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Proc-Type: 2001,MIC-CLEAR
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<SEC-DOCUMENT>0001144204-06-054618.txt : 20061227
<SEC-HEADER>0001144204-06-054618.hdr.sgml : 20061227
<ACCEPTANCE-DATETIME>20061227155144
ACCESSION NUMBER:		0001144204-06-054618
CONFORMED SUBMISSION TYPE:	8-K/A
PUBLIC DOCUMENT COUNT:		4
CONFORMED PERIOD OF REPORT:	20011226
ITEM INFORMATION:		Entry into a Material Definitive Agreement
ITEM INFORMATION:		Unregistered Sales of Equity Securities
ITEM INFORMATION:		Financial Statements and Exhibits
FILED AS OF DATE:		20061227
DATE AS OF CHANGE:		20061227

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			DOCUMENT SECURITY SYSTEMS INC
		CENTRAL INDEX KEY:			0000771999
		STANDARD INDUSTRIAL CLASSIFICATION:	SERVICES-COMPUTER INTEGRATED SYSTEMS DESIGN [7373]
		IRS NUMBER:				161229730
		STATE OF INCORPORATION:			NY
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		8-K/A
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-32146
		FILM NUMBER:		061300746

	BUSINESS ADDRESS:	
		STREET 1:		36 WEST MAIN ST
		STREET 2:		SUITE 710
		CITY:			ROCHESTER
		STATE:			NY
		ZIP:			14614
		BUSINESS PHONE:		585 232 1500

	MAIL ADDRESS:	
		STREET 1:		36 W MAIN ST
		STREET 2:		SUITE 710
		CITY:			ROCHESTER
		STATE:			NY
		ZIP:			14614

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	NEW SKY COMMUNICATIONS INC
		DATE OF NAME CHANGE:	19920703

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	THOROUGHBREDS USA INC
		DATE OF NAME CHANGE:	19861118
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<TYPE>8-K/A
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        information contained in Item 3.02 relating to the definitive agreements
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        were entered into in connection with a private placement by Document Security
        Systems, Inc. are incorporated herein by reference.</font></div>
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        3.02. Unregistered Sales of Equity Securities. </strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
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        Form
        8-K/A amends the report on Form 8-K dated December 27, 2006, with the following
        amended and restated Item 3.02:</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">On
        December 26, 2006, Document Security Systems, Inc. </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(the
        &#8220;Company&#8221;, &#8220;we&#8221; or &#8220;us&#8221;) </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">sold
        94
        units at a price of $50,000 per unit for gross cash proceeds of $4,700,000,
        consisting of 552,720 unregistered shares of our common stock and five-year
        warrants to purchase up to an aggregate of 276,360 shares of our common stock,
        at an initial exercise price of $11.75 per share. The foregoing securities
        were
        issued pursuant to an offering, which is closed, solely to institutional
        and
        accredited investors. </font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
        net
        proceeds from the offering, following the payment of offering-related expenses,
        will be utilized, in part, to expand the San Francisco-based manufacturing
        facilities of Plastic Printing Professionals (&#8220;P3&#8221;), our wholly owned
        subsidiary. P3&#8217;s facilities would be expanded to accommodate anticipated
        increased order volume in 2007, which is expected to exceed P3&#8217;s&#160;current
        facility&#8217;s production capacity, and to certify P3 for a wide range of security
        printing applications such as identification documents, consumer product
        and
        pharmaceutical packaging, labels, tickets and vital records.&#160; In addition
        to the P3 manufacturing expansion, net proceeds from our offering will be
        used
        to expand our sales, marketing, customer service and support operations as
        well
        as for working capital needs.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Perrin,
        Holden &amp; Davenport Capital Corp., the placement agent for the offering,
        earned consideration equal to 9% commissions and 1% non-accountable fees,
        as
        well as a five-year warrant to purchase up to 22,932 shares of our common
        stock,
        at an initial exercise price of $11.75. </font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
        common stock, warrants and common stock issuable upon exercise of the warrants
        have not been registered under the Securities Act of 1933, as amended (the
        &#8220;Securities Act&#8221;), and were issued and sold in reliance upon the exemption from
        registration contained in Section 4(2) of the Securities Act and Regulation
        D
        promulgated thereunder. These securities may not be offered or sold in the
        United States in the absence of an effective registration statement or exemption
        from the registration requirements under the Securities Act. </font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
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        of
        the definitive agreements relating to the issuance and sale of the common
        stock
        and warrants are filed herewith as Exhibits 4.1, 10.1 and 10.2, and are
        incorporated herein by reference. The foregoing summary descriptions of the
        definitive agreements are qualified in their entirety by reference to the
        full
        texts of each of such exhibits. </font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Item
        9.01. Financial Statements and Exhibits. </strong></font></div>
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      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(d)
        Exhibits. </font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    </div>
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                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Exhibit
                  No.</strong></font></div>
              </td>
              <td width="5%">&#160;</td>
              <td valign="top" width="85%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Description
                  </strong></font></div>
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              <td align="left" valign="top" width="10%">&#160;</td>
              <td width="5%">&#160;</td>
              <td valign="top" width="85%">&#160;</td>
            </tr>
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                  </font></div>
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              <td align="left" valign="top" width="85%" style="border-bottom: medium none;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Form
                  of Warrant to Purchase Common Stock of Document Security Systems,
                  Inc. for
                  each investor and for the Placement Agent. </font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="10%">&#160;</td>
              <td width="5%">&#160;</td>
              <td align="left" valign="top" width="85%">&#160;</td>
            </tr>
            <tr>
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                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">10.1
                  </font></div>
              </td>
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              <td align="left" valign="top" width="85%" style="border-bottom: medium none;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Form
                  of Subscription Agreement between Document Security Systems, Inc.
                  and each
                  investor. </font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="10%">&#160;</td>
              <td width="5%">&#160;</td>
              <td align="left" valign="top" width="85%">&#160;</td>
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                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">10.2
                  </font></div>
              </td>
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              <td align="left" valign="top" width="85%" style="border-bottom: medium none;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Registration
                  Rights Agreement, dated as of December 12, 2006, between Document
                  Security
                  Systems, Inc. and Perrin, Holden &amp; Davenport Capital Corp.
                  </font></div>
              </td>
            </tr>

