Document:

THE WARRANTS REPRESENTED BY THIS CERTIFICATE AND THE SECURITIES ISSUABLE UPON
EXERCISE THEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"), AND MAY NOT BE OFFERED OR SOLD EXCEPT (i) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT, (ii) TO THE EXTENT APPLICABLE,
PURSUANT TO RULE 144 UNDER SUCH ACT (OR ANY SIMILAR RULE UNDER SUCH ACT RELATING
TO THE DISPOSITION OF SECURITIES), OR (iii) UPON THE DELIVERY BY THE HOLDER TO
THE COMPANY OF AN OPINION OF COUNSEL, REASONABLY SATISFACTORY TO COUNSEL FOR THE
COMPANY, STATING THAT AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT IS
AVAILABLE.

                         EXERCISABLE UNTIL ON OR BEFORE
                        5:00 P.M., NEW YORK TIME, , 2008

                                                   Series A Warrants ________

                     DOCUMENT SECURITY SYSTEMS, INCORPORATED

         This warrant certificate (the "Warrant Certificate") certifies that
_________ or registered assigns, is the registered holder (the "Holder") of
Series A Warrants to purchase, at any time until 5:00 P.M. New York time on
_________, 2008 (the "Expiration Date"), up to ___________ fully-paid and
non-assessable shares, subject to adjustment in accordance with Article 6 hereof
(the "Warrant Shares"), of the common stock, par value $.02 per share (the
"Common Stock"), of DOCUMENT SECURITY SYSTEMS, INCORPORATED, a New York
corporation (the "Company"), subject to the terms and conditions set forth
herein. The warrants represented by this Warrant Certificate and any warrants
resulting from a transfer or subdivision of the warrants represented by this
Warrant Certificate shall sometimes hereinafter be referred to, individually, as
a "Warrant" and, collectively, as the "Warrants." This Warrant Certificate is
being delivered in connection with the Confidential Offering Memorandum dated
October ___, 2003 and Subscription Agreement between the Company and the
original holder hereof.

         1. EXERCISE OF WARRANTS. This Warrant is initially exercisable to
purchase one Warrant Share at an initial exercise price of $5.00 per share,
subject to adjustment as set forth in Article 6 hereof, payable in cash or by
check to the order of the Company, or any combination of cash or check. Upon
surrender of this Warrant Certificate with the annexed Form of Election to
Purchase duly executed, together with payment of the Exercise Price (as
hereinafter defined) for the Warrant Shares purchased, at the Company's
principal offices (presently located at 36 W. Main Street, Rochester, New York
14614), the registered holder of the Warrant Certificate (the "Holder" or
"Holders") shall be entitled to receive a certificate or certificates for the
Warrant Shares so purchased. The purchase rights represented by this Warrant
Certificate are exercisable at the option of the Holder hereof, in whole or in
part (but not as to fractional shares). In the case of the purchase of less than
all the Warrant Shares purchasable under this Warrant Certificate, the Company
shall cancel this Warrant Certificate upon its surrender and shall

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execute and deliver a new Warrant Certificate of like tenor for the balance of
the Warrant Shares purchasable hereunder.

         2. ISSUANCE OF CERTIFICATES. Upon the exercise of the Warrants, the
issuance of certificates for the Warrant Shares purchased pursuant to such
exercise shall be made forthwith without charge to the Holder thereof including,
without limitation, any tax which may be payable in respect of the issuance
thereof, and such certificates shall (subject to the provisions of Article 3
hereof) be issued in the name of, or in such names as may be directed by, the
Holder thereof; provided, however, that the Company shall not be required to pay
any tax which may be payable in respect of any transfer involved in the issuance
and delivery of any such certificates in a name other than that of the Holder
and the Company shall not be required to issue or deliver such certificates
unless or until the person or persons requesting the issuance thereof shall have
paid to the Company the amount of such tax or shall have established to the
satisfaction of the Company that such tax has been paid.

                  The Warrant Certificates and, upon exercise of the Warrants,
the certificates representing the Warrant Shares shall be executed on behalf of
the Company by the manual or facsimile signature of those officers required to
sign such certificates under applicable law.

                  This Warrant Certificate and, upon exercise of the Warrants,
in part or in whole, certificates representing the Warrant Shares shall bear a
legend substantially similar to the following:

         The securities represented by this certificate have not been registered
         under the Securities Act of 1933, as amended ("Act"), and may not be
         offered or sold except (i) pursuant to an effective registration
         statement under the Act, (ii) to the extent applicable, pursuant to
         Rule 144 under the Act (or any similar rule under such Act relating to
         the disposition of securities), or (iii) upon the delivery by the
         holder to the Company of an opinion of counsel, reasonably satisfactory
         to counsel to the issuer, stating that an exemption from registration
         under such Act is available.

