Document:

THESE
SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”) OR UNDER THE SECURITIES
LAWS OF ANY STATE OR JURISDICTION AND MAY NOT BE SOLD, OFFERED FOR SALE OR OTHERWISE TRANSFERRED UNLESS REGISTERED OR QUALIFIED
UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS OR UNLESS THE COMPANY RECEIVES AN OPINION, IN REASONABLY ACCEPTABLE FORM AND
SCOPE, OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY, THAT REGISTRATION, QUALIFICATION OR OTHER SUCH ACTIONS ARE NOT REQUIRED
UNDER ANY SUCH LAWS.

 

DOCUMENT
SECURITY SYSTEMS, INC.

 

WARRANT
TO PURCHASE COMMON STOCK

(Expires November 14, 2021)

 

Issue
Date: November 14, 2016

Warrant
Shares: 750,000

 

FOR
VALUE RECEIVED, subject to the provisions set forth below, the undersigned, DOCUMENT SECURITY SYSTEMS, INC., a New York corporation
(the “Company”), hereby certifies that BRICKELL KEY INVESTMENTS LP, a Delaware limited partnership, or its
registered assigns (the “Holder”) is entitled to subscribe for and purchase from the Company up to 750,000
shares of Common Stock (the “Warrant Shares”) at an exercise price of $1.00 per share (the “Exercise Price”)
for an aggregate cash purchase price of $750,000 (the “Aggregate Exercise Price”) at any time from and after the date
hereof and until 5:00 p.m. (Eastern time) on November 14, 2021 (the “Expiration Date”) upon surrender to the
Company at its principal office (or at such other location as the Company may advise the Holder in writing) of this Warrant properly
endorsed with the Notice of Exercise attached hereto duly filled in and signed and, if applicable, upon payment in cash or by
check of the aggregate Exercise Price for the number of shares for which this Warrant is then exercisable in accordance with the
provisions hereof. The number of Warrant Shares is subject to adjustment as provided in Section 3 of this Warrant. 

 

In
the event that at any time there is more than one (1) holder of this Warrant (A) the term “Holder” shall be
deemed to refer to all such holders and each such holder shall be referred to herein as a “Holder” and collectively
as the “Holders”, and (B) to any action, approval, or consent of the Holders required or otherwise permitted
pursuant to the provisions of this Warrant to be obtained from the Holder, shall be deemed to have been taken, received or otherwise
obtained if such action, approval or consent is taken or received or otherwise obtained by or from Holders of Warrants that are
collectively exercisable into more than fifty percent (50%) of the Warrant Shares into which this Warrant (taken as a whole) is
then exercisable (the “Requisite Holders”).

 

    	 		 

    	 	 	 

    

 

1.
Exercise of Warrant.

 

1.1.
Exercise. This Warrant shall be exercisable in whole or in part from time to time at any time from the date hereof until
the Expiration Date, and this Warrant shall expire on the Expiration Date. Upon exercise of this Warrant, the Exercise Price shall
be payable in cash or by check.

 

1.2.
Exercise Procedures; Delivery of Certificate. Upon surrender of this Warrant with a duly executed Notice of Exercise in
the form of Annex A attached hereto, together with payment of the Exercise Price for the Warrant Shares purchased, at the
Company’s principal executive offices (the “Designated Office”), the Holder shall be entitled to receive a
certificate or certificates for the Warrant Shares so purchased to the extent certificated, and if not certificated, the Company’s
records shall be updated to reflect the Warrant Shares so purchased. The Company agrees that the Warrant Shares shall be deemed
to have been issued to the Holder as of the close of business on the date on which this Warrant shall have been surrendered together
with the Notice of Exercise and payment for such Warrant Shares.

 

1.3.
Cashless Exercise. Anything elsewhere contained herein to the contrary notwithstanding, in lieu of payment of the Exercise
Price, a Holder may exercise this Warrant by presentation and surrender of this Warrant to the Company, together with a Cashless
Exercise Form in the form attached hereto as Annex B (or a reasonable facsimile thereof) duly executed (a “Cashless
Exercise”). Such presentation and surrender shall be deemed a waiver of the Holder’s obligation to pay all or
any portion of the Exercise Price, as the case may be. In the event of a Cashless Exercise, the Holder shall exchange this Warrant
for that number of Shares determined by multiplying the number of Shares for which this Warrant is being exercised by a fraction,
(a) the numerator of which shall be the difference between (i) the then current market price per Share, and (ii) the Exercise
Price, and (b) the denominator of which shall be the then current market price per Share. For purposes of any computation under
this Section l.3, the then current market price per Share for the Company’s common stock (the “Shares”)
at any date shall be deemed to be the average of the daily trading price for the ten (10) consecutive trading days immediately
prior to the Cashless Exercise. If, during such measuring period, there shall occur any event which gives rise to any adjustment
of the number of Warrant Shares, then a corresponding adjustment shall be made with respect to the closing prices of the Shares
for the days prior to the Effective Date of such adjustment event. As used herein, the term “trading price” on any
relevant date means (A) if the Shares are listed for trading on the New York Stock Exchange, the NYSE MKT Exchange, the NASDAQ
Global Market, or the NASDAQ Global Select Market, the closing sale price (or, if no closing sale price is reported, the last
reported sale price) of the Shares (regular way), (B) if the Shares were not so listed but quotations for the Shares are reported
on the OTC Bulletin Board, the most recent closing price as reported on the OTC Bulletin Board, or (C) otherwise, the fair market
value of a Share as determined in good faith by the Board of Directors of the Company, without discount for illiquidity or minority
interest.

 

1.4.
Dividends and Distributions. If the Company at any time or from time to time after the date hereof declares, orders, pays
or makes a dividend or other distribution (including, without limitation, any distribution of cash, other security or other property,
by way of dividend or spin-off, reclassification, recapitalization or similar corporate rearrangement or otherwise) on or with
respect to its Shares (other than a dividend that is payable in securities and that is subject to Section 3.3) then, and
in each such case, the Holder shall be entitled to receive its pro-rata share of cash, stock or other property as and when the
same is distributed to the beneficial owners of the Shares, for all Warrant Shares the Holder owns on the record date of such
distribution or dividend as a result of a previous exercise of all or a portion of this Warrant.