        </table>
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 27pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Pursuant
        to the requirements of the Securities Exchange Act of 1934, the Registrant
        has
        duly caused this report to be signed on its behalf by the undersigned hereunto
        duly authorized. </font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Dated:
        December 27, 2006</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">
        <table align="center" bgcolor="#ffffff" border="0" cellpadding="0" cellspacing="0" width="100%">

            <tr valign="top" bgcolor="#ffffff">
              <td width="50%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">&#160;</font></td>
              <td width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">&#160;</font></td>
              <td width="49%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">&#160;</font></td>
            </tr>
            <tr valign="top" bgcolor="#ffffff">
              <td><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">&#160;</font></td>
              <td colspan="2"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: "><strong>DOCUMENT
                SECURITY SYSTEMS, INC.</strong></font></td>
            </tr>
            <tr valign="top" bgcolor="#ffffff">
              <td><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">&#160;<br>&#160;</font></td>
              <td><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">&#160;<br>&#160;</font></td>
              <td><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">&#160;<br>&#160;</font></td>
            </tr>
            <tr valign="top" bgcolor="#ffffff">
              <td>&#160;</td>
              <td><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">By:&#160;&#160;</font></td>
              <td><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">/s/&#160;Patrick
                A. White</font></td>
            </tr>
            <tr valign="top" bgcolor="#ffffff">
              <td colspan="2"><font style="FONT-FAMILY: " size="1">&#160;</font></td>
              <td align="left">
                <hr style="COLOR: black" align="left" noshade size="2" width="80%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Name:
                  Patrick A.White</font></div>
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Title:
                  Chief Executive Officer</font></div>
              </td>
            </tr>

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      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 27pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div><br></div>
    <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
      <div id="FTR">
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>EXHIBIT
      INDEX </strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
    <div align="left">
      <table cellpadding="0" cellspacing="0" width="100%">

          <tr>
            <td align="left" valign="bottom" width="10%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Exhibit</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Number</strong></font></div>
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            <td width="5%">&#160;</td>
            <td align="left" valign="bottom" width="85%">&#160;</td>
          </tr>
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              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">4.1</font></div>
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                of Warrant to Purchase Common Stock of Document Security Systems,
                Inc. for
                each investor and for the Placement Agent.</font></div>
            </td>
          </tr>
          <tr>
            <td align="left" valign="top" width="10%">&#160;</td>
            <td width="5%">&#160;</td>
            <td align="left" valign="bottom" width="85%">&#160;</td>
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                of Subscription Agreement between Document Security Systems, Inc.
                and each
                investor.</font></div>
            </td>
          </tr>
          <tr>
            <td align="left" valign="top" width="10%">&#160;</td>
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            <td align="left" valign="bottom" width="85%">&#160;</td>
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              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Registration
                Rights Agreement, dated as of December 12, 2006, between Document
                Security
                Systems, Inc. and Perrin, Holden &amp; Davenport Capital
                Corp.</font></div>
            </td>
          </tr>