         3. RESTRICTION ON TRANSFER OF WARRANTS. The Holder of this Warrant
Certificate, by its acceptance thereof, represents and warrants to, and
covenants and agrees with the Company that the Warrants and the Warrant Shares
issuable upon exercise of the Warrants are being acquired for the Holder's own
account as an investment and not with a view to the resale or distribution
thereof and that the Warrants and the Warrant Shares are not registered under
the Act or any state securities or blue sky laws and, therefore, may not be
transferred unless such securities are either registered under the Act and any
applicable state securities law or an exemption from such registration is
available. The Holder of this Warrant Certificate acknowledges that the Holder
is an "accredited investor" within the meaning of Regulation D promulgated under
the Act who has been provided with an opportunity to ask questions of
representatives of the Company concerning the Company and that all such
questions were answered to the satisfaction of the Holder. In connection with
any purchase of Warrant Shares

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the Holder agrees to execute any documents which may be reasonably required by
counsel to the Company to comply with the provisions of the Act and applicable
state securities laws.

         4. REGISTRATION RIGHTS. The Holder shall be entitled to all of the
rights and subject to all of the obligations set forth in the Registration
Rights Agreement of even date herewith between the Company and the original
holder hereof.

         5. PRICE

                  5.1 INITIAL AND ADJUSTED EXERCISE PRICE. The initial exercise
price of each Warrant shall be $5.00 per Warrant Share. The adjusted exercise
price shall be the price which shall result from time to time from any and all
adjustments of the initial exercise price in accordance with the provisions of
Article 6 hereof.

                  5.2 EXERCISE PRICE. The term "Exercise Price" herein shall
mean the initial exercise price or the adjusted exercise price, depending upon
the context.

         6. ADJUSTMENTS OF EXERCISE PRICE AND NUMBER OF WARRANT SHARES.

                  6.1 DIVIDENDS AND DISTRIBUTIONS. In case the Company shall at
any time after the date hereof pay a dividend in shares of Common Stock or make
a distribution in shares of Common Stock, then upon such dividend or
distribution, the Exercise Price in effect immediately prior to such dividend or
distribution shall be reduced to a price determined by dividing an amount equal
to the total number of shares of Common Stock outstanding immediately prior to
such dividend or distribution multiplied by the Exercise Price in effect
immediately prior to such dividend or distribution, by the total number of
shares of Common Stock outstanding immediately after such dividend or
distribution. For purposes of any computation to be made in accordance with the
provisions of this Section 6.1, the Common Stock issuable by way of dividend or
distribution shall be deemed to have been issued immediately after the opening
of business on the date following the date fixed for determination of
shareholders entitled to receive such dividend or distribution.

                  6.2 SUBDIVISION AND COMBINATION. In case the Company shall at
any time subdivide or combine the outstanding Common Stock, the Exercise Price
shall forthwith be proportionately decreased in the case of subdivision or
increased in the case of combination.

                  6.3 ADJUSTMENT IN NUMBER OF WARRANT SHARES. Upon each
adjustment of the Exercise Price pursuant to the provisions of this Article 7,
the number of Warrant Shares issuable upon the exercise of each Warrant shall be
adjusted to the nearest full shares of Common Stock by multiplying a number
equal to the Exercise Price in effect immediately prior to such adjustment by
the number of Warrant Shares issuable upon exercise of the Warrants immediately
prior to such adjustment and dividing the product so obtained by the adjusted
Exercise Price.

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                  6.4 RECLASSIFICATION, CONSOLIDATION, MERGER, ETC. In case of
any reclassification or change of the outstanding shares of Common Stock (other
than a change in par value, or from par value to no par value, or from no par
value to par value, or as a result of a subdivision or combination), or in the
case of any consolidation of the Company with, or merger of the Company into,
another corporation (other than a consolidation or merger in which the Company
is the surviving corporation and which does not result in any reclassification
or change of the outstanding shares of Common Stock, except a change as a result
of a subdivision or combination of such shares or a change in nominal value, as
aforesaid), or in the case of a sale or conveyance to another corporation of the
property of the Company as an entirety, the Holder shall thereafter have the
right to purchase the kind and number of shares of stock and other securities
and property receivable upon such reclassification, change, consolidation,
merger, sale or conveyance as if the Holder were the owner of the Warrant Shares
issuable upon exercise of the Warrants immediately prior to any such events at a
price equal to the product of (x) the number of Warrant Shares issuable upon
exercise of the Warrants and (y) the Exercise Price in effect immediately prior
to the record date for such reclassification, change, consolidation, merger,
sale or conveyance as if such Holder had exercised the Warrants.