 

    	 	-2-	 

    	 	 	 

    

 

1.5.
Redemption of Warrants

 

(a)
Subject to and in accordance with the provisions of this Section 1.5, the Holders shall have the right and option (the
“Redemption Option”) exercisable commencing upon the earliest to occur of the following (each a “Triggering
Event”) (a) a Sale (as hereinafter defined), and (b) the occurrence of an Event of Default under the Proceeds Investment
Agreement, to require the Company to redeem and purchase, all or any portion of the Warrant and Warrant Shares from the Holders
for a price equal to the then Fair Market Value of the Warrants and Warrant Shares the Company is required to redeem (the “Redemption
Price”), payable in cash in full. Such Redemption Option shall be exercised by giving written notice (the “Redemption
Option Notice”) to the Company at least ten (10) days prior to (A) the proposed closing date of a proposed Sale, or
(B) the date on which an Event of Default occurs, provided, that if the Triggering Event is an acceleration of the Obligations
(as defined in the Proceeds Investment Agreement), then the Holder’s notice hereunder may be given simultaneously with or
as part of the notice accelerating the Obligations. Provided that the Redemption Option is duly exercised, the Redemption Price
shall be payable simultaneously with the consummation of the Triggering Event. Upon the Company becoming obligated hereunder to
pay the Redemption Price, the Redemption Price is an Obligation (as defined in the Proceeds Investment Agreement) which shall
be secured by the Collateral (as defined in the Proceeds Investment Agreement) pursuant to the terms of the Proceeds Investment
Agreement.

 

(b)
In the event that and at such time as the Company or its equity holders (x) enters into a binding agreement with respect to any
Sale (and in any event, no later than that date which is twenty (20) days prior to the closing of any such proposed Sale), or
(y) Company has received notice of the occurrence of an Event of Default, the Company shall, in addition to any notice required
under the Proceeds Investment Agreement, give written notice to the Holder (or, if applicable, the holders of the Warrant Shares)
setting forth in reasonable detail the circumstances and material terms of the subject Sale agreement or an Event of Default,
as the case may be. In conjunction with the giving of any such notice, the Company shall provide or cause to be provided to the
Holders any past due consolidated financial statements (whether required pursuant to the Proceeds Investment Agreement or pursuant
to this Warrant).

 

(c)
For purposes hereof, “Sale” shall mean either (i) the sale, lease, license, transfer, conveyance or other disposition,
in one transaction or a series of related transactions, of all or substantially all of the assets of the Company and its Subsidiaries,
taken as a whole, or (ii) a transaction or series of transactions (including by way of merger, consolidation, recapitalization,
reorganization or sale of securities by the holders of securities of the Company) the result of which is that the stockholders
of the Company immediately prior to such transaction are (after giving effect to such transaction) no longer, in the aggregate,
the “beneficial owners” (as such term is defined in Rule 13d-3 and Rule 13d-5 promulgated under the Securities
Exchange Act), directly or indirectly through one or more intermediaries, of more than 50% of the voting power of the outstanding
voting securities of the Company and its Subsidiaries.

 

(d)
For purposes hereof, “Fair Market Value” shall mean the fair market value of the entire Company and its Subsidiaries
on a consolidated basis (after giving effect to the repayment of any funded debt) as determined by an independent nationally recognized
investment banking firm or other third party experienced in valuing similar companies, chosen by the Holder, subject to the Company’s
consent, which will not be unreasonably withheld (and paid for by the Company), without discount for illiquidity minority Shares
or restrictions on transfer. In no event shall the Fair Market Value of a Warrant or the Warrant Shares be less than the per share
consideration received or receivable with respect to the shares of such class in connection with any pending Sale.

 

    	 	-3-	 

    	 	 	 

    

 

(e)
The Redemption Option shall be exercisable at any time and from time to time after the occurrence of a Triggering Event by the
Holder providing a Redemption Option Notice duly executed, to the Company’s principal executive office, in the form attached
hereto as Annex C (or a reasonable facsimile thereof). Upon payment of the Redemption Price by the Company to the Holders,
the Holders shall surrender the applicable Warrant (or the certificate(s) if certificated, representing the applicable Warrant
Shares, as applicable) to the Company, against delivery to the Holders of a replacement Warrant (or certificate(s) representing
Warrant Shares, as applicable) representing the portion of this Warrant or the Warrant Shares (as applicable) not purchased by
the Company hereunder.

 

2.
Transfer; Issuance of Stock Certificates; Restrictive Legends.

 

2.1.
Transfer. This Warrant may be transferred in whole, or in part, by the Holder at any time. Each transfer of this Warrant
and all rights hereunder shall be registered on the books of the Company to be maintained for such purpose, upon surrender of
this Warrant at the Designated Office, together with a written assignment of this Warrant in the form of Annex D attached
hereto duly executed by the Holder or its agent or attorney. Upon such surrender and delivery, the Company shall execute and deliver
a new Warrant or Warrants in the name of the assignee or assignees and in the denominations specified in such instrument of assignment.
A Warrant may be exercised by the new Holder for the purchase of Warrant Shares without having a new Warrant issued. Prior to
due presentment for registration of transfer thereof, the Company may deem and treat the registered Holder of this Warrant as
the absolute owner hereof (notwithstanding any notations of ownership or writing thereon made by anyone other than a duly authorized
officer of the Company) for all purposes and shall not be affected by any notice to the contrary. All Warrants issued upon any
assignment of Warrants shall be the valid obligations of the Company, evidencing the same rights, and entitled to the same benefits
as the Warrants surrendered upon such registration of transfer or exchange.