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<DOCUMENT>
<TYPE>EX-4.1
<SEQUENCE>2
<FILENAME>v061374_ex4-1.htm
<TEXT>
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      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.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">This
      Warrant will be void after 5:00 p.m. New York time on December 25, 2011 (i.e.
      five years from the first closing date of the Offering).</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>COMMON
      STOCK PURCHASE WARRANT</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>WARRANT
      NO. B-</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">To
      Subscribe for and Purchase Shares of</font></div>
    <div>&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Document
      Security Systems, Inc.</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(Transferability
      Restricted as Provided in Paragraph 2 Below)</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>THIS
      CERTIFIES THAT</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">,
      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 &#8220;Company&#8221;) 2,940 fully paid and
      non-assessable shares of Common Stock of the Company at the &#8220;Warrant Price&#8221; 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&#8217;s Common Stock purchase
      warrants (herein called the &#8220;Warrants&#8221;), identical in all respects except as to
      the names of the holders thereof and the number of Common Shares purchasable
      thereunder and issued pursuant to the Placement Agent Agreement.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">1.<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">As
      used
      herein:</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(a)<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8220;Common
      Stock&#8221; or &#8220;Common Shares&#8221; shall initially refer to the Company&#8217;s Common Stock,
      $0.02 par value, per share as more fully set forth in Section 4
      hereof.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(b)<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8220;Warrant
      Price&#8221; shall be $11.75, which is subject to adjustment pursuant to Section 4
      hereof.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(c)<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8220;Placement
      Agent&#8221; shall refer to Perrin, Holden &amp; Davenport Capital Corp.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(d)<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8220;Placement
      Agent Agreement&#8221; shall refer to the Placement Agent Agreement dated December 12,
      2006 between the Company and the Placement Agent.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
      <div id="FTR">
        <div id="GLFTR" style="WIDTH: 100%" align="left">&#160;</div>
      </div>
      <div id="PN" style="PAGE-BREAK-AFTER: always">
        <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">1</font></div>
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
          <hr style="COLOR: black" noshade size="2">
        </div>
      </div>
      <div id="HDR">
        <div id="GLHDR" style="WIDTH: 100%" align="right">&#160;</div>
      </div>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(e)<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8220;Warrants&#8221;
      or &#8220;Placement Agent Warrants&#8221; shall refer to Warrants to purchase Common Shares
      issued to the Placement Agent or its designees by the Company pursuant to the
      Placement Agent Agreement, as such may be adjusted from time to time pursuant
      to
      the terms of Section&#160;4 and including 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.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(f)<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8220;Underlying
      Securities&#8221; shall refer to and include the Common Stock issuable or issued upon
      exercise of the Warrants.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(g)<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8220;Holders&#8221;
      shall mean the registered holder of such Warrants or any issued Underlying
      Securities.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(h)<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8220;Memorandum&#8221;
      shall mean the Company&#8217;s Confidential Private Placement Memorandum dated
      December 12, 2006, as amended and supplemented, which is being used (or was
      used) in connection with the private offering of Common Stock and Series A
      Common Stock Purchase Warrants pursuant to the Placement Agent Agreement.
</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(i)<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8220;Placement
      Agent Securities&#8221; shall refer and mean the warrants and shares of Common Stock
      issued and/or issuable upon exercise of the Warrants. </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(j)<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8220;Offering&#8221;
      means the private offering of Common Stock and Series&#160;A Common Stock
      Purchase Warrants in accordance with the Memorandum.</font></div>
    <div>&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">2.<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">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 December 26, 2006 (the &#8220;Commencement Date&#8221;) until 5:00 New
      York Time on December 25, 2011 (the &#8220;Expiration Date&#8221;), by the presentation of
      this Warrant, with the purchase form attached duly executed, at the Company&#8217;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 14 hereof), and upon payment
      by the Holder to the Company in cash or by certified check of the Warrant Price
      for the Common Shares. </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
      purchase price of the Common Shares issuable pursuant to the Warrants, shall
      be
      payable in cash and/or by certified bank check. </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">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&#160;8 hereof and Section 2 of the Placement Agent
      Agreement.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
      <div id="FTR">
        <div id="GLFTR" style="WIDTH: 100%" align="left">&#160;</div>
      </div>
      <div id="PN" style="PAGE-BREAK-AFTER: always">
        <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">2</font></div>
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
          <hr style="COLOR: black" noshade size="2">
        </div>
      </div>
      <div id="HDR">
        <div id="GLHDR" style="WIDTH: 100%" align="right">&#160;</div>
      </div>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">3.<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Subject
      and pursuant to the provisions of this Section 4, 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.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(a)<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Dividends
      and Distributions</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.
      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.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(b)<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Subdivision
      and Combination</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.
      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.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(c)<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Adjustment
      in Number of Warrant Shares</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.
      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.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(d)<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Reclassification,
      Consolidation, Merger, etc</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.
      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.</font></div>
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(e)<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Determination
      of Outstanding Shares</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.
      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.</font></div>
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(f)<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">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 in Options or
      Convertible Securities or (ii) to subscribe for or purchase Common Stock,
      Options or Convertible Securities then such record date shall be deemed to
      be
      the date of issue or sale of the Common Shares, Options or Convertible
      Securities 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.</font></div>
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">4.<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">For
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      purposes of this Warrant, the terms &#8220;Common Shares&#8221; or &#8220;Common Stock&#8221; or
&#8220;Warrant Shares&#8221; 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.</font></div>