                  6.5 DETERMINATION OF OUTSTANDING SHARES. The number of shares
of Common Stock at any one time outstanding shall include the aggregate number
of shares issued or issuable upon the exercise of outstanding options, rights,
warrants and upon the conversion or exchange of outstanding convertible or
exchangeable securities.

         7. EXCHANGE AND REPLACEMENT OF WARRANT CERTIFICATES. This Warrant
Certificate is exchangeable without expense, upon the surrender hereof by the
registered Holder at the principal executive office of the Company, for a new
Warrant Certificate of like tenor and date representing in the aggregate the
right to purchase the same number of Warrant Shares in such denominations as
shall be designated by the Holder thereof at the time of such surrender.

         Upon receipt by the Company of evidence reasonably satisfactory to it
of the loss, theft, destruction or mutilation of this Warrant Certificate, and,
in case of loss, theft or destruction, of indemnity or security reasonably
satisfactory to it, and reimbursement to the Company of all reasonable expenses
incidental thereto, and upon surrender and cancellation of the Warrants, if
mutilated, the Company will make and deliver a new Warrant of like tenor, in
lieu thereof.

         8. ELIMINATION OF FRACTIONAL INTERESTS. The Company shall not be
required to issue certificates representing fractions of shares of Common Stock
and shall not be required to issue scrip or pay cash in lieu of fractional
interests, it being the intent of the parties that all fractional interests
shall be eliminated by rounding any fraction up to the nearest whole number of
shares of Common Stock.

         9. RESERVATION OF SHARES. The Company covenants and agrees that it will
at all times reserve and keep available out of its authorized share capital,
solely for the purpose of issuance upon the exercise of the Warrants, such
number of shares of Common Stock as shall be equal to the number of Warrant
Shares issuable upon the exercise of the Warrants, for issuance

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upon such exercise, and that, upon exercise of the Warrants and payment of the
Exercise Price therefor, all Warrant Shares issuable upon such exercise shall be
duly and validly issued, fully paid, nonassessable and not subject to the
preemptive rights of any shareholder.

         10. NOTICES TO WARRANT HOLDERS. Nothing contained in this Agreement
shall be construed as conferring upon the Holder or Holders the right to vote or
to consent or to receive notice as a stockholder in respect of any meetings of
stockholders for the election of directors or any other matter, or as having any
rights whatsoever as a shareholder of the Company. If, however, at any time
prior to the expiration of the Warrants and their exercise, any of the following
events shall occur:

         (a) the Company shall take a record of the holders of its Common Stock
for the purpose of entitling them to receive a dividend or distribution payable
otherwise than in cash, or a cash dividend or distribution payable otherwise
then out of current or retained earnings, as indicated by the accounting
treatment of such dividend or distribution on the books of the Company; or

         (b) the Company shall offer to all the holders of its Common Stock any
additional shares of Common Stock or other shares of capital stock of the
Company or securities convertible into or exchangeable for shares of Common
Stock or other shares of capital stock of the Company, or any option, right or
warrant to subscribe therefor;

         (c) a dissolution, liquidation or winding up of the Company (other than
in connection with a consolidation or merger) or a sale of all or substantially
all of its property, assets and business as an entirety shall be proposed; or

         (d) the Company or an affiliate of the Company shall propose to issue
any rights to subscribe for shares of Common Stock or any other securities of
the Company or of such affiliate to all the stockholders of the Company;

then, in any one or more of said events, the Company shall give written notice
of such event at least twenty (20) days prior to the date fixed as a record date
or the date of closing the transfer books for the determination of the
stockholders entitled to such dividend, distribution, convertible or
exchangeable securities or subscription rights, options or warrants, or entitled
to vote on such proposed dissolution, liquidation, winding up or sale. Such
notice shall specify such record date or the date of closing the transfer books,
as the case may be. Failure to give such notice or any defect therein shall not
affect the validity of any action taken in connection with the declaration or
payment of any such dividend or distribution, or the issuance of any convertible
or exchangeable securities or subscription rights, options or warrants, or any
proposed dissolution, liquidation, winding up or sale.

                  Notwithstanding the foregoing, the Company agrees that it
shall promptly deliver to the Holder copies of all financial statements, reports
and proxy statements which the Company is required to send to its stockholders
generally.

