Document:

NO SALE,
OFFER TO SELL OR TRANSFER OF THE SECURITIES REPRESENTED BY THIS WARRANT OR ANY
INTEREST THEREIN SHALL BE MADE UNLESS A REGISTRATION STATEMENT UNDER THE FEDERAL
SECURITIES ACT OF 1933, AS AMENDED, WITH RESPECT TO SUCH TRANSACTION IS THEN IN
EFFECT, OR THE ISSUER HAS RECEIVED AN OPINION OF COUNSEL SATISFACTORY TO IT THAT
SUCH TRANSFER DOES NOT REQUIRE REGISTRATION UNDER THAT ACT.

    

    This Warrant will be void after 5:00
p.m. New York time on April __, 2014 (i.e. five years from the first closing
date of the Offering).

    

    

    COMMON
STOCK PURCHASE WARRANT

    

    WARRANT
NO. C-____

    

    To
Subscribe for and Purchase Shares of

    

    Document
Security Systems, Inc.

    

    (Transferability
Restricted as Provided in Paragraph 2 Below)

    

    

    THIS CERTIFIES THAT, for value
received, ________, or registered assigns, is entitled to subscribe for and
purchase from Document Security Systems, Inc., a corporation incorporated under
the laws of the State of New York  (the
“Company”)  ___________ (________) fully paid and non-assessable
shares of Common Stock of the Company at the “Warrant Price” as hereinafter
defined and during the period hereinafter set forth, subject, however, to the
provisions and upon the terms and conditions hereinafter set forth. This Warrant
is one of an issue of the Company’s Common Stock purchase warrants (herein
called the “Warrants”), issued in the Offering (as defined below) identical in
all respects except as to the names of the holders thereof and the number of
Common Shares purchasable thereunder.

    

    1.           As
used herein:

    

    (a)           “Common
Stock” or “Common Shares” shall initially refer to the Company’s Common Stock,
$0.02 par value, per share as more fully set forth in Section 3
hereof.

    

    (b)           “Warrant
Price” shall be $2.00 per share, which is subject to adjustment pursuant to
Section 4 hereof.

    

    (c)           “Warrants”
shall include any Warrants represented by any certificate issued from time to
time in connection with the transfer, partial exercise, exchange of any Warrants
or in connection with a lost, stolen, mutilated or destroyed Warrant
certificate, if any, or to reflect an adjusted number of Common
Shares.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    (d)           “Underlying
Securities” shall refer to and include the Common Stock issuable or issued upon
exercise of the Warrants.

    

    (e)           “Holders”
shall mean the registered holder of such Warrants or any issued Underlying
Securities.

    

    (f)           “Memorandum”
shall mean the Company’s Confidential Private Offering Memorandum Supplement No.
1 dated April 29, 2009, as amended and supplemented, which is being used (or was
used) in connection with the private offering of Common Stock and Series C
Common Stock Purchase Warrants.

    

    (g)           “Registration
Rights Agreement” shall refer to that certain Registration Rights Agreement
dated April __, 2009, between the Company and the Holders listed therein, as may
be amended from time to time to add Holders who purchase Common Stock and
Warrants in the Offering.

    

    (h)           “Offering”
means the private offering of Common Stock and Series C Common Stock
Purchase Warrants in accordance with the Memorandum.

    

    2.           The
purchase rights represented by this Warrant may be exercised by the holder
hereof, in whole or in part at any time, and from time to time, during the
period commencing ______________, 2009 (the “Commencement Date”) until 5:00 New
York Time on ______________, 2014  (the “Expiration Date”), by the
presentation of this Warrant, with the purchase form attached duly executed, at
the Company’s office (or such office or agency of the Company as it may
designate in writing to the Holder hereof by notice pursuant to Section 11
hereof), and upon payment by the Holder to the Company in cash or by certified
check of the Warrant Price for the Common Shares.  The purchase price
of the Common Shares issuable pursuant to the Warrants, shall be payable in cash
and/or by certified bank check.  The Company agrees that the Holder
hereof shall be deemed the record owner of such Common Shares as of the close of
business on the date on which this Warrant shall have been presented and payment
made for such Common Shares as aforesaid. Certificates for the Common Shares so
purchased shall be delivered to the Holder hereof within a reasonable time, not
exceeding ten (10) business days, after the rights represented by this Warrant
shall have been so exercised. If this Warrant shall be exercised in part only,
the Company shall, upon surrender of this Warrant for cancellation, deliver a
new Warrant evidencing the rights of the Holder hereof to purchase the balance
of the Common Shares which such Holder is entitled to purchase
hereunder.  Exercise in full of the rights represented by this Warrant
shall not extinguish the registration rights granted under Section 8
hereof.

     

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

     

    3.           Subject
and pursuant to the provisions of this Section 3, the Warrant Price and number
of Common Shares subject to this Warrant shall be subject to adjustment from
time to time as set forth hereinafter in this Section 3.

    

    (a)           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 3, 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.

    

    (b)           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.

    

    (c)           Adjustment in Number of
Warrant Shares. Upon each adjustment of the Exercise Price pursuant to
the provisions of this Section 3, 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.

    

    (d)           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.

    

    (e)           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.