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">5.<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
      Company covenants and agrees that:</font></div>
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(a)<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">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;</font></div>
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        <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">4</font></div>
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(b)<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">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</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(c)<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">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.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">6.<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Until
      exercised, this Warrant shall not entitle the Holder hereof to any voting rights
      or other rights as a stockholder of the Company, except that the Holder of
      this
      Warrant shall be deemed to be a stockholder of this Company for the purpose
      of
      bringing suit on the ground that the issuance of shares of stock of the Company
      is improper under the New York Business Corporation Law.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">7.<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">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 &#8220;Act&#8221;), or any similar Federal statute then in
      force, and all applicable &#8220;Blue Sky&#8221; laws.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">8.<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">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&#8217;s
      intention of effecting such disposition, and describing briefly such Holder&#8217;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 and the provisions
      of
      the following subdivisions shall apply:</font></div>
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(a)<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">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.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(b)<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">If,
      in
      the opinion of either such counsel, such proposed disposition requires such
      registration or qualification under the Act, or similar Federal statute then
      in
      effect, of this Warrant and/or the Common Shares issuable or issued upon the
      exercise of this Warrant, the Company shall promptly give written notice to
      all
      then Holders of the Warrants, at the respective addresses thereof shown on
      the
      books of the Company. </font></div>
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    <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
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      </div>
      <div id="PN" style="PAGE-BREAK-AFTER: always">
        <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">5</font></div>
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
      holder of this Warrant shall also be entitled to the registration rights as
      stated in the Placement Agent Agreement.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">9.<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
      Company agrees to indemnify and hold harmless the holder of this Warrant, or
      of
      Underlying Securities issuable or issued upon the exercise hereof, from and
      against any claims and liabilities caused by any untrue statement of a material
      fact, or omission to state a material fact required to be stated, in any such
      registration statement, prospectus, notification or offering circular under
      Regulation A, except insofar as such claims or liabilities are caused by any
      such untrue statement or omission based on information furnished in writing
      to
      the Company by such holder, or by any other such holder affiliated with the
      holder who seeks indemnification, as to which the holder hereof, by acceptance
      hereof, agrees to indemnify and hold harmless the Company.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">10.<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">If
      this
      Warrant, or any of the Underlying Securities issuable pursuant hereto, require
      qualification or registration with, or approval of, any governmental official
      or
      authority (other than registration under the Act, or any similar Federal statute
      at the time in force), before such shares may be issued on the exercise hereof,
      the Company, at its expense, will take all requisite action in connection with
      such qualification, and will use its best efforts to cause such securities
      to be
      duly registered or approved, as may be required.</font></div>
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">11.<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">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.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">12.<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">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.</font></div>
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    <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
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        <div id="GLFTR" style="WIDTH: 100%" align="left">&#160;</div>
      </div>
      <div id="PN" style="PAGE-BREAK-AFTER: always">
        <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">6</font></div>
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
          <hr style="COLOR: black" noshade size="2">
        </div>
      </div>
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      </div>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">13.<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">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,</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
      Suite
      1525, Rochester, NY 14614 </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">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.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">15.<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">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.</font></div>
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            <td><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">By:&#160;&#160;</font></td>
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                Patrick White</font></div>
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                Chief Executive Officer</font></div>
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      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
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<DOCUMENT>
<TYPE>EX-10.1
<SEQUENCE>3
<FILENAME>v061374_ex10-1.htm
<TEXT>
<html>
  <head>
    <title>
</title>
</head>
  <body bgcolor="#ffffff"><br>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>DOCUMENT
      SECURITY SYSTEMS, INC.</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>SUBSCRIPTION
      AGREEMENT</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>NONE
      OF THE SECURITIES OFFERED PURSUANT TO THIS SUBSCRIPTION AGREEMENT HAVE BEEN
      REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE &#8220;ACT&#8221;) 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 COVERNG SUCH SECURITIES UNDER THE ACT OR
      AN
      OPINION OF COUNSEL SATISFACTORY TO THE COMPANY TO THE EFFECT THAT SUCH
      REGISTRATION IS NOT NECESSSARY. </strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>INVESTMENT
      IN THE COMPANY IS HIGHLY SPECULATIVE AND INVOLVES SUBSTANTIAL RISK, INCLUDING,
      BUT NOT LIMITED TO THE RISKS SET FORTH IN THE SECTION ENTITLED &#8220;RISK FACTORS&#8221; IN
      THE PRIVATE OFFERING MEMORANDUM ATTACHED HERETO. YOU SHOULD READ THE PRIVATE
      OFFERING MEMORANDUM CAREFULLY BEFORE INVESTING.</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">This
      Subscription Agreement (this &#8220;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Subscription
      Agreement</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8221;)
      is
      entered into on December ___, 2006, by and between DOCUMENT SECURITY SYSTEMS,
      INC., a New York corporation (the &#8220;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Company</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8221;),
      and
      _______________, an individual or entity (&#8220;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Subscriber</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8221;).
      As
      used herein, the Company and Subscriber are individually and respectively
      referred to as a &#8220;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Party</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8221;
and
      collectively as the &#8220;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Parties.</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8221;
Terms
      not otherwise defined herein shall have the meanings ascribed to them in the