 

2.2.
Certificates. To the extent Shares are or hereinafter become certificated, certificates for the Warrant Shares shall be
delivered to the Holder within five (5) business days after the rights represented by this Warrant shall have been exercised pursuant
to Section 1. The issuance of certificates for Warrant Shares upon the exercise of this Warrant shall be made without charge
to the Holder hereof including, without limitation, any documentary, stamp or similar tax that may be payable in respect thereof;
provided, however, that the Company shall not be required to pay any income tax to which the Holder hereof may be
subject in connection with the issuance of this Warrant or the Warrant Shares.

 

    	 	-4-	 

    	 	 	 

    

 

2.3.
Restrictive Legend. Except as otherwise provided in this Section 2, each certificate for Warrant Shares, if any,
initially issued upon the exercise of this Warrant and each certificate for Warrant Shares, if any, issued to any subsequent transferee
of any such certificate, shall be stamped or otherwise imprinted with legends in substantially the following form:

 

“These
securities have not been registered under the Securities Act of 1933, as amended (THE “ACT”) OR UNDER the SECURITIES
LAWS OF ANY STATE OR OTHER JURISDICTION. They may not be sold, offered for sale, pledged or hypothecated EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION UNDER THE ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS.”

 

Notwithstanding
the foregoing, the legend requirements of this Section 2.3 shall terminate as to any particular Warrant Shares when (i)
in the case of the first paragraph of such legends, the Warrant Shares are transferred pursuant to an effective resale registration
statement, or the Company shall have received from the Holder thereof an opinion of counsel in form and substance reasonably acceptable
to the Company that such legend is not required in order to ensure compliance with the Securities Act. Whenever the restrictions
imposed by this Section 2.3 shall terminate, the Holder or subsequent transferee, as the case may be, shall be entitled
to receive from the Company without cost to such Holder or transferee a certificate for the Warrant Shares without the subject
restrictive legends.

 

3.
Adjustment of Number of Shares; Nature of Securities Issuable Upon Exercise of this Warrant.

 

3.1.
Adjustment Upon Non-Shares Distributions. If the Company, at any time or from time to time after the issuance of this Warrant,
makes a distribution to the holders of the Shares payable in securities of the Company other than shares of Shares, then, in each
such event, provision shall be made so that the Holder shall receive upon exercise of this Warrant, in addition to the number
of Warrant Shares, the amount of such securities of the Company which would have been received if this Warrant had been exercised
for Warrant Shares on the date of such event, subject to adjustments subsequent to the date of such event with respect to such
distributed securities (i) on an appropriate and equitable arithmetic basis in the event of any stock split, stock dividend, combination
of shares, recapitalization or other such event with respect to such securities from time to time, and (ii) which shall otherwise
be on terms as nearly equivalent as practicable to the adjustments provided in this Section 3.

 

3.2.
Adjustment Upon Merger, Consolidation or Exchange.

 

(a)
If at any time or from time to time after the issuance and before the exercise of this Warrant there is any merger, consolidation,
arrangement or statutory share exchange of the Company with or into any other person or entity, then, in each such event, provision
shall be made so that the Holder shall receive upon exercise of the Warrant the kind and amount of Shares, shares and other securities
and property (including cash) which would have been received upon such merger, consolidation, arrangement or statutory share exchange
by the Holder if this Warrant had been exercised for Warrant Shares immediately prior to such merger, consolidation, arrangement
or statutory share exchange, subject to adjustments for events subsequent to the effective date of such merger, consolidation,
arrangement or statutory share exchange with respect to such shares and other securities which shall be on terms as nearly equivalent
as practicable to the adjustments provided in this Section 3 and all other adjustments under this Section 3.

 

    	 	-5-	 

    	 	 	 

    

 

(b)
If the holders of a majority of the outstanding Shares with the power to vote thereon, wishes to form a holding company which
will own all of the outstanding Shares, the Holder will exchange this Warrant and any Warrant Shares for identical warrants and
common stock of the holding company, and the holding company will become a party to this Warrant and in substitution for the Company;
provided, however, that as a condition to such exchange, i) the Holder shall have the same percentage holdings (in
common stock and/or this Warrant, as applicable) in the holding company as the Holder had in the Company immediately prior to
such exchange, ii) all holders of Shares and options, warrants, convertible securities and other rights to acquire Shares shall
make similar exchanges, such that the Holder and the holders of such other securities shall be treated on an equivalent proportionate
basis, and iii) the holding company shall be a corporation which, to the greatest extent possible, shall have a similar capital
structure and other corporate and tax attributes as the Company.

 

3.3.
Adjustments for Recapitalization or Reclassification. If, at any time or from time to time after the issuance of this Warrant,
the Warrant Shares issuable upon exercise of this Warrant are changed into the same or a different number of securities of any
class of the Company, whether by recapitalization, reclassification or otherwise (other than a merger, consolidation, arrangement
or statutory share exchange provided for elsewhere in this Section 3), then, in each such event, provision shall be made
so that the Holder shall receive upon exercise of this Warrant the kind and amount of securities or other property which would
have been received in connection with such recapitalization, reclassification or other change by the Holder if this Warrant had
been exercised immediately prior to such recapitalization, reclassification or change, subject to adjustments for events subsequent
to the effective date of such recapitalization, reclassification or other change with respect to such securities (i) on an appropriate
and equitable arithmetic basis in the event of any equity split, equity dividend, combination of Shares, recapitalization or other
such event with respect to such securities from time to time, and (ii) which shall otherwise be on terms as nearly equivalent
as practicable to the adjustments provided in this Section 3.

 

3.4.
Post-Issuance Adjustments. In addition to any adjustments which may thereafter be required pursuant to Sections 3.1,
3.2, and 3.3 above, if the Company, at any time or from time to time after the date hereof, shall (a) make a dividend
or distribution on its Shares or Common Stock payable in Shares or Common Stock, (b) subdivide or reclassify the outstanding Shares
or Common Stock into a greater number of shares, or (c) combine or reclassify the outstanding Shares or Common Stock into a smaller
number of Shares or shares, the number of Warrant Shares into which this Warrant is exercisable, and the Exercise Price at that
time shall be proportionately adjusted effective as of the record date for the dividend or distribution or the effective date
of the subdivision, combination or reclassification, but without any adjustment of the Aggregate Exercise Price.