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         11. NOTICES. All notices, requests, consents and other communications
hereunder shall be in writing and shall be deemed to have been duly made when
delivered, or mailed by registered or certified mail, return receipt requested:

         (a) If to a registered Holder of the Warrants, to the address of such
Holder as shown on the books of the Company; or

         (b) If to the Company, to the address set forth in Article 1 of this
Agreement or to such other address as the Company may designate by notice to the
Holders.

         12. SUCCESSORS. All the covenants and provisions of this Agreement by
or for the benefit of the Company and the Holders inure to the benefit of their
respective successors and assigns hereunder.

         13. GOVERNING LAW.

                  13.1 CHOICE OF LAW. This Agreement shall be deemed to have
been made and delivered in the State of New York and shall be governed as to
validity, interpretation, construction, effect and in all other respects by the
internal laws of the State of New York.

                  13.2 JURISDICTION AND SERVICE OF PROCESS. The Company and the
Holder each (a) agrees that any legal suit, action or proceeding arising out of
or relating to this Warrant Certificate, or any other agreement entered into
between the Company and the Holder pursuant to the Unit Purchase Agreement shall
be instituted exclusively in the Supreme Court of New York, New York, New York,
or in the United States District Court for the Southern District of New York,
New York (b) waives any objection which the Company or such Holder may have now
or hereafter based upon FORUM NON CONVENIENS or to the venue of any such suit,
action or proceeding, and (c) irrevocably consents to the jurisdiction of the
Supreme Court of New York, New York, New York, or in the United States District
Court for the Southern District of New York, New York in any such suit, action
or proceeding. The Company and the Holder each further agrees (a) to accept and
acknowledge service of any and all process which may be served in any such suit,
action or proceeding in the Supreme Court of New York, New York, New York, or in
the United States District Court for the Southern District of New York, New York
and (b) agrees that service of process upon the Company or the Holder mailed by
certified mail to their respective addresses shall be deemed in every respect
effective service of process upon the Company or the Holder, as the case may be,
in any suit, action or proceeding. FURTHER, BOTH THE COMPANY AND HOLDER HEREBY
WAIVE TRIAL BY JURY IN ANY ACTION TO ENFORCE THE TERMS OF THIS WARRANT
CERTIFICATE AND IN CONNECTION WITH ANY DEFENSE, COUNTERCLAIM OR CROSS-CLAIM
ASSERTED IN ANY SUCH ACTION.

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                  IN WITNESS WHEREOF, the Company has caused this Warrant to be
duly executed, as of the day of , 2003.

                                    DOCUMENTS SECURITY SYSTEMS, INCORPORATED

                                    By: ______________________________

(Corporate Seal)

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<PAGE>

                         [FORM OF ELECTION TO PURCHASE]

         The undersigned hereby irrevocably elects to exercise the right,
represented by this Warrant Certificate, to purchase ________ Warrant Shares and
herewith tenders in payment for such Warrant Shares cash or a certified check
payable to the order of Document Security Systems Incorporated in the amount of
$_________, all in accordance with the terms hereof. The undersigned requests
that a certificate for such Warrant Shares be registered in the name of
_____________________ ______________________, whose address is
________________________________________ _________________________, and that
such certificate be delivered to ___________________, whose address is
____________________ ---------------------------.

Dated:                            Signature:
      --------------------------            --------------------------------
                                            (Signature must conform in all
                                            respects to name of holder as
                                            specified on the face of the
                                            Warrant Certificate.)

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

                        ---------------------------------
                        (Insert Social Security or Other
                          Identifying Number of Holder)

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<PAGE>

                                 ASSIGNMENT FORM
                                 ---------------

The undersigned, being the true and lawful owner of Holder Warrants to purchase
shares of Common Stock of Document Security Systems, Incorporated hereby assigns
and transfers unto:

Name:
            ----------------------------------------------------------------
            (Please typewrite or print in block letters)

Address:
            ----------------------------------------------------------------

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

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

Social Security Number/ Federal ID:
                                    ----------------------------------------

the right to purchase Common Stock of _____________ represented by this Warrant
to the extent of ___________ shares of Common Stock as to which such right is
exercisable and does hereby irrevocably constitute and appoint _______________
Attorney, to transfer the same on the books of Document Security Systems
Incorporated with full power of substitution in the premises.