      Private Offering Memorandum attached hereto as </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Exhibit
      A</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
      (the
&#8220;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Private
      Offering Memorandum</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8221;).</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>1.
      </strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><u>Subscription</u></strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>.</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><u>&#160;</u></strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Subscriber
      subscribes for and offers to purchase, and the Company agrees to issue and
      sell,
      an equity interest in the Company (the &#8220;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Units</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8221;),
      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</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>&#160;</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8220;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Investment
      Amount</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8221;),
      subject to the terms and conditions set forth herein.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>2</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.
      </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><u>Investment
      Amount; Escrow Funds</u></strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>.</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(a)
      </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Deliveries
      Upon Signing. </strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Simultaneous
      with the execution of this Subscription Agreement, Subscriber shall execute
      and
      deliver to Placement Agent an Investor Questionnaire substantially in the form
      of </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Exhibit
      B</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
      hereto
      (the &#8220;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Investor
      Questionnaire</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8221;).
      </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(b)
      </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Payment
      of Investment Amount. </strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Concurrent
      with the execution of this Subscription Agreement, Subscriber shall transmit
      a
      wire transfer or check to the escrow agent (the &#8220;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Escrow
      Agent</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8221;)
      designated in the Escrow Agreement substantially in the form of </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Exhibit
      </u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">C
      hereto
      (the &#8220;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Escrow
      Agreement</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8221;)
      in an
      amount equal to such Subscriber&#8217;s Investment Amount in accordance with the
      instructions for the Escrow Agent set forth in the Escrow Agreement. For
      purposes of this Agreement, &#8220;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Payment</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8221;
shall
      mean Subscriber&#8217;s implementation of such wire transfer or receipt by Escrow
      Agent of the bank check. Subscriber funds deposited into the Escrow Account
      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).</font></div>
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    <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(c)
      </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Closing.
      </strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">At
      any
      time on or prior to March 12, 2007, the Company, at the Company&#8217;s sole
      discretion, may elect to accept the subscription of the Subscriber. The
      Company&#8217;s acceptance of the subscription shall be effective upon the Company&#8217;s
      transmitting a notice to the Subscriber according to the notice information
      for
      the Subscriber set forth herein informing the Subscriber of such acceptance
      (&#8220;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Closing
      Notice</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8221;).
      The
      Company shall use commercially reasonable efforts to effect a closing within
      21
      days after the Company has obtained executed Subscription Agreements with an
      aggregate Investment Amount of at least $1,500,000.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(d)
      </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Trigger
      for Return of Investment Amount. </strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">If
      by
      March 12, 2007, the Company has failed to obtain executed Subscription
      Agreements with an aggregate Investment Amount of at least $1,500,000, then
      the
      Company shall instruct the Escrow Agent to return to the Subscriber an amount
      equal to the Subscriber&#8217;s Investment Amount to the Subscriber pursuant to the
      terms set forth in the Escrow Agreement. In the event that the Company has
      provided 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&#8217;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&#8217;s
      Payment, Subscriber may, at Subscriber&#8217;s sole discretion, provide written notice
      to the Company to return Subscriber&#8217;s payment (the &#8220;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Return
      Notice</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8221;).
      The
      Company shall, within 3 business days of receipt of the Return Notice, instruct
      Escrow Agent to return the Subscriber&#8217;s Payment to Subscriber. </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>3.
      </strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><u>The
      Offering</u></strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>.</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Subscriber
      understands that the details of the offering (the &#8220;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Offering</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8221;)
      are
      set forth in the Private Offering Memorandum. The Offering will terminate on,
      or
      prior to, March 12, 2007, 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. </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">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
      transferred from the Escrow Account, and clears and is credited to the Escrow
      Agent&#8217;s bank account, and (ii) the Company accepts Subscriber&#8217;s subscription in
      writing (the &#8220;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Closing
      Date</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8221;).
      </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Subscriber
      acknowledges that the Company reserves the right, in its sole discretion, to
      accept or reject any Subscription Agreement. </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">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 and all such information provided by the
      Placement Agent, if any, and together with any other filed regulatory documents
      (collectively &#8220;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Offering
      Material</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8221;),
      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&#8217;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.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
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      <div id="PN" style="PAGE-BREAK-AFTER: always">
        <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">2</font></div>
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
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        </div>
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      </div>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><u>4.
      Representations and Warranties of Subscriber.</u></strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(a)
      In
      order to induce the Company to accept Subscriber&#8217;s subscription, Subscriber
      further represents and warrants to the Company, its Affiliates, as defined
      in
      the Securities Act of 1933 (the &#8220;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Securities
      Act</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8221;),
      and
      counsel to the Company (the &#8220;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Company&#8217;s
      Counsel</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8221;),
      and
      their respective agents and representatives as follows:</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

