company shares of Common
Stock equal in value to the aggregate Current Warrant Price as to which this
Warrant is so exercised (or any portion thereof) based on the Market Price of
the Common Stock on the trading day prior to the date on which this Warrant is
surrendered as aforesaid; or (iv) any combination of the foregoing. The Company
agrees that the shares so purchased shall be deemed to be issued to the Holder
as the record owner of such shares as of the close of business on the date on
which this Warrant shall have been surrendered and payment made for such shares
as aforesaid. In the event of any exercise of this Warrant, certificates for the
shares of stock so purchased shall be delivered to the Holder within a
reasonable time, not to exceed three (3) business days thereafter, and, unless
this Warrant has been fully exercised or expired, a new Warrant representing the
portion of the shares, if any, with respect to which this Warrant shall not then
have been exercised, shall also be issued to the Holder within a reasonable
time, not exceeding such three (3)-business day period.

         4. Stock Fully Paid; Reservation of Shares; Listing.

         All Common Shares which may be issued upon the exercise of the rights
represented by this Warrant will, upon issuance, be duly and validly authorized
and issued, fully paid and nonassessable, free from all preemptive rights and
free from all taxes, liens, security interests and charges with respect to the
issue thereof. Until the expiration of the Exercise Period, the Company shall at
all times have authorized, and reserved for the purpose of the issuance upon
exercise of the purchase rights evidenced by this Warrant, a sufficient number
of shares of its Common Stock to provide for the exercise of the rights
represented by this Warrant. The Company will procure, at its sole expense, the
listing of the shares issuable upon exercise of this Warrant on the principal
stock exchange (or the Nasdaq Stock Market) on which the Common Stock is then
listed or traded (if any). The Company agrees to take all action necessary to
ensure that the shares issuable upon exercise of this Warrant may be issued
without violation of any applicable law or regulation or of any requirement of
any securities exchange (or the Nasdaq Stock Market) on which such shares are
listed or traded.

         5. Adjustment of Purchase Price and Number of Shares.

         The kind of securities purchasable upon the exercise of this Warrant,
the Current Warrant Price and the number of shares purchasable upon exercise of
this Warrant shall be subject to adjustment from time to time upon the
occurrence of the following events:

         (a) Stock Splits, Subdivisions, Reclassifications and Combinations. If
at any time the Company shall (i) fix a record date for the holders of its
Common Shares for the purpose of entitling them to receive a dividend payable
in, or other distribution of, shares of Common Stock, (ii) subdivide or
reclassify its outstanding Common Shares into a larger number of Common Shares
or (iii) combine or reclassify its outstanding Common Shares into a smaller
number of Common Shares, then, (A) the number of Common Shares issuable upon
exercise of this Warrant immediately after the occurrence of any such event
shall be adjusted to equal the number of Common Shares which a holder of the
same number of Common Shares issuable upon exercise of this Warrant immediately
prior to the occurrence of such event would own or be entitled to receive after
the happening of such event and (B) the Current Warrant Price shall be adjusted
to equal the quotient determined by dividing (1) the product of (x) the Current
Warrant Price and (y) the number of Common Shares issuable upon exercise of this
Warrant immediately prior to the adjustment, by (2) the new number of shares
issuable upon exercise of this Warrant resulting from the adjustment made
pursuant to clause (A) above.

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         (b) Certain Other Distributions. If at any time the Company shall fix a
record date for the holders of its Common Shares for the purpose of entitling
them to receive any dividend or other distribution of (i) cash (other than
ordinary cash dividends), (ii) any evidence of indebtedness of the Company or
any subsidiary thereof, any shares of any Person or any other assets or property
of any nature whatsoever (other than Common Shares or Convertible Securities) or
(iii) any warrants or other rights to subscribe for or purchase any evidence of
indebtedness of the Company or any subsidiary thereof, any shares of any Person
or any other assets or property of any nature whatsoever (other than Common
Shares or Convertible Securities), then, in each such case, (A) the number of
Common Shares issuable upon exercise of this Warrant shall be increased to equal
the product of the number of Common Shares issuable upon exercise of this
Warrant immediately prior to such adjustment multiplied by a fraction, (x) the
numerator of which is the Market Price per Common Share on such record date and
(y) the denominator of which is such Market Price per Common Share minus the
amount of such cash (if any) and the fair market value (as reasonably determined
in good faith by the Board and supported by an opinion from an investment
banking firm of recognized national standing acceptable to the Holder) of any
and all such evidences of indebtedness, shares, other assets or property or
warrants or other subscription or purchase rights distributable to a holder of
one Common Share, and (B) the Current Warrant Price shall be reduced to equal
(x) the Current Warrant Price multiplied by the number of Common Shares issuable
upon exercise of this Warrant immediately prior to such adjustment divided by
(y) the new number of shares issuable upon exercise of this Warrant resulting
from the adjustment made pursuant to clause (A) above; provided, that if the
event requiring adjustment by this Section 5(b) would cause the Current Warrant
Price to be equal to or less than $0, no such adjustment shall be made and the
Company shall distribute to each Holder such cash, any and all evidences of
indebtedness, shares of stock, other securities or property or warrants or other
subscription or purchase rights that would be distributable to such Holder had
such Holder exercised this Warrant immediately prior to such distribution.

         (c) Issuance of Additional Common Shares. If at any time the Company
shall issue or sell any Additional Common Shares for consideration in an amount
per Additional Common Share less than the Market Price as of the day of such
issuance or sale, then (A) the number of shares of Common Stock for which this
Warrant is exercisable shall be increased to equal the product obtained by
multiplying the number of shares of Common Stock for which this Warrant is
exercisable immediately prior to such issuance or sale by a fraction (x) the
numerator of which shall be the number of shares of Common Stock outstanding
immediately after such issuance or sale and (y) the denominator of which shall
be the number of shares of Common Stock outstanding immediately prior to such
issuance or sale plus the number of shares which the aggregate offering price of
the total number of such Additional Common Shares would purchase at the Market
Price (on the last trading day immediately preceding such issuance or sale) and
(B) the Current Warrant Price shall be reduced to a price determined by
multiplying such Current Warrant Price by a fraction (x) the numerator of which
shall be the number of shares for which this Warrant is exercisable immediately
prior to such issue or sale and (y) the denominator of which shall be the number
of shares of Common Stock purchasable immediately after such issuance or sale.