    

    (f)           Except
as otherwise specifically provided herein the date of issuance or sale of Common
Stock shall be deemed to be the date the Company is legally obligated to issue
such Common Shares.  In case at any time the Company shall take a
record date for the purpose of determining the holders of Common Stock entitled
(i) to receive a dividend or other distribution payable in Common Stock or (ii)
to subscribe for or purchase Common Stock, then such record date shall be deemed
to be the date of issue or sale of the Common Shares, deemed to have been issued
or sold upon the declaration of such dividend or the making of such distribution
or the granting of such right of subscription or purchase, as the case may
be.

     

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

     

    4.           For
the purposes of this Warrant, the terms “Common Shares” or “Common Stock” or
“Warrant Shares” shall mean (i) the class of stock designated as the common
stock, $0.02 par value, of the Company on the date set forth on the first page
hereof or (ii) any other class of stock resulting from successive changes or
re-classifications of such Common Stock consisting solely of changes in par
value, or from no par value to par value, or from par value to no par value. If
at any time, as a result of an adjustment made pursuant to Section 3, the
securities or other property obtainable upon exercise of this Warrant shall
include shares or other securities of the Company other than Common Shares or
securities of another corporation or other property, thereafter, the number of
such other shares or other securities or property so obtainable shall be subject
to adjustment from time to time in a manner and on terms as nearly equivalent as
practicable to the provisions with respect to the Common Shares contained in
Section 3 and all other provisions of this Warrant with respect to Common Shares
shall apply on like terms to any such other shares or other securities or
property. Subject to the foregoing, and unless the context requires otherwise,
all references herein to Common Shares shall, in the event of an adjustment
pursuant to Section 3, be deemed to refer also to any other securities or
property then obtainable as a result of such adjustments.

    

    5.           The
Company covenants and agrees that:

    

    (a)           During
the period within which the rights represented by the Warrant may be exercised,
the Company shall, at all times, reserve and keep available out of its
authorized capital stock, solely for the purposes of issuance upon exercise of
this Warrant, such number of its Common Shares as shall be issuable upon the
exercise of this Warrant; and if at any time the number of authorized Common
Shares shall not be sufficient to effect the exercise of this Warrant, the
Company will take such corporate action as may be necessary to increase its
authorized but unissued Common Shares to such number of shares as shall be
sufficient for such purpose; the Company shall have analogous obligations with
respect to any other securities or property issuable upon exercise of this
Warrant;

    

    (b)           All
Common Shares which may be issued upon exercise of the rights represented by
this Warrant will, upon issuance be validly issued, fully paid, nonassessable
and free from all taxes, liens and charges with respect to the issuance thereof;
and

    

    (c)           All
original issue taxes payable in respect of the issuance of Common Shares upon
the exercise of the rights represented by this Warrant shall be borne by the
Company but in no event shall the Company be responsible or liable for income
taxes or transfer taxes upon the transfer of any Warrants.

     

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

     

    6.           Until
exercised, this Warrant shall not entitle the Holder hereof to any voting rights
or other rights as a stockholder of the Company.

    

    7.           In
no event shall this Warrant be sold, transferred, assigned or hypothecated
except in conformity with the applicable provisions of the Securities Act of
1933, as amended and as then in force (the “Act”), or any similar Federal
statute then in force, and all applicable “Blue Sky” laws.

    

    8.           The
Holder of this Warrant, by acceptance hereof, agrees that, prior to the
disposition of this Warrant or of any Common Shares theretofore purchased upon
the exercise hereof, under circumstances that might require registration of such
securities under the Act, or any similar Federal statute then in force, such
Holder will give written notice to the Company expressing such Holder’s
intention of effecting such disposition, and describing briefly such Holder’s
intention as to the disposition to be made of this Warrant and/or the securities
theretofore issued upon exercise hereof.  Promptly upon receiving such
notice, the Company shall present copies thereof to its counsel.  If,
in the opinion of such counsel, the proposed disposition does not require
registration under the Act or qualification pursuant to Regulation A promulgated
under the Act, or any similar Federal statute then in force, of this Warrant
and/or the securities issuable or issued upon the exercise of this Warrant, the
Company shall, as promptly as practicable, notify the Holder hereof of such
opinion, whereupon such Holder shall be entitled to dispose of this Warrant
and/or such Common Shares theretofore issued upon the exercise hereof, all in
accordance with the terms of the notice delivered by such Holder to the
Company.  Certificates representing the Underlying Securities shall
bear the following legend:

    

    “THESE SECURITIES HAVE NOT BEEN
REGISTERED OR OTHERWISE QUALIFIED UNDER THE SECURITIES ACT OF 1933 (THE
“SECURITIES
ACT“) OR UNDER THE
APPLICABLE SECURITIES LAWS OF ANY STATE. NEITHER THESE SECURITIES NOR ANY
INTEREST THEREIN MAY BE SOLD, TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED OF IN
THE ABSENCE OF REGISTRATION UNDER THE SECURITIES ACT OR ANY APPLICABLE
SECURITIES LAWS OF ANY STATE, UNLESS PURSUANT TO EXEMPTIONS
THEREFROM.”

    

    The holder of this Warrant shall be
entitled to the registration rights with respect to the Underlying Securities as
stated in the Registration Rights Agreement.