 

3.5.
Notice of Adjustment. Whenever the number or type of securities issuable hereunder is adjusted, the Company shall promptly
deliver to the Holder a certificate of adjustment, setting forth the number and type of securities after adjustment, a brief statement
of the facts requiring the adjustment and the computation by which the adjustment was made. The certificate of adjustment shall
be conclusive evidence of the correctness of the adjustment.

 

    	 	-6-	 

    	 	 	 

    

 

3.6.
Successive Adjustments. The provisions of this Section 3 shall be applicable successively to each event described
herein which may occur subsequent to the issuance of this Warrant and prior to the exercise of this Warrant.

 

3.7.
No Impairment. The Company will not, by amendment of its incorporation documents or through any reorganization, transfer
of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid
the observance or performance of any of the terms to be observed or performed hereunder.

 

3.8.
Authorization and Reservation of Shares. As a condition granting this Warrant, the Company shall take all required actions
to amend its charter documents to authorize a sufficient number of additional Shares for issuance upon exercise of this Warrant
and shall reserve for issuance upon exercise of this Warrant a sufficient number of Shares.

 

4.
Register; Exchange and Replacement of Warrant; Reservation of Shares. The Company shall keep at the Designated Office a
register in which the Company documents and accounts for this Warrant. The Company shall not at any time, except upon the dissolution,
liquidation or winding-up of the Company, close such register so as to result in preventing or delaying the exercise or transfer
of this Warrant.

 

The
Company may deem and treat the person in whose name this Warrant is registered as the Holder and owner hereof for all purposes
and shall not be affected by any notice to the contrary, until presentation of this Warrant for registration or transfer as provided
in this Section 4.

 

Upon
receipt by the Company of evidence reasonably satisfactory to it of the loss, theft, destruction or mutilation of this Warrant
and (in case of loss, theft or destruction) of the Holder’s agreement of indemnity reasonably satisfactory to the Company, and
(in the case of mutilation) upon surrender and cancellation of this Warrant, the Company will (in the absence of notice to the
Company that the Warrant has been acquired by a bona fide purchaser) make and deliver a new Warrant of like tenor, in lieu
of this Warrant without requiring the posting of any bond or the giving of any security.

 

The
Company shall at all times reserve and keep available out of its authorized Shares, solely for the purpose of issuance upon the
exercise of this Warrant, such number of Shares and/or other securities as shall be issuable upon the exercise hereof. The Company
covenants and agrees that, upon exercise of this Warrant and payment of the Exercise Price therefor, if applicable, all Warrant
Shares issuable upon such exercise shall be duly and validly authorized and issued, fully paid and non-assessable.

 

    	 	-7-	 

    	 	 	 

    

 

5.
No Registration Rights.

 

General.
The Shares issuable upon exercise hereunder shall be issued to Holder pursuant to Rule 144 holding period limitations, and Holder
agrees to accept the Shares pursuant to Rule 144 limitations. The Company shall have no obligation to file a registration statement
with respect to the Shares underlying this Warrant for its next public or private offering of common stock, regardless of when
such offering may occur; provided, however, that if at any time thereafter during the term of this Warrant,
the Company proposes to register any of its Shares under the Securities Act in connection with an underwritten public offering,
then Company will promptly give notice to the Holder of its intention to do so. Upon the written request of Holder received by
Company within ten (10) days after receipt by Holder of any such notice , Company will cause the Holder’s Warrant Shares
to be registered under the Securities Act at Company’s expense (the “Piggyback Registration Rights”); provided,
however that the obligation to give such notice and to cause such registration shall not apply to any registration
(a) on Form S-8 (or any successor form), (b) of solely a dividend reinvestment plan or (c) for the sole purpose of offering registered
securities to another Person in connection with the acquisition of assets or capital stock of such Person or in connection with
a merger, consolidation, combination or similar transaction with such Person.

 

6.
Investment Representations. The Holder, by accepting this Warrant, covenants and agrees that, at the time of exercise of
this Warrant, the securities acquired by the Holder upon exercise hereof are for the account of the Holder or are being acquired
for its own account for investment and are not acquired with a view to, or for sale in connection with, any distribution thereof
(or any portion thereof) and with no present intention (at any such time) of offering and distributing such securities (or any
portion thereof), except in compliance with applicable federal and state securities laws.

 

7.
Warrant Holders Not Deemed Shareholders. No Holder of this Warrant shall, as such, be entitled to vote or be deemed the
holder of Warrant Shares that may at any time be issuable upon exercise of this Warrant, 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 company action (whether upon any recapitalization, issue or reclassification of equity, consolidation, merger or
conveyance or otherwise), or to receive notice of meetings, or subscription rights, until such Holder shall have exercised this
Warrant and been issued Warrant Shares or deemed to have been issued Warrant Shares in accordance with the provisions hereof.
No provision hereof, in the absence of affirmative action by the Holder to purchase Shares or other securities hereunder, and
no mere enumeration herein of the rights of the rights or privileges of the Holder hereunder shall give rise to any liability
of such Holder for the Exercise Price or as a shareholder of the Company, whether such liability is asserted by the Company or
by any creditors of the Company.

 

    	 	-8-	 

    	 	 	 

    

 

Notices.
Any notice which is required to be given by this Warrant must be in writing, and shall be given or served, unless otherwise expressly
provided herein, by depositing the same in the United States mail, postpaid and certified and addressed to the party to be notified,
with return receipt requested, or by delivering the same by courier or in person to such party (or, if the party or parties to
be notified be incorporated, to an officer of such party). Notice deposited in the mail, postpaid and certified with return receipt
requested, shall be deemed received and effective upon the deposit in a proper United States depository. Notice given in any other
manner shall be effective only if and when received by the party to be notified. For the purposes of notice, the addresses of
the parties for the receipt of notice hereunder are:

 

If
to Company: Document Security Systems, Inc.