         (d) Issuance of Warrants or Other Rights. If at any time the Company
shall fix a record date for the holders of its Common Shares for the purpose of
entitling them to receive a distribution of, or shall in any manner (whether
directly or by assumption in a merger in which the Company is the surviving
corporation) issue or sell, any warrants or other rights to subscribe for or

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purchase any Additional Common Shares or any Convertible Securities, whether or
not the rights to exchange or convert thereunder are immediately exercisable,
and the consideration received by the Company for any Additional Common Shares
issuable upon the exercise of such warrants or other rights or upon conversion
or exchange of such Convertible Securities shall be less than the Market Price
as of the day of such distribution, issuance or sale, then the Current Warrant
Price and the number of Common Shares issuable upon exercise of this Warrant
shall be adjusted as provided in Section 5(c) hereof on the basis that (i) the
maximum number of Additional Common Shares issuable pursuant to all such
warrants or other rights or necessary to effect the conversion or exchange of
all such Convertible Securities shall be deemed to have been issued and
outstanding and (ii) the Company shall have received all of the consideration,
if any, payable for such warrants or other rights as of the date of the actual
issuance thereof. No further adjustments of the Current Warrant Price or the
number of shares issuable upon exercise of this Warrant shall be made upon the
actual issuance of such Common Shares or of such Convertible Securities upon
exercise of such warrants or other rights or upon the actual issuance of such
Common Shares upon such conversion or exchange of such Convertible Securities.

         (e) Issuance of Convertible Securities. If at any time the Company
shall fix a record date for the holders of its Common Shares for the purpose of
entitling them to receive a distribution of, or shall in any manner (whether
directly or by assumption in a merger in which the Company is the surviving
corporation) issue or sell, any Convertible Securities, whether or not the
rights to exchange or convert thereunder are immediately exercisable, and the
consideration received by the Company for any Additional Common Shares issuable
upon the conversion or exchange of such Convertible Securities shall be less
than the Market Price as of the day of such distribution, issuance or sale, then
the Current Warrant Price and the number of Common Shares issuance upon exercise
of this Warrant shall be adjusted as provided in Section 5(c) hereof on the
basis that (i) the maximum number of Additional Common Shares issuable upon the
conversion or exchange of all such Convertible Securities shall be deemed to
have been issued and outstanding and (ii) the Company shall have received all of
the consideration, if any, payable for such Convertible Securities as of the
date of actual issuance of such Convertible Securities. No further adjustment of
the Current Warrant Price or the number of shares issuable upon exercise of this
Warrant shall be made under this Section 5(e) upon the issuance of any
Convertible Securities which are issued pursuant to the exercise of any warrants
or other subscription or purchase rights therefor, if any such adjustment shall
previously have been made upon the issuance of such warrants or other rights
pursuant to Section 5(d) hereof. No further adjustment of the Current Warrant
Price or the number of shares issuable upon exercise of this Warrant shall be
made upon the actual issuance of such Common Shares upon conversion or exchange
of such Convertible Securities and, if any issuance or sale of such Convertible
Securities is made upon exercise of any warrant or other right to subscribe for
or to purchase any such Convertible Securities for which adjustments thereof
have been or are to be made pursuant to other provisions of this Section 5, no
further adjustments shall be made by reason of such issuance or sale.

         (f) Superseding Adjustment. If, at any time after any adjustment of the
Current Warrant Price and the number of Common Shares issuable upon exercise of
this Warrant shall have been made pursuant to Section 5(d) or 5(e) hereof as the
result of any issuance of warrants, rights or Convertible Securities and either

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(i) such warrants or rights, or the right of conversion or exchange in such
other Convertible Securities, shall expire, and all or a portion of such
warrants or rights, or the right of conversion or exchange with respect to all
or a portion of such other Convertible Securities, as the case may be, shall not
have been exercised or (ii) the consideration per share for which Common Shares
are issuable pursuant to such warrants or rights, or such other Convertible
Securities, shall be increased or decreased by virtue of provisions therein
contained, then such previous adjustment shall be rescinded and annulled and the
Additional Common Shares which were deemed to have been issued by virtue of the
computation made in connection with the adjustment so rescinded and annulled
shall no longer be deemed to have been issued by virtue of such computation.
Thereupon, a recomputation shall be made of the effect of such warrants or
rights or other Convertible Securities on this Warrant on the basis of (x)
treating the number of Additional Common Shares or other property, if any,
theretofore actually issued or issuable pursuant to the previous exercise of any
such warrants or rights or any such right of conversion or exchange, as having
been issued on the date or dates of any such exercise and for the consideration
actually received and receivable therefor and (y) treating any such warrants or
rights or any such other Convertible Securities which then remain outstanding as
having been granted or issued immediately after the time of such increase or
decrease of the consideration per share for which Common Shares or other
property are issuable under such warrants or rights or other Convertible
Securities, whereupon a new adjustment of the Current Warrant Price and the
number of Common Shares issuable upon exercise of this Warrant shall be made
pursuant to Section 5(d) or 5(e) hereof, as appropriate, which new adjustment
shall supersede the previous adjustment so rescinded and annulled; provided,
however, that no rescission or recomputation adjustment shall be made under this
Section 5(f) in respect of any portion of this Warrant which has been exercised
prior to the occurrence of any action otherwise requiring such rescission or
recomputation adjustment.

         (g) Other Provisions Applicable to Adjustments Under this Section. The
following provisions shall be applicable to the making of adjustments provided
for in this Section 5:

                  (i) Computation of Consideration. To the extent that any
Additional Common Shares or any Convertible Securities or any warrants or other
rights to subscribe for or purchase any Additional Common Shares or any
Convertible Securities shall be issued for cash consideration, the consideration
received by the Company therefor shall be the amount of the cash received by the
Company therefor, or, if such Additional Common Shares or Convertible Securities
are offered by the Company for subscription, the subscription price, or, if such
Additional Common Shares or Convertible Securities are sold to underwriters or
dealers for public offering without a subscription offering, the public offering
price (in any such case subtracting (x) any amounts paid or receivable for
accrued interest or accrued dividends and (y) any compensation, discounts or
expenses paid or incurred by the Company for and in the underwriting of, or
otherwise in connection with, the issuance thereof). To the extent that such
issuance shall be for a consideration other than cash, then, except as herein
otherwise expressly provided, the amount of such consideration shall be deemed
to be the fair value of such consideration at the time of such issuance as
reasonably determined in good faith by the Board. In case any Additional Common
Shares or any Convertible Securities or any warrants or other rights to
subscribe for or purchase such Additional Common Shares or Convertible
Securities shall be issued in connection with any merger in which the Company
issues any securities, the amount of consideration therefor shall be deemed to
be the fair value, as reasonably determined in good faith by the Board, of such
portion of the assets and business of the nonsurviving corporation as such Board
in good faith shall reasonably determine to be attributable to such Additional
Common Shares, Convertible Securities, warrants or other rights, as the case may
be. The consideration for any Additional Common Shares issuable pursuant to any
warrants or other rights to subscribe for or purchase the same shall be the
consideration received by the Company for issuing such warrants or other rights
plus the lowest amount of additional consideration payable to the Company upon
exercise of such warrants or other rights. The consideration for any Additional
Common Shares issuable pursuant to the terms of any Convertible Securities shall
be the consideration, if any, received by the Company for issuing warrants or

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other rights to subscribe for or purchase such Convertible Securities, plus the
consideration paid or payable to the Company in respect of the subscription for
or purchase of such Convertible Securities, plus the lowest amount of additional
consideration, if any, payable to the Company upon the exercise of the right of
conversion or exchange in such Convertible Securities. In case of the issuance
at any time of any Additional Common Shares or Convertible Securities in payment
or satisfaction of any dividends upon any class of stock other than Common
Shares, the Company shall be deemed to have received for such Additional Common
Shares or Convertible Securities a consideration equal to the amount of such
dividend so paid or satisfied.