    

    9.           This
Warrant is exchangeable, upon its surrender by the registered holder at such
office or agency of the Company as may be designated by the Company, for new
Warrants of like tenor, representing, in the aggregate, the right to subscribe
for and purchase the number of Common Shares that may be subscribed for and
purchased hereunder, each of such new Warrants to represent the right to
subscribe for and purchase such number of Common Shares as shall be designated
by the registered holder at the time of such surrender.  Upon receipt
of evidence satisfactory to the Company of the loss, theft, destruction or
mutilation of this Warrant, and, in the case of any such loss, theft or
destruction, upon delivery of a bond of indemnity satisfactory to the Company,
or in the case of such mutilation, upon surrender or cancellation of this
Warrant, the Company will issue to the registered holder a new Warrant of like
tenor, in lieu of this Warrant, representing the right to subscribe for and
purchase the number of Common Shares that may be subscribed for and purchased
hereunder. Nothing herein is intended to authorize the transfer of this Warrant
except as permitted by applicable law.

     

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

     

    10.           Every
Holder hereof, by accepting the same, agrees with any subsequent Holder hereof
and with the Company that this Warrant and all rights hereunder are issued and
shall be held subject to all of the terms, conditions, limitations and
provisions set forth in this Warrant, and further agrees that the Company and
its transfer agent may deem and treat the registered Holder of this Warrant as
the absolute owner hereof for all purposes and shall not be affected by any
notice to the contrary.

    

    11.           All
notices required hereunder shall be given by first-class mail, postage prepaid;
if given by the holder hereof, addressed to the Company at 28 Main Street East,
Suite 1525, Rochester, NY 14614 or such other address as the Company may
designate in writing to the holder hereof; and if given by the Company,
addressed to the holder at the address of the holder shown on the books of the
Company.

    

    12.           The
validity, construction and enforcement of this Warrant shall be governed by the
laws of the State of New York and jurisdiction is hereby vested in the Courts of
said State in the event of the institution of any legal action under this
Warrant.

     

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

     

    IN WITNESS WHEREOF, Document Security
Systems, Inc. has caused this Warrant to be signed by its duly authorized
officers to be dated _______________, 2009.

     

     

    
      
        	 	DOCUMENT
      SECURITY SYSTEMS, INC.	 
	 	 	 	 
	
                 

              	
                By:
      

              	 	 
	 	 	Name: Patrick
      White	 
	 	 	Title: Chief
      Executive Officer	 
	 	 	 	 

      

    

     

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

     

    PURCHASE
FORM

    To Be
Executed

    Upon
Exercise of Warrant

    

    The
undersigned hereby exercises the right to purchase _______ Common Shares
evidenced by the within Warrant, according to the terms and conditions thereof,
and herewith makes payment of the purchase price in full.  The
undersigned requests that certificates for such shares shall be issued in the
name set forth below.

     

    
      
        	Dated: ,
      ______	      
                Signature

                

                _________________________

                Print
      Name of Signatory

                

                
 

                Name
      to whom certificates are to

                be
      issued if different from above

                

                Address:

                __________________________

                

                __________________________

                

                ___________________________

                Social
      Security No.

                or
      other identifying
number

              

      

    

     

    If said number of shares shall not be
all the shares purchasable under the within Warrant, the undersigned requests
that a new Warrant for the unexercised portion shall be registered in the name
of :

     

    

      
        
          	 	      
                        
                    ___________________________

                                     (Please
      Print)

                    Address:

                    __________________________

                    

                    __________________________

                    
 

                    ______________________

                    Social
      Security No.

                    or
      other identifying number

                    _________________________

                                        Signature

                  

                

        

      

       

      
        
           

        

        
          8DOCUMENT
SECURITY SYSTEMS, INC.

     

    SUBSCRIPTION
AGREEMENT

     

    NONE
OF THE SECURITIES OFFERED PURSUANT TO THIS SUBSCRIPTION AGREEMENT HAVE BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”) OR THE
SECURITIES LAWS OF ANY U.S. STATE OR ANY FOREIGN JURISDICTION AND ARE BEING
OFFERED AND SOLD IN RELIANCE ON EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF
THE ACT AND SUCH LAWS.  SUCH UNITS, THE SHARES OF COMMON STOCK THAT
COMPRISE A PART OF THE UNITS, THE WARRANTS THAT COMPRISE A PART OF THE UNITS AND
THE SHARES ISSUABLE UPON EXERCISE OF SUCH WARRANTS MAY NOT BE OFFERED FOR SALE,
SOLD, TRANSFERRED, PLEDGED OR HYPOTHECATED TO ANY PERSON AT ANY TIME IN THE
ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT COVERING SUCH SECURITIES UNDER
THE ACT OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY TO THE EFFECT THAT
SUCH REGISTRATION IS NOT NECESSSARY.

     

    INVESTMENT
IN THE COMPANY IS HIGHLY SPECULATIVE AND INVOLVES SUBSTANTIAL RISK, INCLUDING,
BUT NOT LIMITED TO THE RISKS SET FORTH IN THE SECTION ENTITLED “RISK FACTORS” IN
THE PRIVATE OFFERING MEMORANDUM ATTACHED HERETO. YOU SHOULD READ THE PRIVATE
OFFERING MEMORANDUM CAREFULLY BEFORE INVESTING.