          <tr valign="top" style="line-height: 1.25;">
            <td style="width: 72pt;">&#160;</td>
            <td style="width: 18pt;">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>1.</strong></font></div>
            </td>
            <td>
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>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.
                </strong></font></div>
            </td>
          </tr>

      </table>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

          <tr valign="top" style="line-height: 1.25;">
            <td style="width: 72pt;">&#160;</td>
            <td style="width: 18pt;">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">2.</font></div>
            </td>
            <td>
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">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&#8217;s counsel, Subscriber&#8217;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&#8217;s
                information. </font></div>
            </td>
          </tr>

      </table>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

          <tr valign="top" style="line-height: 1.25;">
            <td style="width: 72pt;">&#160;</td>
            <td style="width: 18pt;">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">3.</font></div>
            </td>
            <td>
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">With
                respect to the United States federal, state and foreign tax aspects
                of
                Subscriber&#8217;s investment, Subscriber is relying solely upon the advice of
                Subscriber&#8217;s own tax advisors, and/or upon Subscriber&#8217;s own knowledge with
                respect thereto.</font></div>
            </td>
          </tr>

      </table>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

          <tr valign="top" style="line-height: 1.25;">
            <td style="width: 72pt;">&#160;</td>
            <td style="width: 18pt;">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">4.</font></div>
            </td>
            <td>
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">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. </font></div>
            </td>
          </tr>

      </table>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

          <tr valign="top" style="line-height: 1.25;">
            <td style="width: 72pt;">&#160;</td>
            <td style="width: 18pt;">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">5.</font></div>
            </td>
            <td>
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">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.</font></div>
            </td>
          </tr>

      </table>
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

          <tr valign="top" style="line-height: 1.25;">
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              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">6.</font></div>
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              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">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.</font></div>
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    <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
      <div id="FTR">
        <div id="GLFTR" style="WIDTH: 100%" align="left">&#160;</div>
      </div>
      <div id="PN" style="PAGE-BREAK-AFTER: always">
        <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">3</font></div>
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
          <hr style="COLOR: black" noshade size="2">
        </div>
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

          <tr valign="top" style="line-height: 1.25;">
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              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">7.</font></div>
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              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">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&#8217;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&#8217;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</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><em>.
                </em></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></div>
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

          <tr valign="top" style="line-height: 1.25;">
            <td style="width: 72pt;">&#160;</td>
            <td style="width: 18pt;">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">8.</font></div>
            </td>
            <td>
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Subscriber
                is an &#8220;accredited investor&#8221; (as defined in Rule 501 of Regulation D
                promulgated under the Securities
                Act).</font></div>
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      </table>
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

          <tr valign="top" style="line-height: 1.25;">
            <td style="width: 72pt;">&#160;</td>
            <td style="width: 18pt;">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">9.</font></div>
            </td>
            <td>
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Subscriber&#8217;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&#8217;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.</font></div>
            </td>
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      </table>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

          <tr valign="top" style="line-height: 1.25;">
            <td style="width: 72pt;">&#160;</td>
            <td style="width: 18pt;">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">10.</font></div>
            </td>
            <td>
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">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&#8217;s assets or business and Subscriber&#8217;s
                bankruptcy, except as otherwise provided pursuant to the laws of
                any
                applicable jurisdiction.</font></div>
            </td>
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    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

          <tr valign="top" style="line-height: 1.25;">
            <td style="width: 72pt;">&#160;</td>
            <td style="width: 18pt;">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">11.</font></div>
            </td>
            <td>
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">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&#8217;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&#8217;s investment or realize any tax benefits therefrom and
                Subscriber is further aware that Subscriber may lose all or a substantial
                part of Subscriber&#8217;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.</font></div>
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    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
      <div id="FTR">
        <div id="GLFTR" style="WIDTH: 100%" align="left">&#160;</div>
      </div>
      <div id="PN" style="PAGE-BREAK-AFTER: always">
        <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">4</font></div>
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
          <hr style="COLOR: black" noshade size="2">
        </div>
      </div>
      <div id="HDR">
        <div id="GLHDR" style="WIDTH: 100%" align="right">&#160;</div>
      </div>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

          <tr valign="top" style="line-height: 1.25;">
            <td style="width: 72pt;">&#160;</td>
            <td style="width: 18pt;">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">12.</font></div>
            </td>
            <td>
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
                address set forth herein is Subscriber&#8217;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&#8217;s purchase
                of the Units.</font></div>
            </td>
          </tr>

      </table>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

          <tr valign="top" style="line-height: 1.25;">
            <td style="width: 72pt;">&#160;</td>
            <td style="width: 18pt;">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">13.</font></div>
            </td>
            <td>
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">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&#8217;s
                purchase of the Units subscribed for herein. Each such representation
                and
                warranty shall survive such
                purchase.</font></div>
            </td>
          </tr>

      </table>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

          <tr valign="top" style="line-height: 1.25;">
            <td style="width: 72pt;">&#160;</td>
            <td style="width: 18pt;">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">14.</font></div>
            </td>
            <td>
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">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&#8217;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&#8217;s representations and warranties in this Subscription
                Agreement made by the Company, its Affiliates, the Company&#8217;s Counsel and
                their respective agents or representatives.
</font></div>
            </td>
          </tr>

      </table>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

          <tr valign="top" style="line-height: 1.25;">
            <td style="width: 72pt;">&#160;</td>
            <td style="width: 18pt;">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">15.</font></div>
            </td>
            <td>
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">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.</font></div>
            </td>
          </tr>

      </table>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

          <tr valign="top" style="line-height: 1.25;">
            <td style="width: 72pt;">&#160;</td>
            <td style="width: 18pt;">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">16.</font></div>
            </td>
            <td>
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Subscriber
                has full right, power, and authority to execute and deliver this
                Subscription Agreement and to perform Subscriber&#8217;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&#8217; rights generally and to general equity
                principles.</font></div>
            </td>
          </tr>

      </table>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

          <tr valign="top" style="line-height: 1.25;">
            <td style="width: 72pt;">&#160;</td>
            <td style="width: 18pt;">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">17.</font></div>
            </td>
            <td>
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">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.</font></div>
            </td>
          </tr>