                  (ii) When Adjustments to be Made; Rounding of Calculations;
Minimum Adjustments. The adjustments required by this Section 5 shall be made
whenever and as often as any specified event requiring an adjustment shall
occur. All calculations under this Section 5 shall be made to the nearest
one-tenth (1/10th) of a cent or to the nearest one-hundredth (1/100th) of a
share, as the case may be. No adjustment in the Current Warrant Price or the
number of Common Shares into which this Warrant is exercisable is required if
the amount of such adjustment would be less than $0.01 or one-tenth (1/10th) of
a Common Share, as the case may be; provided, however, that any adjustments
which by reason of this Section 5(g)(ii) are not required to be made will be
carried forward and given effect upon the earlier of (x) the date of any
subsequent adjustment and (y) the date of exercise of this Warrant. For the
purpose of any adjustment, any specified event shall be deemed to have occurred
at the close of business on the date of its occurrence.

                  (iii) When Adjustment Not Required. If the Company shall take
a record of the holders of its Common Shares for the purpose of entitling them
to receive a dividend or distribution or subscription or purchase rights and
shall thereafter and before the distribution to shareholders thereof legally
abandon its plan to pay or deliver such dividend, distribution, subscription or
purchase rights, then, thereafter, no adjustment shall be required by reason of
the taking of such record and any such adjustment previously made in respect
thereof shall be rescinded and annulled.

                  (iv) Escrow of Warrant Stock. If after any property becomes
distributable pursuant to this Section 5 by reason of the taking of any record
of the holders of Common Shares, but prior to the occurrence of the event for
which such record is taken, the Holder exercises this Warrant, then any
Additional Common Shares issuable and other property distributable upon exercise
by reason of such adjustment shall be held in escrow for the Holder by the
Company to be issued and/or distributed to the Holder upon and to the extent
that the event actually takes place. Notwithstanding any other provision to the
contrary herein, if the event for which such record was taken fails to occur or
is rescinded, then such escrowed shares shall be cancelled by the Company and
escrowed property returned.

                  (v) Challenge to Good Faith Determination. Whenever the Board
shall be required to make a determination in good faith of the fair value of any
item under this Section 5, such determination may be challenged by the Holder,
and any dispute shall be resolved by an investment banking firm of recognized
national standing selected by the Company and acceptable to such Holder, with
all costs thereof borne by the Company.

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         (h) Corporate Transactions. In case of any Corporate Transaction or
reclassification of Common Shares (other than a reclassification of Common
Shares referred to in Section 5(a) hereof), any Common Shares issued or issuable
upon exercise of this Warrant after the date of such Corporate Transaction or
reclassification (or, in the case of a liquidation of assets or a dissolution,
upon such liquidation or dissolution, without taking any further action) will be
exchangeable for the number of shares of stock or other securities or property
(including cash) to which the Common Shares issuable (at the time of such
Corporate Transaction or reclassification) upon exercise of this Warrant
immediately prior to such Corporate Transaction or reclassification would have
been entitled upon such Corporate Transaction or reclassification; and in any
such case, if necessary, the provisions set forth herein with respect to the
rights and interests thereafter of the Holder shall be appropriately adjusted so
as to be applicable, as nearly as may reasonably be, to any shares of stock or
other securities or property thereafter deliverable on the exercise of this
Warrant. In determining the kind and amount of stock, securities or the property
receivable upon consummation of such Corporate Transaction or reclassification,
if the holders of Common Shares have the right to elect the kind or amount of
consideration receivable upon consummation of such Corporate Transaction or
reclassification, then the Holder shall have the right to make a similar
election upon exercise of this Warrant with respect to the number of shares of
stock or other securities or property which the Holder will receive upon
exercise of this Warrant (or, in the case of a liquidation of assets or a
dissolution, upon such liquidation or dissolution, without taking any further
action). The foregoing provisions of this Section 5(h) shall similarly apply to
successive Corporate Transactions or such reclassifications.

         (i) Other Action Affecting Common Shares. If at any time or from time
to time the Company shall take any action in respect of its Common Shares, other
than any action described in this Section 5 for which a specific adjustment is
provided, then, unless such action will not have a materially adverse effect
upon the rights of the Holder, the number of Common Shares or other stock
issuable upon exercise of this Warrant and/or the Current Warrant Price shall be
adjusted in such manner as may be equitable in the circumstances.

         6. Notice of Adjustments.

         Whenever the Current Warrant Price or the number of Common Shares or
the class or type of stock or other property issuable upon exercise of this
Warrant shall be adjusted pursuant to Section 5 hereof, the Company shall
prepare a certificate signed by its chief financial officer setting forth, in
reasonable detail, the event requiring the adjustment, the amount of the
adjustment, the method by which such adjustment was calculated (including a
description of the basis on which the Board determined the fair value of any
evidences of indebtedness, shares of stock, other securities or property or
warrants or other subscription or purchase rights referred to in Section 5(b) or
5(g)(i) hereof), the Current Warrant Price after giving effect to such
adjustment and the number of shares then issuable upon exercise of this Warrant
and (if such adjustment was made pursuant to Section 5(h) or 5(i) hereof)
describing the number and kind of any other shares of stock or other property
issuable upon exercise of this Warrant, and shall cause copies of such
certificate to be mailed (by first class mail, postage prepaid) to the Holder of
this Warrant at the address specified in Section 15(c) hereof, or at such other
address as may be provided to the Company in writing by the Holder. The Company
shall keep at its principal office copies of all such certificates and cause the
same to be available for inspection at said office during normal business hours
by the Holder or any prospective purchaser of a Warrant designated by the
Holder. The Holder shall be entitled to the same rights to receive notice of
corporate action as any holder of Common Shares.

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         7. Fractional Shares.

         No fractional shares of Common Stock will be issued in conjunction with
any exercise hereunder, but in lieu of such fractional shares the Company shall
make a cash payment therefore on the basis of the Market Price then in effect.