    

    This
Subscription Agreement (this “Subscription Agreement”) is
entered into on April ___, 2009, by and between DOCUMENT SECURITY SYSTEMS, INC.,
a New York corporation (the “Company”), and
________________________, an individual or entity (“Subscriber”). As used herein,
the Company and Subscriber are individually and respectively referred to as a
“Party” and collectively
as the “Parties.” Terms
not otherwise defined herein shall have the meanings ascribed to them in the
Private Offering Memorandum Supplement No. 1 attached hereto as Exhibit A (the “Private Offering
Memorandum”).

     

    1. Subscription.

     

    Subscriber
subscribes for and offers to purchase, and the Company agrees to issue and sell,
an equity interest in the Company (the “Units”), entitling Subscriber
to the rights of Subscribers described in the Private Offering Memorandum for a
purchase price equal to the amount set forth on the signature page below
(the “Investment Amount”), subject
to the terms and conditions set forth herein.

     

    2. Investment
Amount..

     

    (a) Deliveries Upon
Signing.  Simultaneous with the execution of this Subscription
Agreement, Subscriber shall execute and deliver to the Company:

     

    (i)  an
Investor Questionnaire substantially in the form of Exhibit B hereto (the
“Investor
Questionnaire”); and

     

    (ii) the
Registration Rights in the form of Exhibit C hereto (“Registration Rights
Agreement” and collectively with the Subscription Agreement and Investor
Questionnaire, the “Subscription
Documents”).

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    (b) Payment of Investment
Amount.  Concurrent with the execution of this Subscription
Agreement, Subscriber shall transmit a wire transfer or check to the Company in
an amount equal to such Subscriber’s Investment Amount.   For
purposes of this Agreement, “Payment” shall mean
Subscriber’s implementation of such wire transfer or receipt by the Company of
the bank check. Subscriber funds will be maintained separate and apart from
funds of the Company.   The Parties hereby agree that Subscriber
shall not be deemed to have purchased the Units until the Company shall have
provided a Closing Notice (as defined herein).

    

    (c) Closing. At any time on or
prior to July 7, 2009, the Company, at the Company’s sole discretion, may elect
to accept the subscription of the Subscriber. The Company’s acceptance of the
subscription shall be effective upon the Company’s transmitting a notice to the
Subscriber according to the notice information for the Subscriber set forth
herein informing the Subscriber of such acceptance (“Closing
Notice”).  The Company shall use commercially reasonable
efforts to effect a closing within 21 days after the Company has obtained
executed Subscription Documents with an aggregate Investment Amount of at least
$200,000 and thereafter within 21 days after receiving executed Subscription
Documents and payment of the Investment Amount.

    

    (d) Trigger for Return of Investment
Amount.  If by July 7, 2009, the Company has failed to obtain
executed Subscription Documents with an aggregate Investment Amount of at least
$200,000, then the Company shall return to the Subscriber an amount equal to the
Subscriber’s Investment Amount. In the event that the Company has provided a
Closing Notice to the Subscriber and is nonetheless obligated to return funds to
Subscriber pursuant to this Section 2(d), the Subscriber shall be deemed to have
authorized the Company to take all steps necessary to terminate Subscriber’s
Units in the Company and Subscriber shall execute any documents provided by the
Company to effect such termination.  If the Company does not accept
the subscription of the Subscriber within 45 days after Subscriber’s Payment,
Subscriber may, at Subscriber’s sole discretion, provide written notice to the
Company to return Subscriber’s payment (the “Return
Notice”).  The Company shall, within 5 business days of receipt
of the Return Notice return the Subscriber’s Payment to Subscriber.

     

    3.  The
Offering.

     

    Subscriber
understands that the details of the offering (the “Offering”) are set forth in
the Private Offering Memorandum, as may be amended or supplemented from time to
time. The Offering will terminate on, or prior to, July 7, 2009, subject to
extension and/or modification in the sole discretion of the Company, and may be
extended or modified without notice as described in the Private Offering
Memorandum.

     

    Subscriber
understands that this Subscription Agreement is not binding upon the Company
unless and until such time as (i) payment of the Investment Amount is received
by the Company, and (ii) the Company accepts Subscriber’s subscription in
writing (the “Closing
Date”).

     

    Subscriber
acknowledges that the Company reserves the right, in its sole discretion, to
accept or reject any Subscription Agreement.

     

    Subscriber
acknowledges that Subscriber has received, read, understands and is familiar
with this Subscription Agreement, any attachments, including but not limited to
the Private Offering Memorandum, as may be amended or supplemented from time to
time, and together with any other filed regulatory documents (collectively
“Offering Material”),
and Subscriber further acknowledges that Subscriber has not relied upon any
information concerning the Offering, written or oral, other than those contained
in this Subscription Agreement and the Offering Material.  Subscriber
further understands that any other information or literature, regardless of
whether distributed prior to, simultaneously with, or subsequent to, the date of
this Subscription Agreement shall not be relied upon by Subscriber in
determining whether to make an investment in the Units and Subscriber expressly
acknowledges, agrees and affirms that Subscriber has not relied upon any such
information or literature in making Subscriber’s determination to make an
investment in the Units and that Subscriber understands that, except as
otherwise provided herein, the Company is under no obligation to (and that
Subscriber does not expect it to) update, revise, amend or add to any of the
information heretofore furnished to Subscriber.