Date: ___________________

                                            ------------------------------
                                            Name of Registered Holder

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

                                            ------------------------------
                                            Signature, if held jointly

                                        9

<PAGE>REGISTRATION RIGHTS AGREEMENT

          REGISTRATION RIGHTS AGREEMENT (the "Agreement"), dated as of the 25th
day of November, 2003, executed and delivered by DOCUMENT SECURITY SYSTEMS,
INC., a New York corporation (the "Company") which has its principal place of
business at 36 W.Main Street, Rochester, New York 14614, and Fordham Financial
Management, Inc., as agent for and on behalf of, the Holders (as defined below).

                                    RECITALS

          WHEREAS, simultaneously with the execution and delivery of this
Agreement, the Company, pursuant to terms and conditions set forth in the
Confidential Private Offering Memorandum of the Company, dated October 29, 2003,
including the exhibits thereto and any and all supplements thereof and
amendments thereto, and all documents incorporated by reference therein
(collectively, the "Memorandum") is offering for sale (the "Offering") up to 100
units (the "Units"), each Unit consisting of (i) 12,500 shares ("Shares") of its
Common Stock, par value $.02 per share ("Common Stock") and (ii) Series A Common
Stock Warrants (the "Warrants") to purchase up to an aggregate of 3,125 shares
(the "Warrant Shares") of Common Stock;

          WHEREAS, Fordham Financial Management, Inc. ("Fordham") is acting as
placement agent in connection with the Offering, and in connection therewith the
investors in the Offering whose names appear on Exhibit A annexed hereto as may
be amended during the Offering ("Holders") have appointed Fordham as its agent
to execute this Agreement on their behalf; and

          WHEREAS, the terms and conditions of the Offering provide for the
execution and delivery of this Agreement.

          NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged by the Company, the Company hereby
agrees as follows:

          1. Automatic Registration

          (a) The Company shall use its best efforts to file a registration
statement ("Registration Statement") with the Securities and Exchange Commission
under the Securities Act of 1933 (the "Act"), on appropriate form, and such
other documents, including a prospectus, as may be necessary (in the opinion of
counsel for the Company), in order to comply with the provisions of the Act,
within 15 days of the final closing of the Offering, so as to allow for the
resale under the Act by any Holder or combination of Holders of all Registerable
Shares (as defined in Section 2) held by all of the Holders, at the sole expense
of the Company, so as to permit the public resale by the Holder of the
Registerable Shares pursuant thereto.

          (b) Upon filing of the Registration Statement, the Company covenants
and agrees to give written notice of such filing to all Holders of Registerable
Shares within twenty

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(20) business days from the date thereof.

          2. Registerable Shares. For purposes of this Agreement, the term
"Registerable Shares" shall include" (i) the Shares purchased as a component of
the Units in the Offering; (ii) any securities issued or issuable with respect
to the Warrants; or (iii) Warrant Shares; or (iv) any other shares of Common
Stock issued to the Holders by way of stock dividend or stock split or in
connection with a combination of shares, recapitalization, merger, consolidation
or other reorganization or otherwise. Anything herein contained to the contrary
notwithstanding, the provisions of this Agreement shall not apply to, and the
term "Registerable Shares" as used in this Agreement shall not include, Shares
of Common Stock or Warrant Shares after they have been sold by a Holder pursuant
to an effective Registration Statement under the Act or sold pursuant to Rule
144.

          3. Additional Covenants of the Company With Respect to Registration.
The Company covenants and agrees as follows:

                  (a) In connection with any registration under Section 1 above,
the Company shall file the Registration Statement as expeditiously as possible,
but in no event later than 15 business days following the final closing of the
Offering, and use its best efforts to have such Registration Statement declared
effective at the earliest possible time.

                  (b) In connection with any registration of Registerable Shares
pursuant to Section 1 above, the Company shall furnish each Holder of
Registerable Shares included in a Registration Statement with such reasonable
number of copies of such Registration Statement, related preliminary prospectus
and prospectus meeting the requirements of the Act, and other documents
necessary or incidental to the registration and public offering of such
Registerable Shares, as shall be reasonably requested by the Holder to permit
the Holder to make a public distribution of such Registerable Shares.

                  (c) Once effective, the Company covenants and agrees to use
its best efforts to maintain the effectiveness of any Registration Statement
until the earlier of (i) a date which is two years from the final closing date
of the Offering, or (ii) the date that the Holders of the Registerable Shares
receive an opinion of counsel to the Company that all of the Registerable Shares
may be freely traded (without limitation or restriction as to quantity or timing
and without registration under the Act) pursuant to Rule 144 or otherwise;
provided, however, the Company may suspend the use of any Registration Statement
for a period not to exceed 45 days in any 12- month period for valid business
reasons (not including avoidance of the Company's obligations hereunder),
including the acquisition or divestiture of assets, public filings with the SEC,
pending corporate developments and similar events.