         8. Compliance with Securities Act.

         The Holder of this Warrant, by acceptance hereof, agrees that this
Warrant and the shares of Common Stock to be issued on exercise hereof are being
acquired for investment and that it will not offer, sell or otherwise dispose of
this Warrant or any shares of Common Stock to be issued upon exercise hereof
except under circumstances which will not result in a violation of the
Securities Act of 1933, as amended (the "Act"). This Warrant and all shares of
Common Stock issued upon exercise of this Warrant shall be stamped and imprinted
with a legend substantially in the following form, unless sold pursuant to an
effective registration statement:

         "THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
         1933, AS AMENDED (THE "ACT"), OR APPLICABLE STATE SECURITIES LAWS AND
         MAY NOT BE TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS REGISTERED UNDER
         THE ACT AND SUCH LAWS OR REGISTRATION UNDER THE ACT AND SUCH LAWS IS
         NOT REQUIRED."

         The foregoing legend shall be removed from the certificates
representing the Warrant and any shares of Common Stock issued upon exercise of
the Warrant, at the request of the holder thereof, at such time as (i) they are
sold pursuant to an effective registration statement, (ii) they become eligible
for resale pursuant to Rule 144(k) or another provision of Rule 144 of the Act
pursuant to which all or a portion of the Shares could be sold in a single
transaction or (iii) an opinion of counsel is obtained to the effect that the
proposed transfer is exempt from the Act.

         9. Transfer and Exchange of Warrant.

         This Warrant may be transferred or exchanged without the consent of the
Company upon the Holder providing to the Company a written opinion by counsel
reasonably satisfactory to the Company opining that the transfer or exchange
will not violate any Federal or applicable state securities laws; provided,
however, that no such opinion shall be required in connection with a transfer
from any affiliate (within the meaning of Rule 405 under the Act) of IDT
Corporation to IDT Corporation or any other affiliate thereof or from IDT
Corporation to any affiliate thereof.

         10. Registration Rights.

         The Holder shall be entitled to certain registration rights with
respect to the shares of Common Stock issuable upon exercise of this Warrant as
set forth in that certain Securities Purchase Agreement, dated as of the date
hereof, by and between the Company and the original Holder hereof.

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         11. Rule 144 Information.

         The Company covenants that it will file the reports required to be
filed by it under the Act and the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated thereunder (or, if the Company is not
required to file such reports, it will, upon the request of any Holder, make
publicly available such information as is described in Rule 144(c)(2) under the
Act). Upon the request of any Holder, the Company will deliver to such Holder a
written statement that it has complied with such requirements.

         12. Merger or Consolidation of the Company.

         The Company shall not merge or consolidate into, or sell, transfer or
lease all or substantially all of its property to, any other Person unless the
successor, transferee or lessee corporation or other Person, as the case may be
(if not the Company), (a) expressly assumes the due and punctual performance and
observance of each and every covenant and condition of this Warrant to be
performed and observed by the Company and (b) expressly agrees to exchange, at
the Holder's option, this Warrant for a warrant or warrants for such surviving
corporation's or other Person's shares of capital stock on terms substantially
similar to the terms under this Warrant.

         13. Indemnification.

         The Company agrees to indemnify and hold harmless the Holder, its
officers, directors, employees, partners, agents and attorneys from and against
any liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, claims, costs, attorneys' fees, expenses and disbursements of any kind
which may be imposed upon, incurred by or asserted against the Holder in any
manner relating to or arising out of (a) the Holder's exercise of this Warrant
and/or ownership of any shares of Common Stock issued in consequence thereof or
(b) any litigation to which the Holder is made a party in its capacity as a
shareholder or warrantholder of the Company; provided, however, that the Company
shall not be liable hereunder to the extent that any liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, claims, costs, attorneys'
fees, expenses or disbursements are found in a final non-appealable judgment by
a court to have resulted from the Holder's gross negligence or willful
misconduct in its capacity as a shareholder or warrantholder of the Company.

         14. No Impairment.

         The Company shall not, by any action, including, without limitation,
amending its certificate of incorporation or through any reorganization,
transfer of assets, consolidation, merger, dissolution, issuance or sale of
securities or any other voluntary action, avoid or seek to avoid the observance
or performance of any of the terms of this Warrant, but shall at all times in
good faith assist in the carrying out of all such terms and in the taking of all
such actions as may be necessary or appropriate in order to protect the rights
of the Holder against impairment.

                                      -10-
<PAGE>

         15. Miscellaneous.

         (a) No Rights as Shareholder. The Holder of this Warrant shall not be
entitled to vote or receive dividends or be deemed the Holder of Common Stock or
any other securities of the Company that may at any time be issuable on the
exercise hereof for any purpose, nor shall anything contained herein be
construed to confer upon the Holder of this Warrant, as such, any of the rights
of a shareholder of the Company or any right to vote for the election of
directors or upon any matter submitted to shareholders at any meeting thereof,
or to give or withhold consent to any corporate action (whether upon any
recapitalization, issuance of stock, reclassification of stock, change of par
value or change of stock to no par value, consolidation, merger, conveyance or
otherwise) or to receive notice of meetings, or to receive dividends or
subscription rights or otherwise until the Warrant shall have been exercised and
the shares purchasable upon the exercise hereof shall have become deliverable,
as provided herein.

         (b) Replacement. On receipt of evidence reasonably satisfactory to the
Company of the loss, theft, destruction, or mutilation of this Warrant and, in
the case of mutilation, on surrender and cancellation of this Warrant, the
Company, at the Holder's expense (it being understood that any such expense must
be reasonable), will execute and deliver, in lieu of this Warrant, a new Warrant
of like tenor.

         (c) Notice. Any notice given to either party under this Warrant shall
be in writing, and any notice hereunder shall be deemed to have been given upon
the earlier of delivery thereof by hand delivery, by courier, or by standard
form of telecommunication or three (3) business days after the mailing thereof
in the U.S. mail if sent registered mail with postage prepaid, addressed to the
Company at its principal executive offices and to the Holder at its address set
forth in the Company's books and records or at such other address as the Holder
may have provided to the Company in writing.

         (d) GOVERNING LAW. THIS WARRANT SHALL BE GOVERNED AND CONSTRUED UNDER
THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO THE CONFLICTS OF
LAWS PRINCIPLES THEREOF.

         (e) Amendments. This Warrant may be amended, and the observance of any
term of this Warrant may be waived (either generally or in a particular instance
and either retroactively or prospectively), only with the written consent of
each of the Company and the Holder.

         (f) Successors and Assigns. Subject to the provisions of Section 9
hereof, (i) this Warrant and the rights evidenced hereby shall inure to the
benefit of and be binding upon the successors of the Company and the successors
and assigns of the Holder and (ii) the provisions of this Warrant are intended
to be for the benefit of all Holders from time to time of this Warrant, and
shall be enforceable by any such Holder.