     

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

     

    4.  Representations
and Warranties of Subscriber.

     

    (a) In
order to induce the Company to accept Subscriber’s subscription, Subscriber
further represents and warrants to the Company, its Affiliates, as defined in
the Securities Act of 1933 (the “Securities Act”), and counsel
to the Company (the “Company’s
Counsel”), and their respective agents and representatives as
follows:

     

    
      	
              1.  

            	
              SUBSCRIBER
      HAS READ THE PRIVATE OFFERING MEMORANDUM AND EXAMINED THE RISK FACTORS SET
      FORTH THEREIN, AND UNDERSTANDS THE SPECULATIVE NATURE OF AND SUBSTANTIAL
      RISK INVOLVED IN INVESTMENT IN THE
COMPANY.

            

    

    
      	 	 
	
              2.  

            	
              If
      Subscriber has chosen to do so, Subscriber has been represented by such
      legal and tax counsel and other professionals, each of whom has been
      personally selected by Subscriber, as Subscriber has found necessary to
      consult concerning the purchase of the Units, and such representation has
      included an examination of all applicable documents and an analysis of all
      tax, financial, and securities law aspects thereof deemed to be necessary.
      Subscriber, together with Subscriber’s counsel, Subscriber’s advisors, and
      such other persons, if any, with whom Subscriber has found it necessary or
      advisable to consult, have sufficient knowledge and experience in business
      and financial matters to evaluate the information set forth in this
      Subscription Agreement and in the Offering Material and the risks of the
      investment and to make an informed investment decision with respect
      thereto. Further, Subscriber has been given the opportunity for a
      reasonable time period prior to the date hereof to ask questions of, and
      receive answers from, the Company or its representatives concerning the
      terms and conditions of the Offering and other matters pertaining to this
      investment and has been given the opportunity for a reasonable time period
      prior to the date hereof to verify the accuracy of the Company’s
      information.

            

    

    
      	 	 
	
              3.  

            	
              With
      respect to the United States federal, state and foreign tax aspects of
      Subscriber’s investment, Subscriber is relying solely upon the advice of
      Subscriber’s own tax advisors, and/or upon Subscriber’s own knowledge with
      respect thereto.

            

    

    
      	 	 
	
              4.  

            	
              Subscriber
      has not relied, and will not rely upon, any information with respect to
      this offering other than the information contained herein and in the
      Offering Material.

            

    

    
      	 	 
	
              5.  

            	
              Subscriber
      understands that no person has been authorized to make representations or
      to give any information or literature with respect to this offering that
      is inconsistent with the information that is set forth herein and in the
      Offering Material.

            

    

    
      	 	 
	
              6.  

            	
              Subscriber
      understands that, other than as provided herein and in the Offering
      Materials, no covenants, representations, or warranties have been
      authorized by or will be binding upon the Company, with regard to this
      Subscription Agreement, the performance of the Company or any expectation
      of investment returns, including any representations, warranties or
      agreements contained or made in any written document or oral communication
      received from or had with the Company, its Affiliates, Company Counsel or
      any of their respective representatives or agents. Subscriber has not
      relied upon any information or representation that may be or have been
      made or given except as permitted under this
  paragraph.

            

    

     

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

     

    
      	
              7.  

            	
              Subscriber
      understands that the Offering has not been, and it is not anticipated that
      the same will be, registered under the Securities Act, or pursuant to the
      provisions of the securities or other laws of any other applicable
      jurisdictions, but is being made in reliance upon the provisions of
      Section 4(2) and/or 4(6) of the Securities Act and/or Regulation D and the
      other rules and regulations promulgated thereunder, and/or upon such other
      exemption from the registration requirements of the Securities Act as may
      be available with respect to any or all of the investments in securities
      to be made hereunder. Subscriber is fully aware that the Units subscribed
      for by Subscriber are to be sold to Subscriber in reliance upon such safe
      harbor based upon Subscriber’s representations, warranties, and agreements
      as set forth herein. Subscriber is fully aware of the restrictions on
      sale, transferability and assignment of the Units (including the shares of
      Common Stock and the Warrants that comprise the Units, and the shares of
      Common Stock issuable upon exercise of such Warrants), and that Subscriber
      must bear the economic risk of Subscriber’s investment herein for an
      indefinite period of time because the offering has not been registered
      under the Securities Act and, therefore, the Securities cannot be offered
      or sold unless such offer is subsequently registered under the Securities
      Act or an exemption from such registration is available to Subscriber.
  

            

    

    
      	 	 
	
              8.  

            	
              Subscriber
      is an “accredited investor” (as defined in Rule 501 of Regulation D
      promulgated under the Securities
Act).

            

    

    
      	 	 
	
              9.  

            	
              Subscriber’s
      execution and delivery of this Subscription Agreement has been duly
      authorized by all necessary action and all necessary consents have been
      obtained. Subscriber has no present intention to sell, distribute, pledge,
      assign, or otherwise transfer the Units (including the shares of Common
      Stock and the Warrants that comprise the Units, and the shares of Common
      Stock issuable upon exercise of such Warrants), which Subscriber acquires
      pursuant to this offering. Subscriber is making the investment hereunder
      solely for Subscriber’s own account and not for the account of others and
      for investment purposes only and not with a view to or for the transfer,
      assignment, resale or distribution thereof, in whole or in
      part.  Subscriber has no present plans to enter into any such
      contract, undertaking, agreement, or
  arrangement.