                  (d) If any stop order shall be issued by the SEC in connection
with any Registration Statement filed pursuant to Sections 1 above, the Company
will use its best efforts to obtain the removal of such order.

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<PAGE>

                  (e) The Company shall pay all costs, fees, and expenses in
connection with all Registration Statements filed pursuant to Section 1 above,
including, without limitation, the Company's legal and accounting fees, printing
expenses, and blue sky fees and expenses; provided, however, that the Holders
shall be solely responsible for the fees of any counsel retained by the Holders
in connection with such registration and any transfer taxes or underwriting
discounts, commissions or fees applicable to the Registerable Shares sold by the
Holders pursuant thereto.

                  (f) The Company will use its best efforts to qualify any
Registerable Shares included in a Registration Statement for sale in such states
as the Holders of such securities shall reasonably request, provided that no
such qualification will be required in any jurisdiction where, solely as a
result thereof, the Company would be subject to general service of process or to
taxation or qualification as a foreign corporation doing business in such
jurisdiction.

         4.       Indemnification.

                  (a) In the event of any registration of any the Registerable
Shares under the Act, the Company shall indemnify and hold harmless each Holder,
the affiliates of each such Holder, the directors, partners, officers, employees
and agents of each such Holder and any person who controls any such Holder
within the meaning of the Act or the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), against any and all losses, claims, damages or
liabilities, joint or several, to which they or any of them may become subject
under the Act, the Exchange Act or other Federal or State statutory law or
regulation, at common law or otherwise, insofar as such losses, claims, damages
or liabilities (or actions in respect thereof) caused by, arising out of or
based on any untrue statement or alleged untrue statement of a material fact
contained in any registration statement under which such securities were
registered under the Act, any preliminary prospectus, final prospectus or
summary prospectus contained therein, or any amendment or supplement thereto, or
arise out of or are based upon any omission or alleged omission to state therein
a material fact required to be stated therein or necessary to make the
statements therein not misleading, and agrees to reimburse each such indemnified
party, as incurred, for any legal or other expenses reasonably incurred by them
in connection with investigating or defending any such loss, claim, damage,
liability or action; provided, however, that (i) the Company will not be liable
in any case to the extent that any such loss, claim, damage or liability arises
out of or is based upon any such untrue statement or alleged untrue statement or
omission or alleged omission made therein in reliance upon and in conformity
with written information furnished to the Company by or on behalf of any such
Holder specifically for inclusion therein, (ii) the Company will not be liable
to any indemnified party under this indemnity agreement with respect to any
Registration Statement or Prospectus to the extent that any such loss, claim,
damage or liability of such indemnified party results from the use of the
Prospectus during a period when the use of the Prospectus has been suspended in
accordance with Section 3(c) hereof, provided that the Holders received prior
notice of such suspension, which notice shall be deemed to have been received by
such Holders within 48 hours after the giving thereof; and (iii) the Company
shall not be liable to any indemnified party with respect to any preliminary
Prospectus to the extent that any such loss, claim, damage or liability of such

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<PAGE>

indemnified party results from the fact that such indemnified party sold
Registerable Securities to a person as to whom there was not sent or given, at
or prior to the written confirmation of such sale, a copy of the Prospectus or
of the Prospectus as then amended or supplemented in any case where such
delivery is required by the Act, if the loss, claim, damage or liability of such
indemnified party results from an untrue statement or omission of a material
fact contained in the preliminary Prospectus which was corrected in the
Prospectus or in the Prospectus as then amended or supplemented. This indemnity
agreement will be in addition to any liability which the Company may otherwise
have. The Company also agrees to indemnify and provide contribution to each
person who may be deemed to be an underwriter (for purposes of the Act) with
respect to the Registerable Shares ("Underwriter" or "Underwriters"), their
officers and directors, and each person who controls each such Underwriter, on
substantially the same basis as that of the indemnification of and contribution
to the Holders provided in this Section 4.