200
Canal View Blvd.

Suite
300

Rochester,
New York 14623

Attention:
Jeff Ronaldi, CEO

Email:
ronaldi@dsssecure.com

 

If
to Holder: Brickell Key Investments LP

11
New Street

St.
Peter Port

Guernsey
GY1 2PF

Attention:

Fax:

Email:

 

With
a copy to: Juridica Asset Management Limited

11
New Street

St.
Peter Port

Guernsey
GY1 2PF

Attention:

Fax:

Email:

 

and

 

Juridica
Asset Management (US) Inc.

18
Broad Street

Suite
201D

Charleston,
SC 29401

U.S.A.

Attention:

Fax:

Email:

 

and

 

Akerman
LLP

750
9th Street, N.W.

Suite
750

Washington,
D.C. 20001

U.S.A.

Attention:

Fax:

Email:

 

    	 	-9-	 

    	 	 	 

    

 

Any
party shall have the right from time to time, and at any time, to change its address for the receipt of notice by giving at least
five (5) days’ prior written notice of the change of its address to the other parties in the manner specified herein.

 

8.
Successors. All the covenants, agreements, representations and warranties contained in this Warrant shall bind the parties
hereto and their respective heirs, executors, administrators, distributees, successors, assigns and transferees.

 

9.
Law Governing. THIS WARRANT SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

 

10.
Entire Agreement; Amendments and Waivers. This Warrant sets forth the entire understanding of the parties with respect
to the transactions contemplated hereby. The failure of any party to seek redress for the violation or to insist upon the strict
performance of any term of this Warrant shall not constitute a waiver of such term and such party shall be entitled to enforce
such term without regard to such forbearance. This Warrant may be amended, and any breach of or compliance with any covenant,
agreement, warranty or representation may be waived, only if the Company has obtained the written consent or written waiver of
the Holder, and then such consent or waiver shall be effective only in the specific instance and for the specific purpose for
which given.

 

11.
Severability; Headings. If any term of this Warrant as applied to any person or to any circumstance is prohibited, void,
invalid or unenforceable in any jurisdiction, such term shall, as to such jurisdiction, be ineffective to the extent of such prohibition
or invalidity without in any way affecting any other term of this Warrant or affecting the validity or enforceability of this
Warrant or of such provision in any other jurisdiction. The Section headings in this Warrant have been inserted for purposes of
convenience only and shall have no substantive effect.

 

[The
remainder of this page is intentionally blank]

 

    	 	-10-	 

    	 	 	 

    

 

IN
WITNESS WHEREOF, the Company has caused this Warrant to be duly executed as of the 14th day of November, 2016.

 

	 	DOCUMENT SECURITY SYSTEMS, INC.
	 	 	 
	 	By:	/s/ Jeffrey Ronaldi 
	 	Name:	Jeffrey Ronaldi
	 	Title:	Chief Executive Officer

 

    	{38961835;1}Signature Page to Warrant to Purchase Shares
	 

    	 	 	 

    

 

ANNEX
A

 

NOTICE
OF EXERCISE

 

(To
be executed upon exercise of the within Warrant)

 

The
undersigned hereby irrevocably elects to exercise the right to purchase Shares of DOCUMENT SECURITY SYSTEMS, INC. (the “Company”)
covered by the within Warrant according to the conditions hereof. Based on the most recent financial statements provided by the
Company to the undersigned (provided that such information shall be updated and/or supplemented by the Company by written notice
given to the undersigned by the Company promptly after the date hereof and the following calculations appropriately adjusted as
needed), the aggregate Shares purchasable upon this exercise is _______ and the aggregate purchase price for such Shares is $________.

 

	 	By:	 
	 	 	(Signature of Registered Holder)

 

Dated:
____________________________

 

    	 		 

    	 	 	 

    

 

ANNEX
B

 

CASHLESS
EXERCISE FORM

 

(To
be executed upon exercise of Warrants pursuant to Section 1.3 of the Warrant)

 

The
undersigned hereby irrevocably elects to surrender ____________ Shares in DOCUMENT SECURITY SYSTEMS, INC. purchasable under the
Warrant for _________ Shares issuable in exchange therefor pursuant to the Cashless Exercise provisions of the within Warrant,
as provided for in Section 1.3 of such Warrant.

 

Please
issue a certificate or certificates for such Shares, if any, in the name of, and pay cash for fractional shares in the name of:

 

(Please
print name, address, and social security number/tax identification number:)

 

___________________________________________

 

___________________________________________

 

___________________________________________

 

___________________________________________

 

___________________________________________

 

and,
if said number of Shares shall not be all the Shares purchasable thereunder, that a new Warrant for the balance remaining of the
Shares purchasable under the within Warrant be registered in the name of the undersigned Holder or its transferee as below indicated
and delivered to the address stated below.

 

Dated:____________________________

 

Name
of Warrant Holder

	or
    transferee:	 
	 	(Please print)
	 	 
	Address:	 
	 	 
	Signature:	 

 

	NOTICE:	The
    signature on this form must correspond with the name as written upon the face of this Warrant in every particular, without
    alteration or enlargement or any change whatsoever.

 

    	 		 

    	 	 	 

    

 

ANNEX
C

 

REDEMPTION
EXERCISE FORM

 

(To
be executed upon exercise of a Redemption Option

pursuant to Section 1.5 of the Warrant)

 

The
undersigned hereby irrevocably elects to require DOCUMENT SECURITY SYSTEMS, INC. to purchase _____% of Warrant No. ______ pursuant
to the Redemption Option provisions of the within Warrant, as provided for in Section 1.5 of such Warrant.

 

Please
send cash in the amount of the $__________________ (the “Redemption Price”) by wire transfer of immediately
available funds to:

 

(Please
print name, address, and social security number/tax identification number:)

 

___________________________________________

 

___________________________________________

 

___________________________________________

 

___________________________________________

 

___________________________________________

 

Wire
transfer instructions:

 

___________________________________________

 

___________________________________________

 

___________________________________________

 

___________________________________________

 

___________________________________________

 

Dated:____________________________

 

Name
of Warrant Holder

	or
    transferee:	 
	 	(Please print)
	 	 
	Address:	 
	 	 
	Signature:	 

 

	NOTICE:	The
    signature on this form must correspond with the name as written upon the face of this Warrant in every particular, without
    alteration or enlargement or any change whatsoever.