            

    

    
      	 	 
	
              10.  

            	
              Except
      as provided in Section 2(c), Subscriber agrees that Subscriber will not
      cancel, terminate or revoke this Subscription Agreement, which has been
      executed by Subscriber, and that this Subscription Agreement shall survive
      any sale, assignment or other transfer of control over, or of all or
      substantially all of Subscriber’s assets or business and Subscriber’s
      bankruptcy, except as otherwise provided pursuant to the laws of any
      applicable jurisdiction.

            

    

    
      	 	 
	
              11.  

            	
              Subscriber
      has substantial investment experience and is familiar with investments of
      the type contemplated by this Subscription Agreement. Subscriber confirms
      that although one of Subscriber’s motivations for investing in the Company
      is to derive economic benefits therefrom, Subscriber is aware that
      purchase of the Units is a speculative investment involving a high degree
      of risk and there is no guarantee that Subscriber will realize any gain
      from Subscriber’s investment or realize any tax benefits therefrom and
      Subscriber is further aware that Subscriber may lose all or a substantial
      part of Subscriber’s investment. Subscriber understands that there are
      substantial restrictions on the transferability of, and there is no
      existing public market for, the Units (including the Warrants that are
      included in the Units) and it may not be possible to liquidate an
      investment in the Units (including the shares of Common Stock and the
      Warrants that comprise the Units, and the shares of Common Stock issuable
      upon exercise of such Warrants). Subscriber affirms that Subscriber
      acknowledges that this investment is highly speculative, involves a high
      degree of risk and, accordingly, Subscriber can afford to lose the entire
      investment.

            

    

     

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

     

    
      	
              12.  

            	
              The
      address set forth herein is Subscriber’s true and correct address and
      Subscriber has no present intention of becoming a resident of any other
      country, state, or jurisdiction prior to, or after, Subscriber’s purchase
      of the Units.

            

    

    
      	 	 
	
              13.  

            	
              Subscriber
      understands the meaning and legal consequences of the foregoing
      representations and warranties, which are true and correct as of the date
      hereof and will be true and correct as of the date of Subscriber’s
      purchase of the Units subscribed for herein. Each such representation and
      warranty shall survive such
purchase.

            

    

    
      	 	 
	
              14.  

            	
              Subscriber
      acknowledges and agrees that it shall not be a defense to a suit for
      damages for any misrepresentation or breach of covenant or warranty made
      by Subscriber that the Company, its Affiliates, the Company’s Counsel and
      their respective agents or representatives knew or had reason to know that
      any such covenant, representation or warranty in this Subscription
      Agreement or furnished or to be furnished to the Company by Subscriber
      contained untrue statements. The foregoing shall survive any investigation
      of Subscriber’s representations and warranties in this Subscription
      Agreement made by the Company, its Affiliates, the Company’s Counsel and
      their respective agents or
representatives.

            

    

    
      	 	 
	
              15.  

            	
              No
      representation or warranty that Subscriber has made in this Subscription
      Agreement, or in a writing furnished or to be furnished pursuant to this
      Subscription Agreement, contains or shall contain any untrue statement of
      fact, or omits or shall omit to state any fact which is required to make
      the statements contained herein or therein, in light of the circumstances
      under which they were made, not
misleading.

            

    

    
      	 	 
	
              16.  

            	
              Subscriber
      has full right, power, and authority to execute and deliver this
      Subscription Agreement and to perform Subscriber’s obligations hereunder.
      This Subscription Agreement has been duly authorized, executed and
      delivered by or on behalf of Subscriber and is a valid, binding and
      enforceable obligation of Subscriber, enforceable against Subscriber in
      accordance with its terms subject to bankruptcy, insolvency,
      reorganization, moratorium or similar laws from time to time in effect and
      affecting creditors’ rights generally and to general equity
      principles.

            

    

    
      	 	 
	
              17.  

            	
              The
      execution and delivery of this Subscription Agreement by Subscriber will
      not result in any violation of, or be in conflict with, or result in the
      default of, any term of any material agreement or instrument to which
      Subscriber is a party or by which Subscriber is bound, or of any law or
      governmental order, rule or regulation which is applicable to
      Subscriber.

            

    

     

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

     

    
      	
              18.  

            	
              Subscriber
      is duly and validly organized, validly existing and in good tax and
      corporate standing as a corporation under the laws of the jurisdiction of
      its incorporation with full power and authority to purchase the Units to
      be purchased by it and to execute and deliver this Subscription
      Agreement.

            

    

    
       

      
      

      
      

      
      

      
      

      
      

      
      

      
        	
                19.  

              	
                      
                  To
      Subscriber’s knowledge, all negotiations relative to this Agreement and
      the transactions contemplated hereby have been carried out by Subscriber
      directly with the Company without the intervention of any person or entity
      in such manner as to give rise to any valid claim by any person or entity
      against Subscriber or the Company for a finder’s fee, brokerage commission
      or similar payment. To the extent Subscriber becomes aware of an
      additional claim to such fees, commission or payments, other than to
      Placement Agent, Subscriber shall promptly provide the Company with notice
      of such claim. To the extent any person or entity claims to be entitled to
      a finder’s fee, brokerage commission, or similar payment in connection
      with the transactions contemplated hereby, Subscriber shall be liable for
      all such fees and expenses related thereto to the extent any such claims
      relate to acts or omissions of Subscriber or to this
      transaction.  In the event a payment is payable by the Company
      to any broker, finder, agent or other person, other than to Placement
      Agent, in connection with Subscriber’s investment in the Company, such
      payment shall be deducted from the amount paid by Subscriber in connection
      with this
Agreement.