                  (b) As a condition to including any of the Registerable Shares
in any registration statement filed pursuant to this Agreement, the Holder of
the Registerable Shares, as a prospective seller of the Registerable Shares
hereby agrees to indemnify and hold harmless (in the same manner and to the same
extent as set forth in subdivision (a) of this Section 4) the Company, each
director of the Company, each officer, employee or agent of the Company and each
Underwriter of the Registerable Shares and each other person or entity, if any,
which controls the Company or such Underwriter within the meaning of the Act,
with respect to any statement or alleged statement in, or omission or alleged
omission from, such registration statement, any preliminary Prospectus,
Prospectus or summary Prospectus contained therein, or any amendment or
supplement thereto, if such statement or alleged statement or omission or
alleged omission was made in reliance upon and in conformity with written
information furnished to the Company by the Holder for use in the preparation of
such registration statement, preliminary Prospectus, Prospectus, summary
Prospectus, amendment or supplement. Any such indemnity shall remain in full
force and effect, regardless of any investigation made by or on behalf of the
Company or any such director, officer or controlling person and shall survive
the transfer of such securities by Holder. Anything in this Agreement contained
to the contrary notwithstanding the liability of each Holder for indemnification
or contribution hereunder shall be limited to the amount of proceeds received by
such Holder in the Offering giving rise to such liability.

                  (c) Promptly after receipt by an indemnified party of notice
of the commencement of any action or proceeding involving a claim referred to in
the preceding subdivisions of this Section 4, such indemnified party will, if a
claim in respect thereof is to be made against an indemnifying party, give
written notice to the latter of the commencement of such action, provided that
the failure of any indemnified party to give notice as provided herein shall not
relieve the indemnifying party of its obligations under the preceding
subdivisions of this Section 4, except to the extent that the indemnifying party
is materially prejudiced by such failure to give notice. In case any such action
is brought against an indemnified party, unless in such indemnified party's
reasonable judgment a conflict of interest between such indemnified and
indemnifying parties may exist in respect of such claim, the indemnifying party
shall be entitled to participate in and to assume the defense thereof, jointly
with any other indemnifying party

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<PAGE>

similarly notified, to the extent that the indemnifying party may wish, with
counsel reasonably satisfactory to such indemnified party, and after notice from
the indemnifying party to such indemnified party of its election so to assume
the defense thereof, the indemnifying party shall not be liable to such
indemnified party for any legal or other expenses subsequently incurred by the
latter in connection with the defense thereof other than reasonable costs of
investigation. Notwithstanding the indemnifying party's election to appoint
counsel to represent the indemnified party in an action, the indemnified party
shall have the right to employ separate counsel (including local counsel), and
the indemnifying party shall bear the reasonable fees, costs and expenses of
such separate counsel (and local counsel) if (i) the use of counsel chosen by
the indemnifying party to represent the indemnified party would present such
counsel with a conflict of interest, (ii) the actual or potential defendants in,
or targets of, any such action include both the indemnified party and the
indemnifying party and the indemnified party shall have reasonably concluded
that there may be legal defenses available to it and/or other indemnified
parties which are different from or additional to those available to the
indemnifying party, (iii) the indemnifying party shall not have employed counsel
satisfactory to the indemnified party to represent the indemnified party within
a reasonable time after notice of the institution of such action or (iv) the
indemnifying party shall authorize the indemnified party to employ separate
counsel at the expense of the indemnifying party. An indemnified party shall not
settle or compromise any action for which it seeks indemnification or
contribution hereunder without the prior written consent of the indemnifying
party, which consent shall not be unreasonably withheld. An indemnifying party
will not, without the prior written consent of the indemnified parties, settle
or compromise or consent to the entry of any judgment with respect to any
pending or threatened claim, action, suit or proceeding in respect of which
indemnification or contribution may be sought hereunder (whether or not the
indemnified parties are actual or potential parties to such claim or action)
unless such settlement, compromise or consent includes an unconditional release
of each indemnified party from all liability arising out of such claim, action,
suit or proceeding.

(d) In the event that the indemnity provided in Section 4(a) or 4(b) is
unavailable to or insufficient to hold harmless an indemnified party for any
reason, then each applicable indemnifying party, in lieu of indemnifying such
indemnified party, shall contribute to the aggregate losses, claims, damages and
liabilities (including legal or other expenses reasonably incurred in connection
with investigating or defending same) (collectively "losses") to which such
indemnified party may be subject in such proportion as is appropriate to reflect
the relative benefits received by such indemnifying party, on the one hand, and
such indemnified party, on the other hand, from the Registration Statement which
resulted in such losses.

(e) The provisions of this Section 4 shall remain in full force and effect
regardless of any investigation made by or on behalf of any Holder or the
Company or any other persons who are entitled to indemnification pursuant to the
provisions of this Section 4, and shall survive the sale by a Holder of
Registerable Shares pursuant to the Registration Statement.