 

    	 		 

    	 	 	 

    

 

ANNEX
D

 

ASSIGNMENT
FORM

 

FOR
VALUE RECEIVED the undersigned registered owner of this Warrant hereby sells, assigns and transfers unto the Assignee named below
all of the rights of the undersigned under this Warrant:

 

Name
and Address of Assignee:

 

___________________________________________

 

___________________________________________

 

___________________________________________

 

___________________________________________

 

___________________________________________

 

and
does hereby irrevocably constitute and appoint _______________________ attorney-in-fact to register such transfer onto the books
of DOCUMENT SECURITY SYSTEMS, INC. maintained for the purpose, with full power of substitution in the premises.

 

	Dated: _________________	Print
    Name:	 
	 	Signature:	 
	 	Witness:	 

 

	NOTICE:	The
    signature on this assignment must correspond with the name as written upon the face of this Warrant in every particular, without
    alteration or enlargement or any change whatsoever.Exhibit
10.32

 

Portions
of this exhibit marked [*] are requested to be treated confidentially.

 

Execution

 

FIRST
AMENDMENT TO INVESTMENT AGREEMENT 

AND
CERTAIN OTHER DOCUMENTS

 

This
FIRST AMENDMENT TO INVESTMENT AGREEMENT AND CERTAIN OTHER DOCUMENTS (this “Amendment”) is dated as of December
2, 2016 (the “Effective Date”), is entered into by and among DSS Technology Management, Inc. (the “Company”),
Document Security Systems, Inc. (“DSS”), Fortress Credit Co LLC (“FCC”), as Collateral Agent,
and the undersigned Investors (the “Investors”), and amends that certain Investment Agreement (as amended and
in effect from time to time, the “Agreement”) dated as of February 13, 2014 by and among the Company, DSS,
FCC and the Investors (collectively, the “Parties”).

 

WHEREAS,
the Company had requested, and the Investors had previously advanced, an aggregate of (Four and a Half Million Dollars) $4,500,000
pursuant to the Agreement for the purchase of the Contingent Interest, Fixed Return Interests and Notes, as set forth on Schedules
2.1, 2.2 and 2.3 to the Agreement.

 

WHEREAS,
the Parties wish to amend the Agreement, and have agreed to the modifications of their respective rights and obligations under
the Agreement set forth in, and subject to the terms and conditions of, this Amendment.

 

NOW
THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt of which is hereby acknowledged,
the Parties hereby agree as follows:

 

Section
1. Amendments.

 

Capitalized
terms used and not otherwise defined in this Amendment shall have the meanings specified in the Agreement.

 

A.
Agreement. The Agreement shall be amended as follows:

 

(a)
Section 4.1.3(i) shall be amended and restated as follows: “(i) to the Notes Purchasers until they have received
payment in full of the Notes and the Capitalized Expenses (including accrued interest and any Make Whole Amount), then”

 

(b)
A new Section 4.3 is hereby added to the Agreement as follows:

 

    	 

    	 

    

 

“Section
4.3. Additional Amounts. An amount equal to 25% (twenty-five percent) of any amounts received by the Company for any and
all types of Monetization Activities related to United States Patent Nos. [*] and [*], which constitute all of the letters patent
acquired by the Company from Stragent LLC, as reflected on Schedule 4.3 to the Agreement (the “BlueTooth Patents”),
including, without limitation, on account of the Company’s pending lawsuit against [*], whether on account of a settlement,
licensing or other commercialization, arrangement, judgment or otherwise, calculated after taking into account any portion of
such amounts that are reserved for third parties on account of any retained interest or monetization proceeds right in such patents
and after taking into account any contingency fee arrangements; provided, that the Company’s liability to pay the
amounts set forth in this Section 4.3 shall terminate once the Investors have received payments totaling the sum of (i)
the Capitalized Expenses plus (ii) payments of principal and interest on the Notes totaling the sum of (x) $4,500,000 plus
(y) additional amounts, if any, advanced by the Investors pursuant to the Agreement following the Effective Date.”

 

(c)
Section 7.8.2 is hereby modified to add the following sentence to the end of such subsection: “Notwithstanding the foregoing,
the Company shall not make any Disposition of the Dongbu Patents without the prior written consent of the Majority Investors.”

 

(d)
Section 7.8.3 is hereby modified to add the following sentence to the end of Section 7.8.3: “Notwithstanding the foregoing,
from and after December 2, 2016, the Company shall have no obligation to make further payments with respect to the maintenance
of the Dongbu Patents (as defined in the First Amendment to the Investment Agreement dated as of December 2, 2016) other than
to make payments with respect to the 11 such patents that remain active as of December 2, 2016, and those solely from the Deposit
and solely to the extent that such amounts constitute “Qualified Expenses”; provided, that the Company shall
be required to provide the Investors with periodic updates on, and requests for approval of, any such maintenance fees associated
with the Dongbu Patents a reasonable period prior to the due date for payment, and if and only if the Majority Investors approve
the payment of such maintenance fees, they shall constitute ’Approved Dongbu Maintenance Fees.’”

 

(e)
The following additional covenants hereby are added to Article VII of the Agreement:

 

[*]
Confidential treatment requested; certain information omitted and filed separately with the SEC.