                

              

      

    

    
      
      

    

     

    5.  Legend.

     

    Any
certificate representing Subscriber’s interest in the Company shall bear the
following legend:

     

    THESE
SECURITIES HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION
OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED, SOLD, PLEDGED, HYPOTHECATED OR
OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A
TRANSACTION NOT SUBJECT TO THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT
AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS OR BLUE SKY
LAWS  IN WHICH THE TRANSFEROR PROVIDES THE COMPANY WITH AN OPINION OF
COUNSEL SATISFACTORY TO THE COMPANY TO THE EFFECT THAT REGISTRATION IS NOT
NECESSSARY.

     

    6.  Indemnification by
Subscriber.

     

    Subscriber
hereby agrees to indemnify and hold harmless the Company, its Affiliates, the
Company’s Counsel, and their respective officers, directors, employees, agents
and representatives, from any and all damages, losses, costs, and expenses
(including reasonable attorneys’ fees to collect such amount of damages, losses,
costs, expenses) which they, or any of them, may incur by reason of Subscriber’s
failure to fulfill any of the terms and conditions of this Subscription
Agreement or by reason of Subscriber’s breach of any of Subscriber’s
representations and warranties contained in this Subscription
Agreement.

     

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

     

    7.  Confidential
Information.

    

    For purposes of this Agreement, the
term “Confidential Information” will mean and refer to any information,
technical data or know-how, patentable and un-patentable, including, but not
limited to, software, machinery, research, product plans, product services,
customer lists, marketing materials, developments, inventions, process designs,
finances, or other trade secrets of the Company or similar items relating to the
Company’s business and litigation activities, or that of any supplier, customer
or prospective customer, which Confidential Information is designated in writing
to be confidential or proprietary, or if given orally, to Subscriber under
circumstances reasonably demonstrating or suggesting the confidential or
proprietary nature of such information. The restrictions in this Section shall
not apply to information, which (i) prior to or after the time of disclosure
becomes part of the public knowledge or literature, not as a result of any
inaction or action of Subscriber; (ii) must be delivered in response to a valid
order by a court or governmental body, (iii) became or becomes generally
available to the recipient on a non-confidential basis from a source other than
the Company; or (iv) is approved by the Company, in writing, for release.
Subscriber covenants and agrees not to use any Confidential Information for
Subscriber’s own use or benefit (directly or indirectly), or for the benefit of
any party other than Company. Subscriber may not disclose Confidential
Information to third parties except employees, consultants, or professional
advisers of the Company in connection with Company business who are required to
have the information in order to carry out their duties for the Company.
Subscriber agrees that it will take all reasonable measures to protect the
secrecy of and avoid disclosure or use of Confidential Information of the
Company in order to prevent the Confidential Information from falling into the
public domain or the possession of persons other than those persons authorized
hereunder to have such information, which measures shall include the highest
degree of care that Subscriber uses to protect Subscriber’s own Confidential
Information of a similar nature. Subscriber agrees to immediately notify the
Company in writing of any misuse or misappropriation of the Confidential
Information, which may come to Subscriber’s attention. All proceeds from a
misuse or disclosure of the Company’s Confidential Information will be
recoverable from Subscriber responsible for such misuse or disclosure, which
Subscriber shall be liable to the Company to the fullest extent of the
law.

     

    8.  General
Provisions.

     

    (a) Headings. The
headings contained in this Subscription Agreement are for reference purposes
only and shall not affect in any way the meaning or interpretation of this
Subscription Agreement.

     

    (b) Enforceability. If
any provision, which is contained in this Subscription Agreement, for any
reason, should be held to be invalid or unenforceable in any respect under the
laws of any State of the United States or any other jurisdiction, such
invalidity or unenforceability shall not affect any other provision of this
Subscription Agreement. Instead, this Subscription Agreement shall be construed
as if such invalid or unenforceable provisions had not been contained
herein.

     

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

     

    (c) Notices. Any notice
or other communication required or permitted hereunder (“Notice”) must be in writing
and sent by either (i) registered or certified mail, postage prepaid, return
receipt requested, (ii) overnight delivery with confirmation of delivery, or
(iii) confirmed facsimile transmission, in each case addressed as
follows:

     

    
      	
            	
              To
      the Company:

            	
              Document
      Security Systems, Inc.

                    
                Attn:  Chief
      Executive Officer

                28
      East Main Street

                Suite
      1525

                Rochester,
      NY  14614

                Facsimile
      No:  (585)
      325-2977

              

            

    

    

       

      
        	
              	
                To
      Subscriber:

              	
                at the address set forth on the
      signature page

              

      

      
         

      

    

    or in
each case to such other address and facsimile number as shall have last been
furnished by like Notice.  If mailing by registered or certified mail
is impossible due to an absence of postal service, and if the other methods of
sending Notice set forth in this Section 8 are not otherwise available, Notice
shall be in writing and personally delivered to the aforesaid addresses. Each
Notice or communication shall be deemed to have been given as of the date so
mailed or delivered, as the case may be; provided, however, that any Notice
sent by facsimile shall be deemed to have been given as of the date sent by
facsimile.