          5. Amendments. This Agreement may not be amended, modified or
supplemented, and waivers of or consents to departures from the provisions of
this Agreement may not be given,

                                        5

<PAGE>

unless it would not have an adverse effect upon the rights of any of the Holders
and the Company has obtained the written consent of Holders then holding a
majority of the Registerable Shares.

          6. Notices. Except as otherwise provided in this Agreement, all
notices, requests and other communications (which shall include publication) to
any person provided for hereunder shall be in writing and shall be given by hand
delivery, registered or certified mail or by any courier providing overnight
delivery (i) if to the Company or the initial Holder, at the address set forth
in the Subscription Agreement and (ii) if to a subsequent Holder, to the address
set forth on the books and records of the Company. All such notices, requests or
communications shall not be effective until received.

          7. Assignment. This Agreement shall be binding upon and inure to the
benefit of and be enforceable by the parties hereto. In addition, and whether or
not any express assignment shall have been made, the provisions of this
Agreement which are for the benefit of Holder shall also be for the benefit of
and enforceable by any subsequent holder of the Registerable Shares. Holder
agrees, by accepting any portion of the Registerable Shares after the date
hereof, to the provisions of this Agreement.

          8. Governing Law.

                  (a) THIS AGREEMENT SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, AND THE RIGHTS OF THE PARTIES SHALL BE GOVERNED BY, THE LAWS OF
THE STATE OF NEW YORK WITHOUT REFERENCE TO THE PRINCIPLES OF CONFLICTS OF LAWS.

                  (b) Each of the Company and Holder hereby irrevocably and
unconditionally consents to submit to the exclusive jurisdiction of any State
Court in New York County, New York and the United States District Court for the
Southern District of New York (the "NY Courts") for any litigation arising out
of or relating to this Agreement and the transactions contemplated hereby (and
agrees not to commence any litigation relating thereto except in such courts),
waives any objection to the laying of venue of any such litigation in the NY
Courts and agrees not to plead or claim that such litigation brought in any NY
Courts has been brought in an inconvenient forum.

          9. Counterparts. This Agreement may be executed by facsimile and may
be signed simultaneously in any number of counterparts, each of which shall be
deemed an original, but all such counterparts shall together constitute one and
the same instrument.

          10. Entire Agreement. This Agreement embodies the entire agreement of
between the Company relating to the subject matter hereof and supersedes all
prior agreements and understandings relating to such subject matter.

          11. Severability. If any provision of this Agreement, or the
application of such

                                        6

<PAGE>

provisions to any person or circumstance, shall be held invalid, the remainder
of this Agreement, or the application of such provision to persons or
circumstances other than those to which it is held invalid, shall not be
affected thereby.

          12. Third Party Beneficiaries. The Holders from time to time shall
each be a third party beneficiary of the agreements of the Company contained
herein.

          13. Headings. The headings which are contained in this Agreement are
for the sole purpose of convenience of reference, and shall not limit or
otherwise affect the interpretation of any of the provisions hereof.

          14. Further Assurances. The Company will from time to time after the
date hereof take any and all actions, and execute, acknowledge and deliver any
and all documents and instruments, at its cost and expense, as any Holder may
from time to time reasonably request in order to more fully perfect or protect
the rights intended to be granted to it hereunder.

          15. Interpretation. As used in this Agreement, unless the context
otherwise requires: words describing the singular number shall include the
plural and vice versa; words denoting any gender shall include all genders;
words denoting natural persons shall include corporations, partnerships and
other entities, and vice versa; and the words "hereof", "herein" and
"hereunder", and words of similar import, shall refer to this Agreement as a
whole, and not to any particular provision of this Agreement.

[signature page appears next]

                                        7

<PAGE>

          16. Waiver. The failure of the Company or any Holder to at any time
enforce any of the provisions of this Agreement shall not be deemed or construed
to be a waiver of any such provision, nor to in any way affect the validity of
this Agreement or any provision hereof or the right of the Company or any Holder
to thereafter enforce each and every provision of this Agreement.

          IN WITNESS WHEREOF, the undersigned has duly executed and delivered
this Agreement as of the date first above written.

                                          DOCUMENTS SECURITY SYSTEMS, INC.

                                          By:________________________
                                                   Name: Patrick White
                                                   Title: President

ACCEPTED AND AGREED
AS AGENT ON BEHALF OF THE HOLDERS

Fordham Financial Management, Inc.

By:_______________________
    Name: William Baquet
    Title: President

                                        8

<PAGE>

                                    EXHIBIT A
                                 LIST OF HOLDERS

                                        9

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