 

    	 

    	 

    

 

“7.12.
Additional Deposit. The Company and DSS shall cause to be deposited in the Cash Collateral Account (i) on or before March
2, 2017, an additional Three Hundred Thousand Dollars ($300,000) (the “Initial Deposit”) and (ii) on or before
March 2, 2018, a further Three Hundred Thousand Dollars ($300,000) (the “Additional Deposit” and, together
with the Initial Deposit, the “Deposit”), which amounts may be deposited from funds of the Company or DSS,
but in no event shall the source of such funds be amounts to which the Investors are otherwise entitled (e.g., Monetization Payments
that are required to be applied to the Obligations). The Deposit shall be used to pay, or to reimburse the Company for, Qualified
Expenses; provided that in the event of an Event of Default, at the option of the Investors, any remaining portion of the
Deposit may be applied to the Obligations. “Qualified Expenses” shall consist of out of pocket expenses incurred
in connection with existing patent litigation matters and other patent litigation matters approved by the Investors, in each case,
following the Effective Date which are payable to third parties and which are approved in writing by the Investors (with such
approval not to be unreasonably withheld), for so long as the continued pursuit of such Monetization Activities are, in the sole
determination of the Investors, likely to increase the return to the Investors from the Patents and any Approved Dongbu Maintenance
Fees; provided, for the avoidance of doubt, Qualified Expenses shall not include working capital of the Company, general
corporate purposes, payment of overhead (except that up to $6,250 per month may be used over the next two years to pay employee
salaries, rent and overhead costs associated with the Company’s Texas office, for a total amount of not more than $150,000,
for so long as the aforesaid patent litigation matters are continuing provided that prior to the beginning of each calendar quarter
in which such expenses are incurred the Investors have confirmed to the Company in writing that they continue to believe that
the pursuit of such litigation matters are likely to increase the return to the Investors from the Patents), or payment of any
other amount that is not directly related to the pursuit of Monetization Activities related to the Patents and shall not include
expenses of pursuing Monetization Activities related to the BlueTooth Patents.”

 

7.13.
Additional Litigation. In the event that pending Inter Partes Review (“IPR”) proceedings pertaining to US Patent
Nos. [*] and [*] result in substantially all of the asserted patent claims being held to be invalid, the Company agrees that it
will consult with the Investors in good faith concerning whether to pursue additional Monetization Activities with respect to
US Patent No. [*] (the “Unasserted Patent”), and, to the extent such Monetization Activities appear reasonable
to pursue, shall undertake commercially reasonable efforts to pursue such Monetization Activities. In the event that the Investors
request that the Company pursue Monetization Activities with respect to the Unasserted Patent, and the Company does not promptly
following the Investors’ such request and commence, and thereafter diligently continue to pursue, Monetization Activities
with respect to the Unasserted Patent, as determined by the Investors in their reasonable discretion, then, without limiting the
Investors’ other rights and remedies, the Company shall transfer the Unasserted Patent to the Investors for no additional
consideration.”

 

[*]
Confidential treatment requested; certain information omitted and filed separately with the SEC.

 

    	 

    	 

    

 

(f)
Section 8.1.2 is amended and restated in its entirety as follows:

 

“8.1.2.
Fixed Returns. On or prior to the Maturity Date, the Investors shall fail to have received payments from the Company in
an amount equal to (x) two times the aggregate amount of all Advances made by the Investors as of such date plus (y) the Capitalized
Expenses.”

 

(g)
Section 8.1.3 (x) is amended by replacing “7.10” with “7.10 and Section 7.12.”

 

(h)
A new Section 8.2.1.7 is added as follows:

 

“8.2.1.7
Application of Deposit. The Collateral Agent may apply the then remaining Deposit to the Obligations and in the event of
a Default under Section 7.12, may pursue any and all remedies under this Agreement and applicable law against the Company
and DSS to enforce the agreements of the Company and DSS provided in Section 7.12.”

 

(i)
The final paragraph of Section 8.2.1 is amended and restated as follows:

 

“Notwithstanding
anything to the contrary in this Agreement or any other Document, except as set forth otherwise in Section 8.2.1.7 or 8.2.2,
the sole and exclusive recourse of the Investors and the Collateral Agent arising out of or in connection with an uncured Event
of Default or any other breach of this Agreement or any other Document by the Company shall be the recourse set forth in Sections
8.2.1.1 through 8.2.1.7, and, except as provided under Section 8.2.2 or in the event of a breach of Section
4.3 or Section 7.12 the Investors and Collateral Agent each agree that they will not, individually or collectively,
seek to enforce any monetary judgment with respect to or against any assets of the Company other than the Patents and any Monetization
Payments and the remaining Deposit, and any enforcement of any monetary judgment with respect to or against the Patents or Monetization
Payments shall be pursuant to and in accordance with the terms and conditions of the Collateral Documents; provided, that
in the event of a breach of Section 4.3 or Section 7.12, the Investors and the Collateral Agent may pursue any assets
of the Company (and, in the case of a breach of Section 7.12, DSS) to recover amounts that have not been applied or deposited
in compliance with such provisions of this Agreement including damages, including expenses, related to any such breach and any
related enforcement of rights of the Collateral Agent and the Investors.”

 

    	 

    	 

    

 

(j)
Section 8.2.2 hereby is modified by adding an additional paragraph to the end of such Section, as set forth below:

 

“The
Investors agree and acknowledge that, subject to the Company and DSS complying with the terms of Section 7.12, the Company’s
distributions to DSS of approximately (Two Million Six Hundred Thousand Dollars) $2,600,000 following the Initial Closing Date
and prior to June 30, 2016 shall not constitute an Event of Default or a Full Recourse Event; provided, that in
the event of a breach of such Section 7.12, this sentence shall automatically be void and of no force and effect. Notwithstanding
the possible voiding of this section as provided herein, nothing herein shall be deemed an admission by the Company or DSS that
the Company’s distributions to DSS constituted an Event of Default or a Full Recourse Event, and Investors agree that the
addition of this paragraph shall not be admissible in any subsequent dispute between the Investors and Company and/or DSS as evidence
as to whether such distributions to DSS constituted an Event of Default or Full Recourse Event.”

 

B.
Amendments to Schedules. Schedule I(b) to the Agreement, Schedule 4.2 to the Security Agreement, Schedule
I to the Patent Security Agreement and Schedule A to the Patent License shall each be supplemented with the attached
Schedule B. A new Schedule 4.3 shall be attached to the Agreement in the form attached.