                                      -11-
<PAGE>

NYK 865878-2.055771.0043
This Warrant is dated as of the ____ day of _____________, 2003.

                                    DOCUMENT SECURITY SYSTEMS, INC.

                                    By:__________________________________
                                          Name:
                                          Title:

                                      -12-
<PAGE>

                                    EXHIBIT 1

                           FORM OF NOTICE OF EXERCISE

TO:      DOCUMENT SECURITY SYSTEMS, INC.

1. The undersigned hereby elects to purchase __________ shares of Common Stock
of DOCUMENT SECURITY SYSTEMS, INC. pursuant to the terms of the attached
Warrant, and tenders herewith payment of the purchase price of such shares in
the following manner:

         Method(s) of Payment of aggregate Current Warrant Price: ______________

         -----------------------------------------------------------------------

2. Please issue a certificate or certificates representing said shares of Common
Stock in the name of the undersigned or in such other name as is specified
below:

                  ------------------------------------
                           (Name)
                  ------------------------------------
                           (Address)
                  ------------------------------------

                                                   -----------------------------
                                                     Signature

<PAGE>EXHIBIT 10.20

                          SECURITIES PURCHASE AGREEMENT

         SECURITIES PURCHASE AGREEMENT (this "Agreement"), dated as of _________
___, 2003, between Document Security Systems, Inc., a New York corporation (the
"Company"), and IDT Venture Capital Corporation, a Delaware corporation (the
"Investor").

         WHEREAS, the Investor desires to purchase shares of common stock, par
value $0.02 per share, of the Company (the "Common Stock"), and the Company
desires to issue and sell shares of Common Stock to the Investor, upon the terms
and subject to the conditions set forth in this Agreement; and

         WHEREAS, the Investor desires to purchase a warrant to acquire shares
of Common Stock attached hereto as Exhibit A (the "Warrant"), and the Company
desires to issue and sell the Warrant to the Investor, upon the terms and
subject to the conditions set forth in this Agreement.

         NOW, THEREFORE, the Company and the Investor hereby agree as follows:

         Section 1. Sale and Purchase.

         1.1 Sale and Purchase of Common Stock and the Warrant; Purchase Price.
The Company hereby agrees to issue and sell, and the Investor hereby agrees to
purchase from the Company, 100,000 shares of Common Stock (the "Shares") and the
Warrant (together with the Shares, the "Investor Securities") for an aggregate
purchase price consisting of certain legal and other expenses which have been
incurred by the Investor, its parent, IDT Corporation ("IDT"), and/or any
affiliates (within the meaning of Rule 405 of the Securities and Exchange
Commission (the "SEC") under the Securities Act of 1933, as amended (the "Act"))
of IDT on behalf of the Company (the "Purchase Price"). The Company hereby
acknowledges receipt of (and the adequacy and sufficiency of) the Purchase
Price.

         1.2 Issuance of the Shares and the Warrant. Simultaneously herewith,
the Company is issuing and delivering to the Investor a share certificate or
certificates representing the Shares and an original executed Warrant, which
certificate or certificates and Warrant shall be registered in the Investor's
name.

         Section 2. Representations, Warranties and Acknowledgments of the
Investor. The Investor hereby represents, warrants and acknowledges to the
Company as follows:

         2.1 No Registration of Investor Securities. The Investor is aware that
the Investor Securities (and the shares of Common Stock issuable upon exercise
of the Warrant (the "Warrant Shares")) have not been registered under the Act,
that such offer and sale are intended to be exempt from registration under the
Act and the rules promulgated thereunder by the SEC, and that the Investor
Securities (and the Warrant Shares) cannot be offered, sold, assigned,
transferred or otherwise disposed of unless they are subsequently registered
under the Act or an exemption from such registration is available. The Investor
is also aware that sales or transfers of the Investor Securities (and the
Warrant Shares) are further restricted by state securities laws and that the
Warrant and certificates evidencing the Shares will bear appropriate legends
restricting their transfer pursuant to applicable laws.

<PAGE>

         2.2 Suitability of Investment. (a) The Investor is an "accredited
investor" within the meaning of Rule 501 of Regulation D of the Act as presently
in effect and is acquiring the Investor Securities for its own account, or for
the account of another "accredited investor" who is an affiliate of the
Investor, for investment purposes only and not with a view to the resale or
distribution thereof;

         (b) The Investor has such knowledge and experience in financial or
business matters that it can, and it has, adequately analyzed the risks of an
investment in the Investor Securities (and the Warrant Shares) and it has
determined that the Investor Securities (and the Warrant Shares) are a suitable
investment for the Investor and that the Investor is able to bear the economic
risk of a total loss of its investment in the Company; and

         (c) The Investor is aware that there are substantial risks incident to
an investment in the Investor Securities (and the Warrant Shares).

         2.3 Corporate Authority. The Investor has all requisite corporate power
and authority and has taken all corporate and other action necessary in order to
execute, deliver and perform its obligations under the applicable provisions of
this Agreement. This Agreement is a valid and binding agreement of the Investor,
enforceable against it in accordance with its respective terms, subject to
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
similar laws of general applicability relating to or affecting creditors' rights
and to general equity principles.

         Section 3. Representations, Warranties and Acknowledgments of the
Company. The Company hereby represents, warrants and acknowledges to the
Investor as follows:

         3.1 Organization, Good Standing, Qualification and Investment Company.
(a) Each of the Company and its subsidiaries (as defined by Rule 405 under the
Act) (each a "Company Subsidiary") is a corporation duly organized, validly
existing and in good standing under the laws of its respective jurisdiction of
organization and has all requisite corporate or similar power and authority to
own, lease and operate its properties and assets and to carry on its business as
currently conducted. Each of the Company and each Company Subsidiary is duly
qualified to do business and is in good standing as a foreign corporation in
each jurisdiction where the ownership, lease or operation of its assets or
properties or conduct of its business requires such qualification, except where
the failure to be so qualified or in good standing, when taken together with all
other such failures, would not have a Company Material Adverse Effect (as
defined below).

         As used in this Agreement, the term "Company Material Adverse Effect"
means a material adverse effect on the condition, properties, prospects, assets,
business or operations of the Company and its subsidiaries taken as a whole.

         (b) All of the outstanding shares of capital stock of each Company
Subsidiary beneficially owned by the Company have been validly issued and are
fully paid and nonassessable and are so owned free and clear of any mortgage,
pledge, lien, security interest, claim, restriction, charge or encumbrance of
any kind ("Lien").

                                      -2-
<PAGE>

         3.2 Corporate Authority. The Company has all requisite corporate power
and authority and has taken all corporate action necessary in order to execute,
deliver and perform its obligations under this Agreement and the Warrant and to
consummate the transactions contemplated hereby and thereby (the
"Transactions"). The Company has duly executed and delivered this Agreement and
the Warrant. Each of this Agreement and the Warrant is a legal, valid and
binding agreement of the Company enforceable against the Company in accordance
with its terms, subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability relating to
or affecting creditors' rights and to general equity principles.