     

    (d) Governing Law;
Disputes. This Subscription Agreement shall in all respects be construed,
governed, applied and enforced with the laws of the State of New York without
giving effect to the principles of conflicts of laws. The Parties hereby consent
to and irrevocably submit to personal jurisdiction over each of them by the
applicable State or Federal Courts of the State of New York, County of Monroe,
in any action or proceeding, irrevocably waive trial by jury and personal
service of any and all process and other documents and specifically consent that
in any such action or proceeding, any service of process may be effectuated upon
any of them by certified mail, return receipt requested, in accordance with this
Section 8.

     

    (e) Further Assurances.
The Parties agree to execute any and all such other and further instruments and
documents, and to take any and all such further actions, which are reasonably
required to effectuate this Subscription Agreement and the intents and purposes
hereof.

     

    (f) Binding Agreement.
This Subscription Agreement shall be binding upon and inure to the benefit of
the Parties hereto and their heirs, executors, administrators, personal
representatives, successors and assigns.

     

    (g) Waiver. Except as
otherwise expressly provided herein, no waiver of any covenant, condition, or
provision of this Subscription Agreement shall be deemed to have been made
unless expressly set forth in writing and signed by the Party against whom such
waiver is charged; and, (i) the failure of any Party to insist in any one or
more cases upon the performance of any of the provisions, covenants, or
conditions of this Subscription Agreement or to exercise any option herein
contained, shall not be construed as a waiver or relinquishment for the future
of any such provisions, covenants, or conditions; (ii) the acceptance of
performance of anything required by this Subscription Agreement to be performed
with knowledge of the breach or failure of a covenant, condition, or provision
hereof shall not be deemed a waiver of such breach or failure; and, (iii) no
waiver by any Party of one breach by another Party shall be construed as a
waiver with respect to any other or subsequent breach.

     

    (h) Counterparts. This
Subscription Agreement may be executed in one or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.

     

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

     

    (i) Entire Agreement. The
Parties have not made any representations, warranties, or covenants with respect
to the subject matter hereof, orally or in writing, which are not expressly set
forth herein, and this Subscription Agreement, together with any instruments or
other agreements executed simultaneously herewith, constitutes the entire
agreement between them with respect to the subject matter hereof. All
understandings and agreements heretofore had between the Parties with respect to
the subject matter hereof are merged in this Subscription Agreement, which alone
fully and completely expresses their agreement. This Subscription Agreement may
not be changed, modified, extended, terminated, or discharged orally, but only
by an agreement in writing, which is signed by all of the Parties to this
Subscription Agreement.

     

    (j) Subscription
Irrevocable. Except as set forth herein, this Subscription is
irrevocable, is subject to all of the terms and provisions contained in the
Subscription Agreement, and will survive the death, dissolution, or disability
of the Subscriber.

     

    (k) Limited Liability.
The Company, its Affiliates, the Company’s Counsel and the Company’s applicable
agents and representatives shall not be liable for taking any action pursuant to
this Subscription Agreement in the absence of their respective willful
misconduct or fraud.

     

    (l) Assignability. This
Agreement is not transferable or assignable by the Subscriber.

     

    9.  Certification.

     

    Under
penalties of perjury Subscriber certifies as follows:

     

    If it has
been provided, the number shown below, as Subscriber’s taxpayer’s identification
number is Subscriber’s correct taxpayer identification number. Subscriber is not
subject to backup withholding either because Subscriber has not been notified by
the Internal Revenue Service that Subscriber is subject to backup withholding as
a result of a failure to report all interest or dividends, or the Internal
Revenue Service has notified Subscriber that it is no longer subject to backup
withholding.

     

    [REMAINDER
OF PAGE INTENTIONALLY BLANK]

     

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

     

     

    IN
WITNESS WHEREOF, the Subscriber has executed this Subscription Agreement as of
the date first written above.

     

     

    Investment
Amount: $_________

    

    

    Print Name of
Subscriber:    ________________________

    

    

    Signature
of Subscriber:

    

    Individual:

    ____________________________

    

    

    Business
Entity:

    

    By:
 ___________________________

    Name:
___________________________

    Title:
___________________________

     

    

    Taxpayer
ID Number:    ________________

    Date:
________________

    

    Address:
____________________

                    
____________________

                    
____________________

     

    Facsimile
No: ____________________

    

     

    Accepted and Agreed
to:

     

    DOCUMENT
SECURITY SYSTEMS, INC.

     

    

    By:
_____________________________________

    Name: Patrick White

    Title:   Chief Executive
Officer

     

    Date:
_______________________

    

    

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

     

    EXHIBIT
A

    

    PRIVATE
OFFERING MEMORANDUM

     

     

    
      
         

      

      
        11

        
          

        

      

      
         

      

    

    

    EXHIBIT
B

    

    INVESTOR
QUESTIONNIARE

     

     

    
      
         

      

      
        12

        
          

        

      

      
         

      

    

    

    EXHIBIT
C

    

    REGISTRATION
RIGHTS AGREEMENT

     

    
 

    
      
         

      

      
        13

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00159-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00159-of-00352.parquet"}]]