 

Section
2. Effectiveness. The effectiveness of this Amendment is subject to:

 

2.01
Fully Executed Amendment. The Investors, the Company and DSS having received a fully executed copy of this Amendment.

 

2.02
Schedules to Security Agreement. An updated Schedule 4.3 to the Security Agreement shall have been provided to the
Investors, accompanied by a certificate signed by an Authorized Officer of the Company certifying to such schedules’ accuracy
and completeness.

 

2.03
Representations and Warranties; No Default. The representations and warranties of the Company contained in the Agreement
as modified by this Amendment being true and correct in all material respects, and there existing no Default or Event of Default,
each on and as of the date hereof after giving effect to this Amendment. The Investors shall have received a certificate signed
by an Authorized Officer of the Company certifying to the foregoing, and to the accuracy and completeness of the Schedules to
the Agreement, as updated pursuant to this Amendment, including that Schedule 4.3 hereto is an accurate and complete list
of the BlueTooth Patents, and that Schedule B sets forth a true and complete list of the letters patent acquired from Dongbu
HiTekCo, Ltd. (the “Dongbu Patents”), excluding 8 letters patent that have been previously disposed of pursuant
to a confidential settlement agreement.

 

    	 

    	 

    

 

2.04
Due Authorization. The execution, delivery, and performance by the Company and DSS of this Amendment having been duly authorized
by all necessary corporate or other organizational action on the part of the Company and not (i) violating any material provision
of federal, state, or local law or regulation applicable to the Company, DSS or the Governing Documents of any such entity, or
any order, judgment, or decree of any court or other Governmental Authority binding on any such entity, (ii) conflicting with,
resulting in a breach of, or constituting (with due notice or lapse of time or both) a default under any material agreement of
DSS or the Company where any such conflict, breach or default could individually or in the aggregate reasonably be expected to
have a Material Adverse Effect, (iii) resulting in or require the creation or imposition of any Lien of any nature whatsoever
upon any assets of the Company, other than Permitted Liens, or (iv) requiring any approval of any holder of Capital Stock of DSS
or the Company or any approval or consent of any Person under any material agreement of either such entity, other than consents
or approvals that have been obtained and that are still in force and effect.

 

2.05
Expenses. A fee in the amount of $150,000 in connection with the preparation, negotiation, execution and delivery of this
Amendment will be added to the Obligations (the “Capitalized Expenses”).

 

Section
3. Miscellaneous. Except as specifically amended or waived above, the Agreement and the other Documents shall remain
unchanged and in full force and effect and are hereby ratified and confirmed. In the event of any express or implied conflict
or inconsistency between this Amendment and the Agreement (or any of the other Documents), this Amendment shall prevail in all
respects. The execution, delivery and effectiveness of this Amendment shall not operate as a waiver of any right, power or remedy
of the Collateral Agent or any Investor under the Agreement or any Document, nor constitute a waiver of any provision of the Agreement
or any Document. This Amendment is a Document for all purposes of the Agreement. This Amendment may be executed in any number
of counterparts, and by different parties hereto on separate counterpart signature pages, and all such counterparts taken together
shall be deemed to constitute one and the same instrument. Delivery of a counterpart signature page by facsimile transmission
or by e-mail transmission of an Adobe portable document format file (also known as a “PDF” file) shall be effective
as delivery of a manually executed counterpart signature page. Section headings used in this Amendment are for reference only
and shall not affect the construction of this Amendment.

 

Section
4. Governing Law. This Amendment, and any issue, claim or proceeding arising out of or relating to this Amendment or
the conduct of the parties hereto, whether now existing or hereafter arising and whether in contract, tort or otherwise, shall
be governed by and construed solely and exclusively in accordance with the laws of the State of New York, without giving effect
to any law which would result in the application of a different body of law.

 

    	 

    	 

    

 

IN
WITNESS WHEREOF, the Parties have caused this Amendment to be duly executed and delivered as of the Effective Date.

 

	 	 	Collateral
    Agent:
	Investors:	 	 
	 	 	Fortress
    Credit Co LLC
	Fortress
    Credit Co LLC, as	 	 
	Note
    Purchaser	 	 
	 	 	/s/
    Jason Meyer
	 	 	By:	Jason
    Meyer
	 	 	Title:	Chief
    Administrative Officer
	/s/
    Jason Meyer	 	 	 
	By:
    	Jason
    Meyer	 	 	 
	Title:
    	Chief
    Administrative Officer	 	 	 
	 	 	 	Company:
    
	 	 	 
	CF
    DB EZ LLC, as Fixed Return Interest	 	DSS
    TECHNOLOGY MANAGEMENT, INC
	Purchaser
    and Contingent Interest	 	 
	Purchaser	 	 
	 	 	/s/
    Jeffrey Ronaldi
	 	 	By:	Jeffrey
    Ronaldi
	 	 	Title:	CEO
	/s/
    Jason Meyer	 	 	 
	By:	 Jason
    Meyer	 	 
	Title:	 Chief
    Administrative Officer	 	 
	 	 	 	DSS:
	 	 	 	DOCUMENT
    SECURITY SYSTEMS, INC.
	 	 	 	(solely
    for purposes of Sections 7.12 and
	 	 	 	8.2.2
    of the Agreement, as modified hereby)
	 	 	 	 
	 	 	 	/s/
    Jeffrey Ronaldi
	 	 	 	By:	Jeffrey
    Ronaldi
	 	 	 	Title:	CEO

 

    	 

    	 

    

 

SCHEDULE
B

 

Dongbu
Patents

 

	Patent No.	 	Title	 	Foreign Counterparts
	[*	 	 	 	]

 

[*]
Confidential treatment requested; certain information omitted and filed separately with the SEC.

 

    	 

    	 

    

 

SCHEDULE
4.3

 

United
States Patent No.

 

[*]

 

[*]

 

[*]
Confidential treatment requested; certain information omitted and filed separately with the SEC.

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