         3.3 Capital Structure. (a) The authorized capital stock of the Company
consists solely of 200,000,000 shares of Common Stock, of which 9,309,818 shares
are outstanding. All of the outstanding shares of Common Stock have been duly
authorized and are validly issued, fully paid and nonassessable. The Investor
Securities have been duly authorized and the Shares have been validly issued,
fully paid and nonassessable, and the issuance of the Shares and the Warrant
have not been subject to any preemptive rights or made in violation of any
Applicable Law.

         The term "Applicable Law" for purposes of this Agreement means (a) any
foreign, United States Federal, state or local law, statute, rule, regulation,
order, writ, injunction, judgment, decree or permit of any governmental or
regulatory authority, agency, commission, body or other governmental entity or
court ("Governmental Entity") and (b) any rule or listing requirement of any
applicable national stock exchange or association or listing requirement of any
national stock exchange or association or SEC recognized trading market on which
securities issued by the Company are listed or quoted.

         (b) Except as set forth in the Company Reports (as defined below),
there are (i) no outstanding options, warrants, agreements, conversion rights,
exchange rights, preemptive rights or other rights (whether contingent or not)
to subscribe for, purchase or acquire any issued or unissued shares of capital
stock of the Company or any Company Subsidiary, (ii) no authorized or
outstanding stock appreciation, phantom stock, profit participation, or similar
rights with respect to the Company or any Company Subsidiary, (iii) no rights,
contracts, commitments or arrangements (contingent or otherwise) obligating the
Company or any Company Subsidiary to either (A) redeem, purchase or otherwise
acquire, or offer to purchase, redeem, or otherwise acquire, any outstanding
shares of, or any outstanding warrants or rights of any kind to acquire any
shares of, or any outstanding securities that are convertible into or
exchangeable for any shares of, capital stock of the Company or (B) pay any
dividend or make any distribution in respect of any shares of, or any
outstanding securities that are convertible or exchangeable for any shares of,
capital stock of the Company, (iv) no agreements or arrangements under which the
Company or any Company Subsidiary is obligated to register the sale of any of
its securities under the Act (except as provided hereunder) and (v) no
restrictions upon, or Contracts (as defined in Section 3.4(a)) or understandings
of the Company or any subsidiary of the Company, or, to the knowledge of the
Company, Contracts or understandings of any other Person, with respect to, the
voting or transfer of any shares of capital stock of the Company or any Company
Subsidiary. Except as set forth in the Company Reports, there are no securities
or instruments containing antidilution or similar provisions that will be
triggered by the consummation of the Transactions. Except as set forth in the
Company Reports, no party has any right of first refusal, right of first offer,
right of co-sale or other similar right regarding the Company's securities. As
used in this Agreement, the term "Person" means any individual, partnership,
corporation, limited liability company, joint venture, association, joint-stock
company trust, unincorporated organization, government or agency or political
subdivision thereof, or other entity.

                                      -3-
<PAGE>

         (c) The Warrant Shares have been duly authorized and adequately
reserved in contemplation of the exercise of the Warrant, and, when issued and
delivered in accordance with the terms of the Warrant, will be validly issued
and fully paid and nonassessable, and the issuance thereof will not have been
subject to any preemptive rights or made in violation of any Applicable Law.

         3.4 No Violation; Consents. (a) Subject to any filings referred to in
Section 3.4(b), the execution, delivery and performance by the Company of this
Agreement and the Warrant and the consummation by the Company of the
Transactions do not and will not, directly or indirectly (with or without
notice, lapse of time or both), contravene any Applicable Law. The execution,
delivery and performance by the Company of this Agreement and the Warrant and
the consummation of the Transactions do not and will not, directly or indirectly
(with or without notice, lapse of time or both), constitute or result in (i) a
breach or violation of, or a default under, the acceleration of any obligations,
any party obtaining the right to exercise any remedy under, or the creation of a
Lien on or with respect to any assets owned or used by the Company or any
Company Subsidiary pursuant to, any agreement, lease, license, contract, note,
mortgage, indenture, arrangement or other obligation ("Contracts") to which the
Company or any Company Subsidiary is a party or by which the Company or any
Company Subsidiary is bound or to which any of their respective assets is
subject or any law or governmental or non-governmental permit or license to
which the Company or any Company Subsidiary is subject, (ii) any change in the
rights or obligations of any party under any of such Contracts or (iii) a breach
or violation of, or a default under, the certificate of incorporation or by-laws
of the Company or any Company Subsidiary currently in effect or any resolution
adopted by the board of directors or the stockholders of the Company or any
Company Subsidiary.

         (b) Except for applicable filings, if any, required by applicable
federal and state securities laws, which, in each case, are not required to be
made on or prior to the date hereof (and which shall be made in a timely manner
by the Company), no consent, authorization or order of, or filing or
registration with, any Governmental Entity or other Person is required to be
obtained or made by the Company or the Company Subsidiaries for the execution
and delivery of this Agreement or the Warrant or the consummation by the Company
of the Transactions.

         3.5 Company Reports; Financial Statements. (a) The Company has filed
all reports, registration statements and other filings, together with any
amendments or supplements required to be made with respect thereto, that it has
been required to file with the SEC under the Act and the Securities Exchange Act
of 1934, as amended (the "1934 Act"). As of the respective dates of their filing
with the SEC (and, with respect to registration statements, as of their
respective effective dates), the Company Reports complied in all respects with
the applicable provisions of the Act and the 1934 Act and the rules and
regulations of the SEC thereunder and did not contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements made therein, in the light of the circumstances

                                      -4-
<PAGE>

under which they were made, not misleading. All reports, registration statements
and other filings filed by the Company with the SEC since January 1, 2002
(including exhibits and any amendments thereto and documents incorporated by
reference therein) are referred to in this Agreement as the "Company Reports."

         (b) Each of the consolidated balance sheets included in or incorporated
by reference into the Company Reports (including the related notes and
schedules) fairly presents the consolidated financial position of the Company
and its subsidiaries as of the date of such balance sheet and each of the
consolidated statements of income, changes in stockholders' equity, and cash
flows included in or incorporated by reference into the Company Reports
(including any related notes and schedules) fairly presents the results of
operations, cash flows, and changes in stockholders' equity, as the case may be,
of the Company and its subsidiaries for the periods set forth in such statements
(subject, in the case of unaudited statements, to notes and normal and recurring
year-end audit adjustments that are not and will not be material in amount or
effect), all in accordance with generally accepted accounting principles
consistently applied during the periods involved ("GAAP"), and in each case, has
been prepared in accordance with GAAP, except as may be noted therein, and in
compliance in all respects with the rules and regulations of the SEC.