      </table>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

          <tr valign="top" style="line-height: 1.25;">
            <td style="width: 72pt;">&#160;</td>
            <td style="width: 18pt;">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">18.</font></div>
            </td>
            <td>
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">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.</font></div>
            </td>
          </tr>

      </table>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
      <div id="FTR">
        <div id="GLFTR" style="WIDTH: 100%" align="left">&#160;</div>
      </div>
      <div id="PN" style="PAGE-BREAK-AFTER: always">
        <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">5</font></div>
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
          <hr style="COLOR: black" noshade size="2">
        </div>
      </div>
      <div id="HDR">
        <div id="GLHDR" style="WIDTH: 100%" align="right">&#160;</div>
      </div>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

          <tr valign="top" style="line-height: 1.25;">
            <td style="width: 72pt;">&#160;</td>
            <td style="width: 18pt;">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">19.</font></div>
            </td>
            <td>
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">To
                Subscriber&#8217;s knowledge, except for the Placement Agent, 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&#8217;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&#8217;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&#8217;s investment in the Company, such payment
                shall be deducted from the amount paid by Subscriber in connection
                with
                this Agreement. </font></div>
            </td>
          </tr>

      </table>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 72pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>5.
      </strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><u>Legend</u></strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>.</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Any
      certificate representing Subscriber&#8217;s interest in the Company shall bear the
      following legend:</font></div>
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      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 &#8220;SECURITIES
      ACT&#8221;), 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.
      </font></div>
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      </strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><u>Indemnification
      by Subscriber</u></strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>.</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Subscriber
      hereby agrees to indemnify and hold harmless the Company, its Affiliates, the
      Company&#8217;s Counsel, Placement Agent and their respective officers, directors,
      employees, agents and representatives, from any and all damages, losses, costs,
      and expenses (including reasonable attorneys&#8217; fees to collect such amount of
      damages, losses, costs, expenses) which they, or any of them, may incur by
      reason of Subscriber&#8217;s failure to fulfill any of the terms and conditions of
      this Subscription Agreement or by reason of Subscriber&#8217;s breach of any of
      Subscriber&#8217;s representations and warranties contained in this Subscription
      Agreement.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>7.
      </strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><u>Confidential
      Information</u></strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>.</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">For
      purposes of this Agreement, the term &#8220;Confidential Information&#8221; 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&#8217;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&#8217;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&#8217;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&#8217;s attention. All proceeds from a misuse or disclosure of the
      Company&#8217;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. </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">8.
      </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>&#160;</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><u>General
      Provisions</u></strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>.</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(a)
      </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Headings</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.
      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.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(b)
      </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Enforceability</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.
      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.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(c)
      </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Notices.</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
      Any
      notice or other communication required or permitted hereunder (&#8220;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Notice</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8221;)
      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:</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
    <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
      <div id="FTR">
        <div id="GLFTR" style="WIDTH: 100%" align="left">&#160;</div>
      </div>
      <div id="PN" style="PAGE-BREAK-AFTER: always">
        <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">7</font></div>
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
          <hr style="COLOR: black" noshade size="2">
        </div>
      </div>
      <div id="HDR">
        <div id="GLHDR" style="WIDTH: 100%" align="right">&#160;</div>
      </div>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br>&#160;</div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">

          <tr valign="top" style="line-height: 1.25;">
            <td style="width: 36pt;">
            </td>
            <td align="left" style="width: 180pt;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">To
              the Company:</font></td>
            <td align="left">
              <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Document
                Security Systems, Inc.</font></div>
              <div align="left">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Attn:
                  Chief Executive Officer</font></div>
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">28
                  East Main Street</font></div>
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Suite
                  1525 </font></div>
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Rochester,
                  NY 14614</font></div>
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Facsimile
                  No: </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(585)
                  325-2977</font></div>
              </div>
            </td>
          </tr>

      </table>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">

          <tr valign="top" style="line-height: 1.25;">
            <td style="width: 36pt;">&#160;</td>
            <td align="left" style="width: 180pt;">&#160;</td>
            <td align="left">&#160;</td>
          </tr>

      </table>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">

          <tr valign="top" style="line-height: 1.25;">
            <td style="width: 36pt;">&#160;</td>
            <td align="left" style="width: 180pt;"><font size="2">To Subscriber:</font></td>
            <td align="left">
              <div><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">_________________________</font></div>
              <div><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">_________________________</font></div>
              <div><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">_________________________</font></div>
              <div><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Attention:
                _________________</font></div>
              <div><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Facsimile
                No: _______________</font></div>
            </td>
          </tr>