         3.6 Absence of Certain Changes. Except as disclosed in the Company
Reports filed and publicly available prior to the date hereof, since June 30,
2003, there has not been any event or occurrence or any change in the financial
condition, properties, prospects, business or results of operations of the
Company that has had or may result in a Company Material Adverse Effect.

         3.7 Compliance with Laws. Except as set forth in the Company Reports
filed and publicly available prior to the date hereof, the business of the
Company has not been, and is not being, conducted in violation of any Federal,
state, local or foreign law, statute, ordinance, rule, regulation, judgment,
order, injunction, decree, arbitration award, agency requirement, license or
permit of any Governmental Entity, except for violations or possible violations
that, individually or in the aggregate, would not be reasonably expected to have
a Company Material Adverse Effect or prevent or materially burden or materially
impair the ability of the Company to consummate the Transactions. Except as set
forth in the Company Reports filed and publicly available prior to the date
hereof, no investigation or review by any Governmental Entity with respect to
the Company or the Company Subsidiaries is pending or, to the knowledge of the
executive officers of the Company, threatened, nor has any Governmental Entity
indicated an intention to conduct the same, except for those the outcome of
which are not, individually or in the aggregate, reasonably likely to have a
Company Material Adverse Effect or prevent or materially burden or materially
impair the ability of the Company to consummate the Transactions.

         3.8 Private Offering. Based, in part, on the Investor's representations
in Section 2, the offer and sale of the Investor Securities (and the Warrant
Shares) are exempt from the registration and prospectus delivery requirements of
the Act. Neither the Company, nor anyone acting on behalf of it, has offered or
sold or will offer or sell any securities, or has taken or will take any other
action (including, without limitation, any offering of any securities of the
Company under circumstances that would require, under the Act, the integration
of such offering with the offering and sale of the Investor Securities (or the
Warrant Shares)), that would subject the issuance of the Investor Securities (or
the Warrant Shares) to the registration provisions of the Act.

                                      -5-
<PAGE>

         3.9 Litigation. Except as disclosed in the Company Reports filed and
publicly available prior to the date hereof, there are not any (a) outstanding
judgments against or affecting the Company or any of the Company Subsidiaries or
(b) Proceedings pending or, to the knowledge of the Company, threatened against
or affecting the Company or any of the Company Subsidiaries that (i) in any
manner challenge or seek to prevent, enjoin, alter or materially delay the
Transactions or (ii) if resolved adversely to the Company or any Company
Subsidiary, would have, individually or in the aggregate, a Company Material
Adverse Effect.

         For purposes of this Agreement, "Proceeding" means any action,
arbitration, audit, hearing, investigation, litigation or suit (whether civil,
criminal, administrative, investigative or informal).

         3.10 Permits and Licenses. The Company and the Company Subsidiaries
have obtained all governmental permits, licenses, franchises and authorizations
required for the Company and its subsidiaries to conduct their respective
businesses as currently conducted, except for those the failure of which to be
obtained would not have a Material Adverse Effect.

         3.11 Intellectual Property, etc. The Company and the Company
Subsidiaries have taken all reasonable efforts to ensure that they have, and
have no reason to believe that they do not have, all right, title and interest
in, or a valid and binding license to use, all Company Intellectual Property (as
defined below). The Company and the Company Subsidiaries (i) have not defaulted
in any material respect under any license to use any Company Intellectual
Property, (ii) are not the subject of any Proceeding for infringement of any
third party intellectual property, (iii) have no knowledge of circumstances that
would be reasonably expected to give rise to any such Proceeding and (iv) have
no knowledge of circumstances that are causing or would be reasonably expected
to cause the loss or impairment of any Company Intellectual Property, other than
a default, Proceeding, loss or impairment that is not having or would not be
reasonably expected to have, individually or in the aggregate, a Company
Material Adverse Effect

         For purposes of this Agreement, "Company Intellectual Property" means
patents and patent rights, trademarks and trademark rights, tradenames and
tradename rights, service marks and service mark rights, copyrights and
copyright rights, trade secret and trade secret rights, and other intellectual
property rights, and all pending applications for and registrations of any of
the foregoing that are used in the conduct of the business of the Company or the
Company Subsidiaries as presently conducted.

         Section 4. Registration Rights. If at any time the Company proposes to
file a registration statement under the Act with respect to a public offering of
shares of Common Stock (which, for purposes of this Section 4, shall be deemed
to include any stock into which Common Stock shall have been changed or any
stock resulting from any combination of shares, recapitalization,
reorganization, merger, consolidation, sale of assets or reclassification) for
its own account (other than a registration statement (i) on Form S-8 or any
successor form thereto, (ii) filed solely in connection with a dividend

                                      -6-
<PAGE>

reinvestment plan or employee benefit plan covering officers or directors of the
Company or its affiliates (within the meaning of Rule 405 of the SEC under the
Act) or (iii) on Form S-4 or any successor form thereto, in connection with a
merger, acquisition, exchange offer or similar corporate transaction) or for the
account of any holder of shares of Common Stock, then the Company shall give
written notice of such proposed filing to the Investor (and IDT) at least forty
(40) days before the anticipated filing date. Such notice shall offer the
Investor the opportunity to register all or any portion of the Shares and the
Warrant Shares (collectively, with any other securities issued and issuable with
respect to any such Shares or Warrant Shares by way of a stock dividend, stock
distribution or stock split or in connection with a combination of shares,
recapitalization, reorganization, merger, consolidation, sale of assets or
reclassification, the "Registrable Shares") as they may request (a "Piggyback
Registration"). The Company shall include in each such Piggyback Registration
all Registrable Shares with respect to which the Company has received a written
request for inclusion therein within thirty (30) days after such notice has been
given to the Investor (and IDT). The Investor shall be permitted to withdraw all
or any portion of the Registrable Shares from a Piggyback Registration at any
time prior to the effective date of such Piggyback Registration. The Investor
shall be entitled to an unlimited number of Piggyback Registrations. The Company
shall permit the Investor to include all the Registrable Shares on the same
terms and conditions as any similar securities, if any, of the Company included
therein. The registration rights set forth in this Section 4 are transferable to
any transferee or purchaser of the Registrable Shares and/or the Warrant.

         Section 5. Transfer Limitations: 1933 Act Legend.

         5.1 Unless sold pursuant to an effective registration statement, each
certificate representing the Shares shall bear a legend substantially in the
following form:

         "THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), AND MAY
NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED UNLESS
AND UNTIL SUCH SHARES ARE REGISTERED UNDER THE ACT OR, EXCEPT AS OTHERWISE
PERMITTED PURSUANT TO RULE 144 UNDER THE ACT OR ANOTHER EXEMPTION FROM
REGISTRATION UNDER THE ACT."