      </table>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align="left">&#160;<font id="TAB2" style="COLOR: black; LETTER-SPACING: 27pt">&#160;</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">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</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>,</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
        that any
        Notice sent by facsimile shall be deemed to have been given as of the date
        sent
        by facsimile.</font></div>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(d)
      </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Governing
      Law; Disputes</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.
      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.
      </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(e)
      </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Further
      Assurances</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.
      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.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(f)
      </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Binding
      Agreement</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.
      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.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(g)
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      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.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
      <div id="FTR">
        <div id="GLFTR" style="WIDTH: 100%" align="left">&#160;</div>
      </div>
      <div id="PN" style="PAGE-BREAK-AFTER: always">
        <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">8</font></div>
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
          <hr style="COLOR: black" noshade size="2">
        </div>
      </div>
      <div id="HDR">
        <div id="GLHDR" style="WIDTH: 100%" align="right">&#160;</div>
      </div>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(h)
      </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Counterparts</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.
      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.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(i)
      </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Entire
      Agreement</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.
      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.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
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<DOCUMENT>
<TYPE>EX-10.2
<SEQUENCE>4
<FILENAME>v061374_ex10-2.htm
<TEXT>
<html>
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</title>
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  <body bgcolor="#ffffff"><br>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>REGISTRATION
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      executed and delivered by DOCUMENT SECURITY SYSTEMS, INC., a New York
      corporation (the &#8220;Company&#8221;), and PERRIN, HOLDEN &amp; DAVENPORT CAPITAL CORP.,
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">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 December 12, 2006, including the exhibits
      thereto and any and all supplements thereof and amendments thereto, and all
      documents incorporated by reference therein (collectively, the (Memorandum&#8221;) is
      offering for sale (the &#8220;Offering&#8221;) up to 130 units (the &#8220;Units&#8221;), each Unit
      consisting of (i) 5,880 shares (&#8220;Shares&#8221;) of its Common Stock, par value $.02
      per share (&#8220;Common Stock&#8221;) and (ii) Series B Common Stock Warrants (the
&#8220;Warrants&#8221;) to purchase up to an aggregate of 2,940 shares </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(the
      &#8220;Warrant Shares&#8221;) of Common Stock;</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">WHEREAS,
      Perrin, Holden &amp; Davenport Capital Corp. (&#8220;Perrin&#8221;) 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 (&#8220;Holders&#8221;); and</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">WHEREAS,
      the terms and conditions of the Offering provide for the execution and delivery
      of this Agreement.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">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:</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">1.&#160;<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Automatic
      Registration</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.
      The
      Company shall use its best efforts to file a registration statement
      (&#8220;Registration Statement&#8221;) with the Securities and Exchange Commission under the
      Securities Act of 1933 (the &#8220;Act&#8221;), 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 60 business days after 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.</font></div>
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">2.&#160;<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Registerable
      Shares</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.
      For
      purposes of this Agreement, the term &#8220;Registerable Shares&#8221; shall include&#8221; (a)
      the Shares purchased as a component of the Units in the Offering; (b) any
      securities issued or issuable with respect to the Warrants; or (c) Warrant
      Shares; or (d) 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 &#8220;Registerable Shares&#8221; 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.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">3.&#160;<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Additional
      Covenants of the Company With Respect to Registration</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
      Company covenants and agrees as follows:</font></div>
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      </div>
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        <div style="WIDTH: 100%; TEXT-ALIGN: center">&#160;</div>
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
          <hr style="COLOR: black" noshade size="2">
        </div>
      </div>
      <div id="HDR">
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(a)<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
      connection with any registration under Section 1 above, the Company shall file
      the Registration Statement no event later than 60 business days following the
      final closing of the Offering, and use reasonable efforts to have such
      Registration Statement declared effective at the earliest possible
      time.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(b)<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">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.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(c)<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">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&#8217;s obligations hereunder), including the acquisition or
      divestiture of assets, public filings with the SEC, pending corporate
      developments and similar events.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(d)<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">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.</font></div>
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(e)&#160;<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">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&#8217;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.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">4.<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Indemnification</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(a)<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">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 &#8220;Exchange Act&#8221;),
      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; 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
      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. </font></div>
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        <div style="WIDTH: 100%; TEXT-ALIGN: center">
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(b)<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">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&#8217;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 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&#8217;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.</font></div>
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        <div style="WIDTH: 100%; TEXT-ALIGN: center">
          <hr style="COLOR: black" noshade size="2">
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br>&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(c)&#160;<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">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.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">5.&#160;<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Amendments</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.
      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,
      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.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">6.&#160;<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Notices</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.
      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, Perrin 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.</font></div>
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      shall have been made, the provisions of this Agreement which are for the benefit
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      the transactions contemplated hereby (and agrees not to commence any litigation
      relating thereto except in such courts), waives any objection to the laying
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      gender shall include all genders; words denoting natural persons shall include
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      provisions of this Agreement shall not be deemed or construed to be a waiver
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          <tr valign="top" bgcolor="#ffffff">
            <td width="50%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">&#160;</font></td>
            <td width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">&#160;</font></td>
            <td width="49%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">&#160;</font></td>
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            <td colspan="2"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: "><strong>DOCUMENT
              SECURITY SYSTEMS, INC.</strong></font></td>
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            <td><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">&#160;<br>&#160;</font></td>
            <td><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">&#160;<br>&#160;</font></td>
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            <td><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">By:&#160;&#160;</font></td>
            <td><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">&#160;
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      HOLDEN &amp; DAVENPORT CAPITAL CORP.</strong></font></div>
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      A</u></font></div>
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