         5.2 The foregoing legend shall be removed from the certificates
representing any shares of Common Stock, at the request of the holder thereof,
at such time as (i) they are sold pursuant to an effective registration
statement, (ii) they become eligible for resale pursuant to Rule 144(k) or
another provision of Rule 144 of the Act pursuant to which all or a portion of
the Shares could be sold in a single transaction or (iii) an opinion of counsel
is obtained to the effect that the proposed transfer is exempt from the Act.

         Section 6. Miscellaneous.

         6.1 Survival of Representations, Warranties and Covenants. All
representations, warranties, covenants and obligations in this Agreement shall
survive indefinitely.

                                      -7-
<PAGE>

         6.2 Successors and Assigns. This Agreement may not be assigned by the
Investor or the Company without the prior written consent of the other party
hereto and any attempted or purported assignment shall be void; provided,
however, that the Investor may, without the written consent of the Company,
assign its rights and obligations hereunder to any of its affiliates (within the
meaning of Rule 405 of the SEC under the Act). Nothing in this Agreement,
express or implied, is intended to confer upon any party, other than the parties
hereto or their respective successors and permitted assigns, any rights,
remedies, obligations or liabilities under or by reason of this Agreement,
except as expressly provided in this Agreement.

         6.3 Governing Law; Submission to Jurisdiction. This Agreement shall be
governed by and construed in accordance with the internal laws of the State of
New York, without giving effect to the conflicts of laws principles thereof.
Each of the Company and the Investor hereby submits to the exclusive
jurisdiction of the United States District Court for the Southern District of
New York and of any New York State court sitting in New York City for purposes
of all legal proceedings arising out of or relating to this Agreement and the
transactions contemplated hereby. Each of the Company and the Investor
irrevocably waives, to the fullest extent permitted by law, any objection which
it may now or hereafter have to the laying of the venue of any such proceeding
brought in such a court and any claim that any such proceeding brought in such a
court has been brought in an inconvenient forum.

         6.4 Counterparts. This Agreement may be executed in counterparts, each
of which shall be deemed an original, and all of which together shall be deemed
to constitute one and the same instrument.

         6.5 Captions and Headings. The captions and headings used in this
Agreement are for convenience only and are not to be considered in construing or
interpreting this Agreement.

         6.6 Notices. Unless otherwise provided, any notice or other
communication required or permitted to be given or effected under this Agreement
shall be in writing and shall be deemed effective upon personal delivery to the
party to be notified or one business day after deposit with an internationally
recognized courier service, delivery fees prepaid, or three business days after
the deposit with the U.S. mail, return receipt requested, postage prepaid, and
in each case, addressed to the party to be notified at the following respective
addresses, or at such other addresses as may be designated by written notice;
provided that any notice of change of address shall be deemed effective only
upon receipt:

                                      -8-
<PAGE>

     If to the Company, to it at:

         36 West Main Street
         Suite 710
         Rochester, New York 14614
         Attn:  Chief Executive Officer

     If to the Investor, to it at:

         520 Broad Street
         Newark, New Jersey 07102
         Attn:  Chief Executive Officer

     with copies to:

         IDT Corporation
         520 Broad Street
         Newark, New Jersey 07102
         Attn:  Chief Executive Officer

     and

         McDermott, Will & Emery
         50 Rockefeller Plaza
         New York, New York  10020-1605
         Attn:  Mark S. Selinger, Esq.

         6.7 Amendments and Waivers. All terms of this Agreement may be amended,
and the observance of any term of this Agreement may be waived (either generally
or in a particular instance and either retroactively or prospectively), only
with the written consent of each of the Company and the Investor. Any amendment
or waiver effected in accordance with this Section 6.7 shall be binding upon all
of the parties to this Agreement.

         6.8 Severability. If one or more provisions of this Agreement are held
to be invalid or unenforceable under applicable law, such provisions shall be
excluded from this Agreement and the balance of this Agreement shall be
interpreted as if such provisions were so excluded and shall be valid and
enforceable in accordance with its terms. Any provision of this Agreement held
invalid or unenforceable only in part or degree will remain valid and
enforceable to the extent not held invalid or unenforceable.

         6.9 Entire Agreement. This Agreement and the Warrant (and the schedules
and exhibits hereto and thereto, if any) constitute the entire agreement among
the parties with respect to the subject matter hereof and thereof and supersede
all prior agreements, understandings and discussions between them.

         6.10 Specific Enforcement. The parties hereto agree that irreparable
harm would occur in the event that any of the provisions of this Agreement were
not performed in accordance with its specific terms or were otherwise breached.
It is accordingly agreed that the parties shall be entitled to an injunction or
injunctions to prevent breaches of this Agreement and to enforce specifically
the terms and provisions hereof, this being in addition to any other remedy to
which they are entitled at law or in equity.

                                      -9-
<PAGE>

         6.11 Expenses. All costs and expenses incurred in connection with this
Agreement shall be paid by the party incurring such cost or expense.

         6.12 WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES ITS RIGHTS
TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF
THIS AGREEMENT. THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL-ENCOMPASSING OF
ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT AND THAT RELATE TO THE
SUBJECT MATTER OF THIS TRANSACTION, INCLUDING, WITHOUT LIMITATION, CONTRACT
CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW AND
STATUTORY CLAIMS. THIS SECTION 6.12 HAS BEEN FULLY DISCUSSED BY EACH OF THE
PARTIES HERETO AND THESE PROVISIONS SHALL NOT BE SUBJECT TO ANY EXCEPTIONS. EACH
PARTY HERETO HEREBY FURTHER WARRANTS AND REPRESENTS THAT SUCH PARTY HAS REVIEWED
THIS WAIVER WITH ITS LEGAL COUNSEL, AND THAT SUCH PARTY KNOWINGLY AND
VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL
COUNSEL. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER
ORALLY OR IN WRITING, AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
SUPPLEMENTS OR MODIFICATIONS TO (OR ASSIGNMENTS OF) THIS AGREEMENT. IN THE EVENT
OF LITIGATION, THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL
(WITHOUT A JURY) BY THE COURT.

         6.13 The parties agree (a) to furnish upon request to each other such
further information, (b) to execute and deliver to each other such other
documents and (c) to do such other acts and things, all as the other party may
reasonably request for the purpose of carrying out the intent of this Agreement
and any other documents referred to in this Agreement.

                       [Signatures on the following page.]

                                      -10-
<PAGE>

         IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.

                                DOCUMENT SECURITY SYSTEMS, INC.

                                By:__________________________________
                                    Name:
                                    Title:

                                IDT VENTURE CAPITAL CORPORATION

                                By:__________________________________
                                    Name:
                                    Title:

                                      -11-
<PAGE>

                                    Exhibit A

                          Common Stock Purchase Warrant

<PAGE>

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